Well they won't take it directly from the person recruited by the agency but it quite obviously does affect one's salary. A company will have X money available to fill a position and some of that goes to the agency for filing the position.
Do recruitment agencies take a cut?
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Well they won't take it directly from the person recruited by the agency but it quite obviously does affect one's salary. A company will have X money available to fill a position and some of that goes to the agency for filing the position.
She's emailed her friend to find out a bit more. Will update the thread when she hears anything
Well - the friend emailed the new girl back. *Apparently* she's been there for three months and each month 5% is being taken by Reed. That's all I know folks.
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And none of that money will have ever been allocated to a potential candidate's salary.
If an agency would have charged them £5k for a successful placement, don't think for a second that a direct applicant will get even a sniff of that money - it will go back to the HR pot and be looked upon as a cost-saving.
Employers don't have a total figure in mind that they have to spend when recruiting someone, be that a temp or a permanent employee. They'll have an idea as to the salary that person ought to be receiving and then the associated costs of recruitment get added on top of that.
It's just such a weird figure to be deducting, agreed or not.
Without seeing her payslip, which isn't likely to happen, it's pretty much impossible to speculate further on what the deduction is.
But it would have to have been authorised and agreed between the candidate and the agency at some point.
If she's worried, tell her to get on the phone to REC and go through it with them. But try speaking to her local branch-office of Reed first.
From personal experience, we do not hire from recruitment agencies any longer. We'd rather advertise a position with a higher salary, and get a better quality of candidate through the door than pay a recruitment agency 10-20% and offer a lower salary.
An issue we had with recruitment agencies is that they were sending plainly unsuitable candidates through to interview with us without any screening as to their skills and suitability for the role(s) we were offering.
An issue we had with recruitment agencies is that they were sending plainly unsuitable candidates through to interview with us without any screening as to their skills and suitability for the role(s) we were offering.
That sounds pretty realistic actually, perhaps I was being too simplistic.
Do you work for an agency?
Well that was my initial thought. Let's imagine I have 100k to employ 5 people for a years work. I can either get applications directly from candidates or go through an agency. It makes sense that the former group will get a higher salary. Saying that I have no experience with how it might work in larger organisations.
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Likewise when I am looking for a new job these days I do not go near recruitment agencies. I prefer to go direct and negotiate a better deal.
In my industry I believe some recruitment agencies want 30% of the value of your base+bonus. Quite a bit considering really all they are doing is finding out you want a job and passing the CV onto their HR contact at a company.
The unsuitable part is no surprise, one agency really drove me up the wall by sending me to wholly unsuitable jobs. I'm Pre-sales technical in Storage / Virtualisation / etc and they wanted to send me to hands-on SQL DBA roles!!
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Once you pass your probation period they get commission based on your salary and sometimes they have fixed fees which vary. Very similar to an estate agent.
Sometimes they get more money when you pass 1 year.
The It company i work for has a £1500 referral policy. If i refer someone and they pass the three months probation i get £1500 (before government steals half of it.) so if anyone has a lot of experience and wants any 2nd line IT jobs in legal sector trust me your cv. But don't bother sending me a cv if you have no experience. Location is central London.
Sometimes they get more money when you pass 1 year.
The It company i work for has a £1500 referral policy. If i refer someone and they pass the three months probation i get £1500 (before government steals half of it.) so if anyone has a lot of experience and wants any 2nd line IT jobs in legal sector trust me your cv. But don't bother sending me a cv if you have no experience. Location is central London.
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This is something that has always annoyed me at my old work.
To refer someone for a pretty senior role you'd get about £3000. Getting someone via a recruiter they'd spend about £30-70k+.
It really needs to be about £20k for internal referrals! £10k after tax and i'm interested!
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Well £1500 is fairly reasonable, this one guy at work referred two people who has passed their probation so he got close to £2k after tax which is ok.
I can't just refer anyone though because it is putting my reputation on the line and if i refer someone who is crap then it makes me look bad.
I can't just refer anyone though because it is putting my reputation on the line and if i refer someone who is crap then it makes me look bad.
I guess it's fair to say I've seed it from all sides, having been in recruitment, worked in HR and been an agency 'worker' for many of the jobs I've had.
I can't speak for every single company out there, but I've never come across a position advertised that would have been more highly paid were it filled directly.
There's always a cost of recruitment factored in somewhere. And any agency fees that aren't paid are just a cost-saving.
Once you factor in the cost of advertising the role and responding to all applicants, arranging and carrying out preliminary interviews, arranging second interviews, referencing the prospective candidates and all the other things you need to do, going direct isn't always the cheapest option.
