Recruitment Agencies - robbing b#stards or good value?

[Wayluya]

Was discussing this with a mate recently.......

How much does a Recruitment Agency take from finding someone Temp / contract / permanent employment?

I suspect it varies accross industries as we ended up talking figures of up to 30%.

My thinking was "taking 30% of someone's wages?........I could do that" :D

Anyone got any experiances? or know how the Recruitment Agency game works?


BTW I am not thinking Gangmaster!

[Drew Carey]

It depends a lot on the type of work and the agency. As an example, I know of an agency specialising in managerial recruitment who placed a freind of my step fathers as a director. The agency got a fee of 40% of his salary. His salary was 100K!!!!!!!!!

Whereas for someone at an entry level analyst / data clerk etc it tends to be capped at a certain amount. Agency I've dealt with in the past was capped at 3k for junior roles.

[Wayluya]

It depends a lot on the type of work and the agency. As an example, I know of an agency specialising in managerial recruitment who placed a freind of my step fathers as a director. The agency got a fee of 40% of his salary. His salary was 100K!!!!!!!!!


I am guessing that level needs contacts.........40% though :cool:



Whereas for someone at an entry level analyst / data clerk etc it tends to be capped at a certain amount. Agency I've dealt with in the past was capped at 3k for junior roles.

We were mainly talking suit and tie work (except Fridays?!), so my guess is that would be between 5 and 10% on a Permanent Job.

[Drew Carey]

Yeah about that......when I last got placed (3 years ago) was at 15.5k, I happened to see the invoice (ooooops) and it was 1.8k.

[simesb]

Agencies are evil personified. In some industries it is hard to apply directly for a role as they are all done through agencies. The good agencies will only put forward their best clients as effectively they are employed to pre-screen applicant. Sometimes makes it difficulty to get to the interview stage for a development role as the agency may already have 5 or 10 people with more directly applicable experience.

[Wayluya]

Agencies are evil personified. In some industries it is hard to apply directly for a role as they are all done through agencies. The good agencies will only put forward their best clients as effectively they are employed to pre-screen applicant. Sometimes makes it difficulty to get to the interview stage for a development role as the agency may already have 5 or 10 people with more directly applicable experience.

I recall that from years gone by - also frustration of often dealing with a numpty who does not understand both the job on offer or your skill set......mate still gets to deal with them (he does only Contracts) if he can't line things up himself......cropped up now as a discussion for this reason!

He was thinking "I will set me own agency - to cherry pick contracts".....I was thinking "I will do it for the money" :D

Odds on will never happen, but.........

[stewie]

Im in transport and a few years ago I was ofered a job working for one of the supermakets as a driver doing store deliveries, the guy offered me the job explained that they would only recruit from agaency drivers and told me to ring a certain agency and sign on, lo and behold next day Im delivering to supermarkets, a few months go by and I get hold of my mate one day and says 'I thought you were taking me on ? 'cant' he says 'weve got a recrutment freeze on' turns out that they had offered full time jobs to two agency drivers and the agency had demamded 4k for one driver and 5k for the other so the supermarket chain pulled the offer, the result was that the two drivers were suing the agency for restrictive practices and suing the supermarket for making and withdrawing an offer ( not sure of the tech term, but you know what I mean) Agencies ? bunch of dishonest one out there but if you,re a driver and out of work they can put food on your table.

[simesb]

The bad ones use a kind of scatter-gun approach. They pick up on key words in your CV and email you with jobs that are wholly inappropriate. The good ones work hard for their money and do a good job for their client and for you, but the good ones are few and far between.

The headhunters are where the real recruitment money is at. Approaching people already in senior positions to try and get them to jump ship - takes good people skills and networking.

