Why does contract staffing look so expensive?

Because the markup recurs. A 50% markup on a contractor is charged every month the engagement runs, unlike a placement fee which is paid once. An hourly rate that sounds reasonable can therefore cost more across a year than any permanent placement would.

When should we use RPO instead of paying per hire?

Generally above about eight hires a year at a $120,000 average salary. Below that a programme fee cannot amortise. Above roughly twenty-five, an in-house recruiter supported by an agency usually beats both, and we will say so.

What is the difference between staff augmentation and contract staffing?

Structurally similar, priced differently. Traditional contract staffing bills a markup over the worker's pay rate, typically 40 to 60%. Our staff augmentation is priced as a service roughly 30% below big-firm quotes, and there is no separate conversion fee if the role becomes permanent.

Can we use more than one model at once?

Yes, and most hiring plans should. Four engineers on staff augmentation, a VP through executive search, and eight permanent roles under a programme is a normal quarter. All of it runs under one agreement and one portal here rather than four vendor relationships.

What is the most common expensive mistake?

Paying placement fees at volume. A company hiring eighteen people a year at 20% on $120,000 salaries spends $432,000 on fees, roughly double what a programme would cost. Each fee looks reasonable alone, which is why nobody notices until the annual finance review.

Do you charge a conversion fee if a contractor becomes permanent?

No, not on candidates we placed as contractors. Ask any provider what theirs is before signing, because conversion clauses are where temp-to-hire arrangements quietly become expensive and they are frequently buried rather than negotiated.

How do we decide without a sales call?

Use the decision tree at the top of this page and the cost chart below it. If the answer is still unclear, the cost-per-hire calculator in our free HR Toolkit models your specific volume and salary mix, and no call is required to use it.

Service

Staffing Solutions

Five ways to fill a role, with the cost of each published and a decision tree for picking between them. Most companies pay too much because they used the model they already had a contract for, not the one the role needed.

Last updated on: July 19, 2026Read time: 7 mins

Written byAdithyan RKFact checked bySurya N

Models, one agreement

14%

Flat direct-hire commission

900K+

AI interviews conducted

90 days

Replacement commitment

Hyring provides five hiring models under one agreement: direct hire at a flat 14%, RPO, staff augmentation, employer of record, and executive search. This page exists to help you pick between them, including where a model we sell is the wrong choice for your situation.

The most expensive decision in hiring is rarely which vendor to use. It is which model to use, and most companies get it wrong in a predictable way: they use whatever they already have a contract for. A team with an agency relationship pays placement fees for their fifteenth hire of the year when a program would cost a third as much. A team with an RPO commitment routes a single confidential VP search through a process built for volume. The cost of those mismatches dwarfs any fee negotiation.

Which Model Fits This Role

Work down five questions. The first yes is usually the right model, and most hiring plans contain more than one.

Most hiring plans contain more than one of these at once, which is the actual reason companies end up with four vendors. Every model below runs under one agreement and one portal here.

What Each Model Costs

On a $130,000 role, first-year cost ranges from $9,500 under an RPO program to $65,000 under contract staffing at a typical markup.

What the same $130,000 role costs under each model

First-year cost to the employer, excluding the salary itself where the person joins your payroll

Contract staffing looks expensive here because the markup recurs every month the engagement runs, unlike a one-time placement fee. That is the single most misunderstood line in staffing pricing, and the reason a cheap-sounding hourly rate can cost more over a year than a placement fee ever would.

Two things this chart makes visible that pricing conversations usually obscure. First, contract markups recur. A 50% markup on a contractor is not a one-time cost like a placement fee; it is charged every month the engagement continues, which is why an hourly rate that sounds reasonable can cost more across a year than any permanent placement. Second, RPO per-hire cost only looks that low at volume. At three hires a year the same programme fee would put it at the top of this chart, not the bottom, which is why the RPO page publishes the crossover curves rather than a single number.

The Five Models Compared

Each model differs on who employs the person, how cost scales, and how quickly capacity arrives.