And it's very rarely the least time-consuming.
Well, that's not all they are doing, but for some industries, yes, it's pretty much just flinging CVs at a client and hoping one will stick.
But don't tar all recruitment agencies with the same brush. Like with most things, you get your good and you get your bad.
I wouldn't have got a look-in at half the roles I've had in my career if it hadn't been for the agency I use, and they look after me extremely well whilst making a pretty penny out of me in return.
Rubbish. It is taken into consideration. I've had contracts fall through before because an ageny was asking for too much on top of my hourly rate.
Not true. Sickness, holiday, employers NI, other perks like medical, pension etc, all adds to the cost of paying a member of staff.
Where my girlfriend used to work you got 33% more if you were prepared to be self employed as they calculated that is what it cost them to actually employ somebody especially if you then factor in maternity/paternity/discplinaries/redundancy.
So a company paying 20% more to an agency can be a good deal for the company.
Equally you can save a lot of money sometimes. I know a company where permenent staff are on £17 p/h and agency staff get paid £10 p/h. Pretty sure they aren;t paying the Agency company £17 p/h for the staff. The company is made up of 2/3rds permanent and 1/3rd temp agency staff and all are doing the same job.
I used to work in a similar place with a similar mixture of staff as their work was very up and down and they can lay off temp agency at no cost and short notice.
On the permanent side, unless a company has exclusively given the job hunting role to an agency then it can work against you if your aplication was submitted through them. Given that you get many equally competant people applying to do most jobs nowaways and say it's a £30k job I would always give the job to the person who wasn;t through the agnecy as that would save £6k in fees (assumes both candidates are equal). I have also factored in the agency fees and offered the person less than somebody else purely because of the fee.
Then either you were pitched at too high a rate and the maths didn't work out, your agency was getting greedy and wanted too much on top or they were lying to you and the role went to someone else.
If I'm granted a budget for £18p/h for a head, that's all the agency is going to get. How they want to split it is up to them - not me.
And the same goes when I'm on the other end of the phone and I'm told that's the maximum charge rate - if I pitch someone that goes over the rate, the client simply won't pay it and I'd have to take it out of my 'cut' to get my candidate through the door.
EDIT: Not that I've ever had a client, or even been the client, who told an agency the maximum charge rate. It's always the rate you intend to pay the candidate p/h and then you work out the rest on top of that.
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They must have a high turnover of staff then, given that the lower-paid workers would be legally required to receive parity of pay after 12-weeks of being in those roles?
This was significantly more than £18p/h tbh. They were offered 10% on top but wanted 15 and would not come down below 12%.
Good thing is the manager who interviewed me and liked me and advised I go through another agency who promptly took 10% and I was in the job a week later at no drop in rate for myself
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The agencies we work with take a cut depending on if you are perm or temp staff:
Temp - Take a % of your pay per hour
Perm - 20-25% of your salary to be billed to company (Doesn't affect candidate)
Temp - Take a % of your pay per hour
Perm - 20-25% of your salary to be billed to company (Doesn't affect candidate)
Is that a recent thing? I am going back a few years here so things may have changed.
It all depends on whether it's permanent or temp basis. For example, the heAdhunting firm I run take anywhere between 20% to 30% of the total compensation of the candidate on a one year basis - of course, paid by the hiring firm. Occasionally multiple year compensation can sometimes come into the equation too, but very rarely.
This is purely on a permanent deal, and temp and or/contract agencies vary there fees (amounts and structures) based on a number of factors (industry, seniority, etc.).
This is purely on a permanent deal, and temp and or/contract agencies vary there fees (amounts and structures) based on a number of factors (industry, seniority, etc.).
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The rate is irrelevant and my original point still stands.
You, as a temporary worker, will never see that admin fee that the agency will take as their cut for having you work through them. It doesn't factor into your hourly wage and you wouldn't get paid it for approaching the company directly.
Your hourly rate will be fixed, your NI and holiday pay will be a percentage of that and once all those things are taken into account, the agency will either get the rest - assuming an overall hourly budget has been set and will be paid regardless - or they'll charge an appropriate percentage or flat fee.
In your case the agency who initially put your forward were being greedy and lost out. Horses for courses though really - they obviously had their reasons for standing their ground.
Interestingly, they'd probably have every right to bill the client for a 'finders fee' as while you ended up working through a different agency, it was the first one who introduced you and you should therefore be 'owned' by them.
It's recently come into force, but it's been common practice for a fair while now.
Obviously it was less prevalent in those industries where it was more about the 'hands on deck' than the quality of the worker, but it was still something taken into account when working out rates, etc.