[Blue_SV650S]

Who cares how much commission they take?? ... what is good (as a job seeker) is that they are champing at the bit to try and get you a job so they get their commission, which can only be a good thing! ... 8) I have found them to be pretty useless mind!! ;) ... however, the downside is they match you to certain jobs, which you can tell probably are more down to the % commission thy get than the correct job for you ;)

From a corporation point of view, it is probably cheaper to out-source this sort of stuff over having to employ people to do it, people and office space are expensive!! There will be a crossover point where it makes more economical sense to do it in house.

[simesb]

I agree Blue - the commission is irrelevant because you don't pay it, the recruiting company does!

My problem is how they often don't understand the sector they are recruiting for, or advertise fake positions to build a CV database, or approach you for inappropriate jobs. I'm redundant at the end of the month and am dealing with them a lot at the mo - they just really get on my wick...

[Ed]

When I've used an agency they charge 15% of first year salary.

Obviously, I try not to - but sifting through job applicants looking for the good ones isn't as easy as you might think. Do be aware that several people make a living out of making false applications only to allege that they were discriminated against on some illegal ground.

[timwilky]

Agencies are good and bad. As blue says, from the prospective employee perspective, they do the leg work. Know who is recruiting and get you CV out.

From the employer perspective. A good agency will only put forward suitably qualified applicants. You can almost take out 1st level interviews. However a bad agency, will lie and doctor CVs to fit a position or bombard you with unsolicited CVs etc.

Normally when I have looked to use agencies. I meet their consultant. Explain my requirements and agree a placement fee. normally 10-15%.

[Blue_SV650S]

I agree Blue - the commission is irrelevant because you don't pay it, the recruiting company does!

My problem is how they often don't understand the sector they are recruiting for, or advertise fake positions to build a CV database, or approach you for inappropriate jobs. I'm redundant at the end of the month and am dealing with them a lot at the mo - they just really get on my wick...

Yep all the points I highlighted in your post I have experienced too!!

What I find particularly annoying is when as you mentioned, I have been victim of agencies purely 'fishing' .. advertising a job, you applying, getting you in for a chat and then it becomes blatantly obvious there was no job and they just want you on their database ... I wasted a day in total doing this, ~?10 in fuel and actually got a puncture on the way there, so wrote off a rear tyre :cry:

[Wayluya]

Interesting stuff folks. Cheers. Kinda reinforces impressions.

A bit to chew over......I ain't too bothered about the business itself, just thinking whether an opportunity to "leverage" ;) me mates knowledge (of his sector) and his annoyance (with Agencies) for mutual benefit.......not thinking of being the UK's No.1.....but with his area being relatively small, possibly something that could be run with small scale to see whether a goer.......and something that could fit with me down the line......in any event I do simply like annoying folk :D

Whilst I have always liked the maxim "If you are the best no need to be the cheapest" - sounds like may be enuf scope to more than cut the legs from under existing folk price wise, if run small scale initially......

Having said that, I also like the maxim "The reason it's expensive, is due to my profit" :p

[Ed]

Remember that you need a licence to run a recruitment agency - see the Employment Agencies Act.

[gruntygiggles]

Having been an executive headhunter for some time now, I have a pretty good understanding of just how crap some agencies are!

I only took on retained search for £100k+ positions, but you should get just the same level of service and quality for contingency search.

Always meet with the recruiter. They should request this as it's the only real way for them to get a full understanding of you, your organisation, its culture and the requirements for the role(s). If they don't want this or say it's not necessary.....say goodbye, you will not be given good candidates.

Ask for a reference or to see their testimonials. Make sure they are not all annonymous. Some may be for legal reasons, but if they won't give you company/contact names for any, be suspicious. You'd want to take up references on a candidate, so you should do the same with the agent. Also, check it out. If they show you a testimonial from Joe Bloggs, HR manager @ KPMG, call his office and ask someone there to verify it. If he has given a testimonial willingly, no one will mind. If he hasn't, he'll be very grateful for the heads up!

Make sure there are sufficient guarantees in place in the contract. If they fail to supply you with a suitable candidate, or they do but he/she does not last 12 months due to being crap or leaving for another job.....they should replace him/her either free of charge or at a greatly reduced rate.

