Recruitment Insights

How economic uncertainty has impacted permanent recruiters

April 12, 2023
How economic uncertainty has impacted permanent recruiters

Today’s recruiters face new challenges and demands to adjust their permanent recruitment fees and payment terms. As businesses across numerous industries struggle to stay afloat amidst economic uncertainties, many have asked recruiters to reduce costs, extend payment terms or offer an alternative payment method.

Many companies have also reduced their headcounts, stopped hiring, or adopted a more cautious approach to recruitment. As a result, recruitment agencies have seen declining revenues and are under increasing pressure to adjust their permanent fees and payment terms to stay competitive.

In this blog, I’ll discuss why recruiters have received these requests and what it means for the whole recruitment industry.

Reduced fees

Fee reduction is among the most common requests recruiters receive from their clients. Many companies want to cut costs wherever possible and view recruitment fees as a potential area for savings.

If your client requests reduced fees, we recommend you carefully consider the impact on your business and avoid this where possible. Lower fees will reduce revenue, which could lead to a decrease in the quality of service provided. It may also increase competition as other recruiters reduce their fees to offer competitive rates.

Extended payment terms

Another request that recruiters are receiving is to extend payment terms. Clients may request that the payment be made over a much longer period, such as six to twelve months, to ease cash flow issues. While this benefits the client, it can create cash flow problems for the recruiter, who must find a way to cover their costs.

Recruiters who agree to extend payment terms must carefully manage their cash flow until they receive their full fees.

If your client opts for making their own ‘agreed’ payment solutions with the recruitment agency, you must consider the impact this has on the business. In-house payment plans may require additional administrative work, and payment by credit card may result in added processing fees. You may also need to ensure that payment processes comply with regulatory requirements.


It’s no secret that recruiters face increasing pressures to drop their fees or prolong payment terms to ensure payment is eventually honoured and remain competitive in the ever-changing climate. While it may be tempting to agree to these requests by your client, you must carefully consider the impact on the business and manage cash flow effectively.

Why choose our APay solution?

APay is a service that allows your client to ‘Recruit Now, and Pay Later’. Our model enables recruitment agencies like you to receive your fee upfront, also to avoid making those awkward follow up calls asking when they can expect to receive a payment. Opting to use APay as your preferred payment solution gives recruitment agencies an advantage to be able to plan for future budgeting while your client gets the working capital needed to invest back into the business, including hiring new candidates.

With a steady cash flow, you can help your clients make those important investments without worrying about short-term financial issues. In addition, you can foster better recruiter/client relationships by offering flexible payment options, demonstrating that you value their financial well-being.

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