Staffing Agencies Cut/%

[iggyntangs]

Hey all,

Just quick question about what is the norm for a staffing agency to take off of you when offered a job?

I was quoted an hourly rate for a 3 month contract at a company from my staffing agency, I was then told that my staffing agency will let me know what my end hourly rate will actually be (after they factor in their own cut, based on a) placing me in that job and b) doing my accounting/finances for me to prevent myself from having to become incorporated etc.).

Anybody have any information to load myself with to know what rate they come up with at the end of the day and if it's fair or not?

Thanks in advance.

[8sPOT]

I know some take a weekly amount, say $100 per week. And others charge between 8%-12%. This is for Roevin and CBM projects anyways.

[iggyntangs]

I'm still unclear on the amount they will take, all I was told was I will be told what my actual hourly rate will amount to once they factor their cut.

Also I'm not sure if this is the right line of thinking or not, but I'd think that since contract term is short the cut they take may be less?

[killer_carlson]

zero.

It is contrary to the provisions of the Fair Trade Act Regs for employment agencies for them to collect money from the employee, only the employer.

I get really steamed when groups try to find an end around these regs. The costs they charge you for "other services" should also be in line with industry standard. Don't be afraid to shop around and do it yourself or hire a more price competitive group.

http://www.qp.alberta.ca/1266.cfm?pa...0&display=html

See section 12.

[iggyntangs]

^ With what you're saying though...if they quoted me an hourly rate that is being offered by the company, I'm assuming then that the cut they are taking/charging is to the company which in turn reduces my end hourly rate?

Meaning they are stil doing things legally as you state above, but my end hourly rate is reduced...at which point I guess I'm just wondering what is a normal amount for them to charge the employer (affecting my end rate)?

[8sPOT]

Yes I should clarify, the amounts I mentioned are paid by the employer directly to the staffing agency. I may have worded that incorrectly.

Typically the employee is not even aware of the amont the agency receives as that is between the agency and employer.

[CaptainCrunch]

I've never seen that. Usually they don't take a cut off of your check. They bill the employer based on the hourly rate. In other words there's a markup that you should never know about.

If they're billing you out of whatever offer is made (IE they're going to pay you $10.00 an hour and we're going to take a buck an hour off of your check) You need to find another staffing firm.

[old-fart]

Crunch is correct - it is generally 2 different deals.

Staffing Agency makes a deal with Company A to provide someone at, say, $30/hour.

They hire you to fill that role and pay you, say $27/hour. Staffing company make $3/hour for their trouble and "handling the accounting paperwork". Generally, they don't tell you what the amount they are charging the company is, they just tell you what they are paying you. Depending on the company and what they are giving you for their "pimp fee" will depend on what a reasonable amount is - are they paying you like an employee (covering their share of CPP and EI for example), are they providing any health benefits, do they cover any additional liability insurance that some hiring companies require, etc. All those could account for some of the pimp fee, so make sure you fully understand what you are getting ...

[CubicleGeek]

From my experience as well, it is not a fixed amount or percentage above and beyond what you are getting from the staffing agency. Your rate tends to be based more on how well you're able to negotiate with the agency.

Two people going through the same agency for the same type of role to the same client could both say be charged $100/hr but person A might make $70 and person B might make $80. The staffing agency is always trying to maximize what they can get for you regardless of what you're asking. It seems that the only advantage for asking for less is that you may get placed first since you're a higher margin for the agency.

At least this is how it works for IT professionals - I've both been an independent contractor and someone that brings in contractors.

[iggyntangs]

So what I'm hearing is typically I shouldn't know about the TOTAL fee, just the rate that I will be getting?

I was definitely told what the company is willing to pay and the staffing agency would get back to me on what my end rate will be.

In terms of the agency itself, I know they will be taking care of my accounting/taxes paperwork for me since it is such a short term contract and to avoid me having to incorporate myself.

In terms of other offerings they provide I know they provide some form of WCB/limited liability insurance to me, that's about it though.

[goodyear]

I was hired by a temp agency that for a short-term contract job at an O&G downtown. I was paid $18.00/hr.

However, because my placement was in accounts payable, I was able to find out later on that the agency was being paid $30.00/hr by the company that I was working at.

A pretty considerable cut.

[alan21]

Some agencies charge the hiring company a one time fee and none of the employee's salaries is taken be the agency.

[CubicleGeek]

Usually one time cut is for FTE only and that would be some fixed percentage of their salary. I've never encountered a major agency that will take a one time cut for a contractor.

[InSutterWeTrust]

The company I work with has been partnering with some agencies for some professional hires, such as sales positions. In those contracts I have seen fees from 15-25% of the candidates first year compensations. Hourly labor roles, I've seen a charge of $24 per hour and the candidate gets paid about $17 per hour.

[darthma]

Depends on the industry and depends on the agency. I know that accounting temps have considerable cut associated with them (30% is not unreasonable). Temp placement is an entire industry in itself. Re: OP having them doing accounting finances etc, I'd just call that 'overhead'.

[jayswin]

Originally Posted by CubicleGeek

From my experience as well, it is not a fixed amount or percentage above and beyond what you are getting from the staffing agency. Your rate tends to be based more on how well you're able to negotiate with the agency.

Two people going through the same agency for the same type of role to the same client could both say be charged $100/hr but person A might make $70 and person B might make $80. The staffing agency is always trying to maximize what they can get for you regardless of what you're asking. It seems that the only advantage for asking for less is that you may get placed first since you're a higher margin for the agency.

At least this is how it works for IT professionals - I've both been an independent contractor and someone that brings in contractors.

Yeah, I bring in temp workers from time to time, and my account is charged $20/hr, but some guys come in and say they're actually getting $14/hr, while others will come in and say they're at $10/11 hr.

Seems like a pretty good business to get into.

[CaptainCrunch]

Its a pretty tough business to work in, its tough to find good candidates, and usually you have to do a lot of testing depending on position. In industrial you deal with a lot of fricken flakes who just decide not to show up for work so you have to scramble for replacements.

Theres a guarantee in place, more on perm then temp, but you usually end up using that guarantee on more then a few occasions so you end up working for free.

When your main product is people, its an unpredictable business.

Plus I can't tell you how many just mentally deranged people, and people that are entirely full of crap apply for every job out there.

Its not a fun job.