My assignments would last anything from 3-36 months depending on the position/company, so commissions were high and retainers were high, but while 10-15% is a standard rate for an agency to charge......it's only reasonable if they are doing the work properly.

I still have a good few thousand hundred candidates on my database covering all verticals, positions and salary ranges as I would add value to the service for my clients by undertaking smaller placements to save them time/money.
If you want to let me know the position you are recruiting for and the area, I can either find you someone myself or let you know the best agencies to use in that area.

Hope that's been of help,

Cheryl x

[gruntygiggles]

Was discussing this with a mate recently.......

How much does a Recruitment Agency take from finding someone Temp / contract / permanent employment?

I suspect it varies accross industries as we ended up talking figures of up to 30%.

My thinking was "taking 30% of someone's wages?........I could do that" :D

Anyone got any experiances? or know how the Recruitment Agency game works?


BTW I am not thinking Gangmaster!

Sorry, only just read this bit........It does totally depend on the sector. I would place C-level, Board members and Non-Executive board members into the Financial Services industry and also where required, just about every other vertical, but FS was my niche. I don't do it any more as my business partner turned out to be a thieving sod who I am sueing. However, I was a headhunter, so was retained for very specific searches and when placing board members, C-levels execs etc, their apointment can be a matter of public interest and greatly affect the share value of the company. If you are a blue chip and announce the appointment of Sir Richard Branson or Sir Alan Sugar to your board....your shares will sky rocket. For this reason and many others, my assignments could take 3-36 months to complete. I didn't just have to sift through CVs, interview and qualify candidates, I had to work bloody hard and was fully accountable. My reputation depended on it.
In turn, I would be able to ask 40-50% of gross first year remuneration package. Basic salary, plus expected bonus, commissions etc. I would only take on assignments of ?100k+, so there is PLENTY of money to be made doing this.

Unfortunatelt, you can't just start up doing this, you have to work like hell to build up a reputation, be able to tell a CEO of a multi national where to go if he needs it and you also need to really know how to get through to these people in the first place. You can't sell yourself to a HR manager when you want to take ?50k off him. You have to deal directly with the people at the top. They only like dealing with other people at the top, so you need giant sized balls, great contacts and the ability to get the secretary to put you through to the CEO/MD.

I'll never do this work again, mush as I loved it and the financial rewards are incredible, the stress and work that is involved, the competition and the red tape involved is no longer worth it for me.

If you really want to give it a go though, I'd happily answer any specific questions you might have!

By the way....take my DAS in a few weeks and can't wait..WOOHOO!!!

Cheryl x

[Wayluya]

Wow! - some interesting stuff there! even though wasn't planning on starting with CEO's......not sure how it would affect my "Work life (Numpty vs Cash) balance" :D

Indeed the word "planning" itself is somewhat overstating the case at the moment!

[Tim in Belgium]

My mum's husband used to be a head hunter and had his own company, rates were in the region of 30-35% commission of first year salary, but then they did provide guarantees on the candidate. Having worked in his office it is not as easy as it seems.

Edit: Just read Cheryl's thread and agree with everything there.

[kitkat]

i went to a recruitment agency about 3 years ago and got a permanent job - really quickly. it was ****e and I left after 2 days. the company complained big style as they had paid the agency £3000 for me. told them I was on trial and they should not have paid until I was taken on on a permanent contract

15 years ago when I worked for temp agency the hourly rate was about double the normal going rate. I got slightly over the going rate for example going rate £5, they charged £11 and I got £6.50 - everyone was happy - except maybe employers lol

[tomjones2]

I have sat next to the temp and full time recruiter for the a major London company and they work very hard, the agency recruiter in particular had to deal with constant stupidly from upper management and the temps themselves.

[CoolGirl]

why do companies use recruitment agencies, especially at those prices and particularly for lower end of the pay-scal jobs, when JobCentre Plus offer the same service for free?:confused: