The interviewer wants to see that you understand the fee structure at Randstad or at least staffing agencies in general. Depending on your region, this response could vary as there are different rules and regulations surrounding staffing and recruitment around the world.

For the most part, a staffing agency makes a profit in three ways:

1. Permanent placement fees
2. Temp fees
3. Retainer based searches

Permanent placement fees are usually a set percentage based on the ideal candidate's salary. Let's say that a staffing agency is asked to headhunt a chemical engineer. The staffing agency finds the perfect candidate, and that chemical engineer comes with an asking salary of 100K per year. The hiring company would pay (in addition to the 100K salary) 18-25% of that number as a permanent placement fee. So, a one-time 18-25K fee.

Temp fees are a surcharge in addition to a temporary employee or contractors' hourly wage. Assuming the same chemical engineer is working on a 12-month contract for an oil and gas company. The OG company does not want to add this engineer to their permanent payroll or pay the engineer's employment insurance and other government-required fees. The staffing agency will take on the role of 'employer' and charge the additional costs plus a commission to the OG company. Let's say the chemical engineer is asking for 40/hour. The staffing agency will charge the OG company 55/hour, giving 40 to the contractor and taking 15 as an administration fee and commission.

A retainer is a fee that is paid in advance to secure the services of a staffing agency. Primarily retainers are only requested by high-end executive search firms who conduct long, complicated searches for talents such as surgeons, lawyers, professors, and CFOs. In this instance, the hiring company would pay a large sum upfront to the agency and then the remainder of their fee once the ideal candidate accepts a job offer.

Chances are, Randstad will be paid by perm or temp placement fees only. Speak to the interviewer briefly about fee structures, showing that you come from a place of full understanding.