Indeed, hence the Recruitment Fee I mentioned, which is the same thing by a different name.
Do recruitment agencies take a cut?
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Indeed, hence the Recruitment Fee I mentioned, which is the same thing by a different name.
Both my wife and I have used Reed in the past (my wife's firm does currently) and they never took any 'cut' from the employee directly, and my wife assures me they do not do so currently for anyone they use either by recruitment or temporary placement.
She may be paying for other services supplied to her by Reed, such as training or CV creation or other services unrelated to her placement directly.
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You're talking about contracting though (own limited company or umbrella, some freedom to negotiate rate etc..), some of the posters in here are talking about temping agencies i.e. low paid office work where the company is billed by the agency, agency takes a relatively large % and then pays the temp a fairly modest rate via PAYE.
Soldato
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It's the same basis, though. In terms of how it works. Just demand is higher at the lower end so it is a lot harder to negotiate.
Mine didnt take a cut however was taken on after new laws came in place meaning had to be paid same as a normal worker and the last week got paid via agency found out that;
My pay before tax £800 cost to company £1200!
Employers Ni is ~£90 making them £300
My pay before tax £800 cost to company £1200!
Employers Ni is ~£90 making them £300
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Soldato
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I used to work as agency staff in an NHS hospital. They paid us £7 per hour. They also paid the agency £7 per hour (effectively spending £14 per hour for menial roles).
Now when you consider how many agency staff they hire (which is at least 80% of "hotel services", ie cleaners, porters, kitchen etc) then that all adds up to one hell of a waste of budget.
Now when you consider how many agency staff they hire (which is at least 80% of "hotel services", ie cleaners, porters, kitchen etc) then that all adds up to one hell of a waste of budget.
We have temps with us, pay the agency one rate, they are employed by the agency and get paid a lesser rate (so we pay £12 an hour and the temp gets £8, agency makes £4 an hour but uses that to pay them holiday plus running costs)
The thing that I would add that now new legislation has it that when you have had a temp for three months they must be given equal pay/entitlements on holiday to the rest of the staff you employ doing the same job. So you end up paying the rate you would have paid your normal guy plus the agency fee to the agent and then they pay the temp the same rate as the guy would have got if he was working for you. There are even little clauses now that stop you dumping a temp at 3 months and getting a new one to avoid it.
As for recrutement, yes, a flat fee is payable and normally refunds if the new person leaves within 1/2/3 months of employment.
The thing that I would add that now new legislation has it that when you have had a temp for three months they must be given equal pay/entitlements on holiday to the rest of the staff you employ doing the same job. So you end up paying the rate you would have paid your normal guy plus the agency fee to the agent and then they pay the temp the same rate as the guy would have got if he was working for you. There are even little clauses now that stop you dumping a temp at 3 months and getting a new one to avoid it.
As for recrutement, yes, a flat fee is payable and normally refunds if the new person leaves within 1/2/3 months of employment.
Soldato
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When I went through a recruiter, they charged 3 figure fee + 30% cut and then when the company wanted to take me on they wanted 4 figures. At the time made me want to go into recruitment!Indeed, hence the Recruitment Fee I mentioned, which is the same thing by a different name.
I think I owe you an e-mail at some point too /aside
I have worked for agencies on and of for 30 years. A lot of things have changed.
I work in the building trade and always as self-employed. I have always been paid more money than the companies employees. The only money i had stopped from my wages, was Tax.
But since coming back to this country 10 years ago, things have changed. Now you have to use a composite agency to get paid. Seems you can`t work for an agency as a self employed person. So you register with a composite agent, the Recruitment agency pays them, they pay you, minus a handling fee. Plus £3 a week for Public liabiblity insurance, for you don`t` have your own policy.
How it works for PAYE, i don`t know.
I work in the building trade and always as self-employed. I have always been paid more money than the companies employees. The only money i had stopped from my wages, was Tax.
But since coming back to this country 10 years ago, things have changed. Now you have to use a composite agency to get paid. Seems you can`t work for an agency as a self employed person. So you register with a composite agent, the Recruitment agency pays them, they pay you, minus a handling fee. Plus £3 a week for Public liabiblity insurance, for you don`t` have your own policy.
How it works for PAYE, i don`t know.
If this is the case, which seems somewhat dubious, it could only be for the first 12-weeks of the assignment.
After that there is parity of pay with what a 'normal' worker doing the exact same job would receive - same wages, same holiday entitlements, same everything. Even expenses.
They don't pay the agency a higher 'rate' at all - they pay the agency your hourly rate, plus NI, plus holiday and an admin fee on top.
And it's the latter of those which the agency takes as their 'cut' from placing you at the booking in question.
Then either her, her friend or both of them are lying or extremely thick.
Agencies don't take a cut directly from your wages. Their fees are taken before the calculations about your pay are even made and REC wouldn't be too pleased about any funny business.
The only time an agency can legitimately deduct money from your wages is for physical items - something like steel-capped boots or high-vis jackets for industrial-type workers. And even then you'll have to sign something to agree the deductions and you'll have received something in return.
Agencies don't take a large percentage cut - most will be lucky to get 15% of an hourly wage as their 'admin fee' from a typical position.
And that 'cut' is never even considered as part of the hourly wage that a temporary worker would receive. It never factors into the equation and the worker is never going to see it.
Well obviously the worker is never going to see it, but to argue that it never factors into the equation is flawed - if you've got a certain budget for headcount within a dept then agency fees eat into and therefore reduce that budget. Obviously an agency doesn't take a cut of your pay directly, they are however earning their profit from the same budget used to employ you. The company is spending X per hour for each temp and the agency is collecting a % of this.
This used to have a more visible effect - I had a summer admin job before uni at a brokerage - I was earning £1 an hour more than the guys employed via an agency and was cheaper to employ than them. It seems these days there is legislation to protect against this but previously it didn't seem to be uncommon for agency temps to take a hit and earn less than employees doing the same job. These days the effect of agency fees on budgets is going to be more dispersed.
It doesn't factor into the equation.
Agency fees are a moveable feast - the one factor in the hourly fee that is liable to move at will. And most agencies will simply take whatever is left over from the originally budgeted p/h fee once the temp's hourly wage, NI and holiday pay are taken into account.
Sure, they might try and squeeze the client for a little extra if the candidate is deemed worth it, but no agency worth their salt is going to give up a job purely on the basis that they can't make themselves their minimum allotted hourly admin rate.
The fact is, most don't have one in the first place. Temporary workers keep things ticking over but don't really help pay the wages - it's the permanent placements that make the money.
And you know this, how?
Aye, Recruitment is a decent scam that's for sure....I'm back in the UK next week..drop me a line.
It depends if the agency is finding someone permanent for the employer, in which case the agency gets a finders fee or if the employee is contracting through the agency, in which case they take a cut of the hourly wage.
MW
Soldato
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Sorry for being totally off topic, but every single day I see the thread title with an 'n' somewhere in the middle of the word 'cut'. And I have to look again.
Just had to get that out of my system. Hopefully it will stop happening.
Just had to get that out of my system. Hopefully it will stop happening.
Working through an Agency atm, the company gets charged 30%
Therefore i technically see a loss of earnings of 30%
For me to get this amount back, the company will have to pay more. So much easier to go through the companies books but they wont have it. Stupid headcount. Company could save 10% and i gain 20% - or visa verse - BUT NOOO.
Therefore i technically see a loss of earnings of 30%
For me to get this amount back, the company will have to pay more. So much easier to go through the companies books but they wont have it. Stupid headcount. Company could save 10% and i gain 20% - or visa verse - BUT NOOO.
So bloody true. I have no idea how they justify their fees.