How much do agents take?

[eek]

A standard rate for a contractor in my industry is 500, agents add 15% on top. 75 quid per day * 252 working days = 18,900 a year per placement for making a few phone calls? I honestly don't know why companies don't do their own recruitment it seems much cheaper and effective given that every agent I have ever dealt with was useless.

252 working days a year?

[cannon999]

Yeah, because the only time an agency is ever incurring costs is during those few phone calls, right?

OP, the rate can also change too, eg, once, a contractors renewal puts them past, eg, the 2 year period at a client, the agency commission could drop from 10% to 5%.

What other costs are we talking about here exactly? Putting up job adverts that cost a few quid? Paying a few quid to accountancy firms to keep track of the money being passed around? Don't make me laugh.

[eek]

What other costs are we talking about here exactly? Putting up job adverts that cost a few quid? Paying a few quid to accountancy firms to keep track of the money being passed around? Don't make me laugh.

Ignore that.

For the past 20+ years every year a set of contractors will set off and try to find a mechanism that allows them to bypass agencies.

And it always fails because most contractors have day jobs that mean they don't have the time spent ensuring they have the sheer number of contacts required to ensure you hear about a contract quickly enough.

The reality is that clients are happy to pay agents a fee for doing the job of finding decent candidates for them and we use agents because that is the cheapest way to find work

Now in theory you could create an electronic marketplace and that would allow end clients to bypass agencies but most end clients use agents because they can't afford to spend x days sanity checking all applicants, so they are happy to pay agents a 15% fee to do that work.

[malvolio]

What other costs are we talking about here exactly? Putting up job adverts that cost a few quid? Paying a few quid to accountancy firms to keep track of the money being passed around? Don't make me laugh.

Well if you can't see the joke.... aka if you can keep your head when all about you are losing theirs, you really don't understand what's going on.

Agents have to be paid, regardless of results. They get paid more if they have a result, but that comes out of their margin. 95% of cold calls get nowhere, that's wasted effort in terms of income. They also have to have a desk, a telephone, heat, light (not all of them work in caves) and secretarial support (someone has to do the reference chasing). Someone also has to find the clients and do all the donkey work to cover due diligence and getting on PSLs. Someone has to deal with stroppy contractors. Someone has to do the accounting. Someone has to do all the legal stuff (of which there are loads). someone has to recruit and manage the donkeys that we have to deal with. Someone has to pay for the advertising costs and licences for the two or three tools they use to post requirements to multiple boards.

I spent several years working with a couple of the big agencies on looking into setting up a viable, direct-to-client recruiting services. One thing that killed it off eventually was the overheads costs, which are several times more than most companies. You really have no idea.

[Lance]

I honestly don't know why companies don't do their own recruitment it seems much cheaper and effective given that every agent I have ever dealt with was useless.

You don't know why. But they do and will continue to do.

[BlasterBates]

What other costs are we talking about here exactly? Putting up job adverts that cost a few quid? Paying a few quid to accountancy firms to keep track of the money being passed around? Don't make me laugh.

PM's don't have the time to put adverts on jobserve and filter CVs that's why they use an agent.

If they did go through all that hassle, they're not simply going to pay the contractor more they would pocket the difference for themselves, so as a contractor you would gain nothing if a client decided to bypass the agency.

[northernladuk]

What other costs are we talking about here exactly? Putting up job adverts that cost a few quid? Paying a few quid to accountancy firms to keep track of the money being passed around? Don't make me laugh.

Really? You really think the only costs to a business are putting adverts up and an accountant? What about people and infrastructure for a start?

[vwdan]

The agents don't take anything, you do.

I agree with everything you say apart from this bit - I know what you mean, but I always thought it was a pretty weak way of looking at it. Do agents add value - yes, I think that's undeniable. But, fundamentally, you could run a project with out them - you can't run a project without the contractors/staff.

Pretty much every customer will view the cost as a cost for the resource - including agency margin. Not an agency/recruitment cost.

Or, to put it another way, if the agent doesn't find the right resource, then there's no cost and they earn zilch. So we're very much enabling them to earn money, albeit in a symbiotic kind of way.

[ComplianceLady]

Before I worked in the recruitment sector I had a dim view of the charges. Not saying there aren't bad apples in the sector but it's a service and people pay because usually it's much cheaper to pay an agency than bring the resourcing, payroll and risk in-house. Efficiencies of scale and all that.

In terms of cost there are options - blind margin i.e. you quote a charge rate only, fixed mark up i.e. % of contractor cost or rate card - contractor pay varies by around £100 but the agency fee is the same. rates vary depending on sector, payment terms, volume etc.

[northernladuk]

I agree with everything you say apart from this bit - I know what you mean, but I always thought it was a pretty weak way of looking at it. Do agents add value - yes, I think that's undeniable. But, fundamentally, you could run a project with out them - you can't run a project without the contractors/staff.

Pretty much every customer will view the cost as a cost for the resource - including agency margin. Not an agency/recruitment cost.

Or, to put it another way, if the agent doesn't find the right resource, then there's no cost and they earn zilch. So we're very much enabling them to earn money, albeit in a symbiotic kind of way.

I could be wrong but I think what Mal is saying you get 100% of the rate the agent is offering. You shouldn't look it is as a lump of money the agent is taking something fromm. The client charge is none of your business. He's talking about looking at it properly from a commercial and contract chain perspective I think.