Why Agency Hiring Costs More Than CleanTech Founders Realise

The number on the invoice

End of quarter. The accounts are open and recruitment spend is higher than expected. The budget line shows agency fees paid out across the year, and the number is significant. What it doesn't show is the fourteen-week search that produced no placement, the three agencies briefed on the same role in a constrained market, the senior team member who sat through four rounds of interviews for a position that eventually went quiet, or the hire made under pressure who is already looking uncertain at month twelve.

The placement fee is the number that appears on the invoice. The costs that surround it are largely invisible on paper.

What the fee actually covers

In the UK, agency fees for permanent hires typically run at 15 to 25 per cent of first-year salary for standard roles, rising to 20 to 30 per cent for specialist or senior positions. For a CleanTech scale-up hiring at pace, this accumulates in a way that isn't always obvious until it's reviewed in one place.

According to the Sales Recruit UK Energy and Renewables Salary Guide, compiled in May 2026, commercial roles in the UK clean energy sector typically range from £40,000 to £58,000 for a Business Development Manager, £55,000 to £85,000 for a Senior BDM or Key Account Manager, and £70,000 to £110,000 for a Sales Manager or Head of Commercial. At 20 to 25 per cent agency fees, a single senior commercial hire costs £11,000 to £27,500 in placement fees alone. A scale-up making five commercial hires across these levels in a year puts the fee spend at £55,000 to £100,000 before anything else is counted.

That figure covers the placement itself: the search, the shortlist, the introduction. It doesn't cover the brief that needed three revisions before the search could open, the parallel searches across agencies that surfaced largely the same candidates, or the role that was filled but will need to be rerun before the year is out. The fee is the part of agency hiring costs that gets recorded. Everything around it goes somewhere else in the accounts, or nowhere at all.

Source: Astute People, Top 9 In-Demand UK Renewable Energy Roles, July 2025. astutepeople.co.uk/blog/top-9-in-demand-uk-renewable-energy-roles/

What the invoice doesn't show

The placement fee is one layer of agency hiring costs. Beneath it sit four others, none of which appear on an invoice.

The first is leadership time. Every active search absorbs founder and COO hours: briefing agencies at the start of each search, reviewing longlists, coordinating interview panels, following up for updates that haven't arrived. When three or four searches are running simultaneously, as they often are during a growth phase, that absorption multiplies. It doesn't get measured against the cost of the hire, but it is consistently one of the more significant parts of what agency-heavy hiring costs at this stage.

The second is the opportunity cost of that time. Hours spent managing recruitment are hours not spent on delivery, on commercial relationships, on the work that moves the business forward. For a founding team already stretched, this is not a neutral trade.

The third is quality risk. REC research shows that while the direct logistical costs of a hire, covering advertising, agency fees and interviewing, average around £5,000, lost productivity from a poor hire can run to five times that figure, up to £25,000 per hire. In research that has become a benchmark for the industry, the REC calculated that a poor hire at mid-manager level can cost a business more than £132,000 once wasted salary, training, and the knock-on effect on the wider team are included. When hiring is running at pace without a consistent assessment process, the conditions that produce that outcome are more likely, not less.

The fourth is structural cost. Without a repeatable hiring process, every new role begins from scratch. The brief gets written again. The agency relationships are re-established. The assessment criteria get decided afresh. Each hire costs roughly what the last one cost, and nothing compounds. The business builds no advantage from having hired before.

Source: REC, Recruitment and Recovery (2020). REC, Perfect Match: Making the Right Hire and the Cost of Getting It Wrong (2017).

What changes when the process is consistent

A repeatable hiring process changes the economics of each hire. Published data shows hiring costs vary from around 12 per cent of salary for a structured approach to around 22 per cent for an agency-led model. For businesses running embedded hiring support across multiple roles rather than placing each search individually, the saving on overall recruitment costs typically runs between 20 and 40 per cent, and the process gets more efficient over time rather than resetting with each new role.

At this stage of growth, what that process actually involves is fairly straightforward: a written brief agreed before any search opens, a consistent way of assessing candidates across roles, clear ownership of the pipeline, and leadership visibility into where things stand without being pulled into managing the detail day to day. None of this requires an elaborate infrastructure, but what it produces is a hiring function where the institutional knowledge stays inside the business rather than sitting with whichever agency happens to be running the current search.

For scaling CleanTech companies at this point, embedded hiring support often plays this role, running hiring as operational infrastructure rather than adding another layer of agency activity on top of an approach that's already fragmented. Agencies can still be part of the picture. What changes is whether the process underneath the search is consistent enough to bring the cost of each hire down over time.

Why the cost compounds during a scale phase

Agency hiring costs are highest when a company is growing fastest. Multiple roles open simultaneously, urgency increases, and the conditions that drive spend upward are all present at once.

The UK clean energy sector faces a projected shortfall of over 184,000 workers. The talent pool CleanTech scale-ups are drawing from is under real pressure, which pushes fees toward the upper end of the range and makes parallel agency briefings on the same search more common. In a constrained market, the dynamics that make agency-led hiring expensive are structural rather than incidental.

A business that addresses its hiring process during a scale phase builds something that gets cheaper to operate over time. Each subsequent hire benefits from a cleaner brief, a more consistent assessment, a pipeline that leadership can see without being drawn into. A business that doesn't carries the same structural cost through every subsequent funding cycle, at increasing volume.

Source: Centuro Global / ManpowerGroup, 2025.

The agency fees are visible enough, but the cost of what surrounds them is not. And neither is what the same spend would look like with a consistent process running underneath it.