Hiring models compared across six buying criteria

Direct hire	RPO	Staff augmentation	Employer of record	Executive search
Who employs the person	You	You	Hyring	Hyring	You
Pricing shape	Flat 14% of base	Program fee	Monthly rate	Per employee monthly	Flat 14%, contingent
Cost as volume rises	Linear	Falls per hire	Linear	Linear	Linear
Time to capacity	Notice period	1–2 weeks to start	Fastest	Fast, compliance handled	6–12 weeks
Best at	Permanent roles, any function	8–20 hires a year	Defined-period capacity	Hiring where you have no entity	Leadership and confidential
Wrong for	High volume, or pure capacity	Under 8 hires, or single searches	Roles that must be on your payroll	Domestic hiring in your own state	Anything below director level

The Three Expensive Mistakes

Paying placement fees at volume, buying a programme for unpredictable demand, and hiring permanently for temporary work account for most wasted spend.

Paying per hire at volume. The most common and most expensive. A company hiring eighteen people a year at 20% on $120,000 salaries spends $432,000 on fees. The same plan under a programme costs well under half that. The reason it persists is that each individual fee looks reasonable in isolation, and nobody totals the year until the finance review.

Committing to a programme for demand that never arrives. The mirror error. A funded company plans thirty hires, signs a twelve-month RPO commitment, then the market shifts and they hire nine. Project RPO and placement fees both handle uncertainty better than a fixed programme, and any provider who will not discuss that is optimising for their revenue rather than your outcome.

Hiring permanently for work with an end date. A twelve-month integration project does not need a permanent engineer, and the cost of the mistake is not the salary, it is the severance, the morale damage, and the manager time spent managing someone out of a role that was always going to finish. Staff augmentation exists precisely for this and is routinely underused because permanent headcount feels more committed.

Fact

90-day replacement commitment. If a placed hire leaves within 90 days, we replace them under the agreed terms. Ask any agency whether their guarantee provides a replacement or a refund, and over what period, because those are materially different commitments that get conflated in most contracts.

What Runs Underneath All Five

Whichever model you choose, the screening, sourcing, and portal are identical.

Round one, already done

Every candidate completes an AI first round before you see them: video, coding, phone, or the English test.

Every applicant ranked

The AI Resume Screener scores the full funnel against your brief, so nothing strong gets buried under volume.

Thousands of recruiters

The Recruiting Partners network works each role nationally, paid on placements, every submission passing the same screen.

Panel rounds in Hyring Meet

Interviews are scheduled and held in Hyring Meet, so invites and recordings stay attached to the candidate record.

One portal, no chasing

Every candidate uploaded with recording and score, clear stages your whole team sees, feedback on the profile instead of an email thread.

Transparency after the hire

Augmented teams run on Insight by Hyring, employees seeing their own data first. SOC 2 Type II and ISO 27001 certified.

Written by

Adithyan RK

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CEO & Co-founder, Hyring

18+ years of experience

Adithyan RK is the Co-Founder and CEO of Hyring, an AI-native recruitment platform that has run over 900,000 AI interviews for companies ranging from early-stage startups to the Fortune 500. He has spent 18 years building technology businesses, starting with a digital consultancy in 2008 and a staff augmentation firm in 2017, before founding Hyring in 2022 to rebuild hiring around evidence instead of guesswork. Read more

Expertise

AI RecruitmentAI InterviewsRecruitment AutomationHR TechnologyHiring AnalyticsApplicant TrackingRecruiter Operations

Fact checked by

Surya N

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CTO & Co-founder, Hyring

6+ years of experience

Surya N is the Co-Founder and CTO of Hyring, where he architected the AI interviewing engine that has now conducted over 900,000 interviews for companies ranging from early-stage startups to the Fortune 500. A mechanical engineer who moved into artificial intelligence, he spent 6 years building AI applications inside a technology consultancy before co-founding Hyring, and wrote the first version of its AI interviewer from scratch. Read more

Expertise

AI Interview SystemsConversational AIInterview Fraud DetectionPlatform ArchitectureMachine Learning EngineeringApplied AISpeech and Voice AIBias Testing and Model Evaluation

FAQs

It depends entirely on volume and duration, which is why this page publishes the comparison rather than a single answer. On a $130,000 role, first-year cost ranges from about $9,500 under an RPO programme at fifteen hires a year to about $65,000 under contract staffing at a typical 50% markup.