Reply to: Agency Profit Margins

[padinka]

Back on subject...

SSS recently published their annual report for the period ending 30/11/2006 http://www.sthree.com/Report_Accounts2006.pdf

If I read it correctly:

> Overall gross margin: GBP 135.5m (34.5%)

> Profit on contractors: GBP 69.7m (21.3% gross margin)

> Average gross income per contractor/day: GBP 64.91

> Average permanent placement fee: GBP 8,563

This suggests the average SSS contractor is billed out at GBP 304.74 which is rather lower than I expected.

Padinka

[MarillionFan]

I see nothing wrong in exploting the stupid.

[DodgyAgent]

I wasn't whining - I just think that the margin should be clear to the client as he wants someone working at a reasonable rate that is not looking to jump out of the window at the next opportunity, neither the contractor would be happy to be sent back home just because the agent is charging 50%. It might be fine for both but at least they do know what they are up to. That's the way it works for permanent jobs, doesn't it? It should be applied to contracts too. And perhaps would make the EB sector more competitive, rather than in the hands of a few oligarchies like now, don't you think?

Put like that it is a reasonable argument, I am just deeply suspicious of politicians motivation with regards to setting legislation.

[Francko]

I counter that the contractor model is the most effective and efficient way to employ someone, but some of you commit gross hypocrisy when you start whining about your lot.

I wasn't whining - I just think that the margin should be clear to the client as he wants someone working at a reasonable rate that is not looking to jump out of the window at the next opportunity, neither the contractor would be happy to be sent back home just because the agent is charging 50%. It might be fine for both but at least they do know what they are up to. That's the way it works for permanent jobs, doesn't it? It should be applied to contracts too. And perhaps would make the EB sector more competitive, rather than in the hands of a few oligarchies like now, don't you think?

[Francko]

For a reasonably good account manager then yes, for a resourcer it will be considerably less. For a high flyer (and there are not many of those) then £100 k plus.

How is a high flyer defined in your industry? Is it the agent that deals with more senior people or the ones who places the max quantity of bods?

[DodgyAgent]

Does this mean that it's fine to steal as long as you steal from rich people?

You Franko in the eyes of everyone else are the rich. Like it or not if a recruitment agency is seen to be exploiting you, no one will give a damn. In the eyes of others you earn tulip loads of money without taking any responsibility for the work that you do. To most lefties you are tax avoiding scummy parasites. Interestingly you try your damndest to apply this tag to agencies but in reality you come across merely as rich priviliged whingers.

I counter that the contractor model is the most effective and efficient way to employ someone, but some of you commit gross hypocrisy when you start whining about your lot.

[threaded]

They laugh when they pull that one off.

I thought the 'pulling off' was the shoot the biscuit game during the celebratory party.

[wendigo100]

Well I found out today that for some really obscure reason the agency myself and a few other contractors are with is paying us all the same rate but charging the client £100 per day more for me than the others? How do they figure that one out??

Without you knowing, the agency has told the client: "sorry, but he'll walk if he doesn't get an extra £100."

No risk to the agent.

It's a nice little trick. They laugh when they pull that one off.

[Celtic_Charmer]

Well I found out today that for some really obscure reason the agency myself and a few other contractors are with is paying us all the same rate but charging the client £100 per day more for me than the others? How do they figure that one out??

[milanbenes]

I suppose through the eyes of those hard working british families who seek fairness the answer is yes

Milan.

[Francko]

Estate agents have to disclose their fees as do financial advisors, but these people are drawing their pay from private individuals who are easy meat for the unscrupulous sales person. As far as the agent/contractor is concerned no contractor is going to be exploited to the point of suffering major financial hardship. So from a risk point of view it is not really necessary.

Does this mean that it's fine to steal as long as you steal from rich people?

[Bagpuss]

Sorry guys you are just not important enough and nor are you regarded as victims. In fact in the eyes of legislators you are the scum of the earth and the very last group of people that need any form of protection. In fact in the eyes of New Labour you are probably further down the "shoeing order" than us agents (who pay NI) :

This is why all contrators should strive to find direct assignment and organise their own un-value added affairs

[DodgyAgent]

Bloody hell, I never realised that I always wanted to know what the spiveratti made! So does that mean 40-50k is typical for a contract recruitment bod?

For a reasonably good account manager then yes, for a resourcer it will be considerably less. For a high flyer (and there are not many of those) then £100 k plus.

[DodgyAgent]

why , Whats wrong with being transparent ? That does not harm free market economy surely.
All other kinds of agents are forced to declare their commission legally except this lot

There may indeed be some compelling arguments for agencies to disclose margins (what is the client expecting for the money? If he is paying £1000 a day and getting a £500 a day contractor then he isnt going to be happy) but it is as ever the law of unintended consequences that prevails beyond what the do gooder legislators expect.

Estate agents have to disclose their fees as do financial advisors, but these people are drawing their pay from private individuals who are easy meat for the unscrupulous sales person. As far as the agent/contractor is concerned no contractor is going to be exploited to the point of suffering major financial hardship. So from a risk point of view it is not really necessary.

Sorry guys you are just not important enough and nor are you regarded as victims. In fact in the eyes of legislators you are the scum of the earth and the very last group of people that need any form of protection. In fact in the eyes of New Labour you are probably further down the "shoeing order" than us agents (who pay NI) :

[Rantor]

An interesting example of how people use "spin" to justify their position. A contractor wishing to increase his rate seems to be a legitimate business transaction whereas any money that an agency tries to make is "spun" as "greed". Doubly ironic as 99% of recruitment consultants probably earn less than half of what an average contractor "takes".

Bloody hell, I never realised that I always wanted to know what the spiveratti made! So does that mean 40-50k is typical for a contract recruitment bod?