Temporary Workers - How Much Margin for Recruitment Agcy

[AndyAudi]

Just spotted the invoice from the Recruitment Co billing the company I'm working for, is one or both of us being exploited?

I would have thought cost+30% should cover all hols/NI/Payroll Burdens/insurance etc and then a margin on top of that of say another 10%, however these guys are way over that.

[UpTheIron]

How are you employed? Are you a PAYE employee of the "recruitment agency", or are you in some way self employed?

Assuming the former, then the RA will have to cover
- employers NI (12.8%)
- employees NI (11%?)
- income tax (22% / 40%)
- appropriate insurances
- various operating costs
- profit

So if by "cost" you mean your net wage, 30% won't go anywhere near covering costs.

[AndyAudi]

UpTheIron said:

How are you employed? Are you a PAYE employee of the "recruitment agency", or are you in some way self employed?

Assuming the former, then the RA will have to cover
- employers NI (12.8%)
- employees NI (11%?)
- income tax (22% / 40%)
- appropriate insurances
- various operating costs
- profit

So if by "cost" you mean your net wage, 30% won't go anywhere near covering costs.

PAYE Employee
Cost is Gross wage, Employee NI and Income Tax Bourne by me.

Agency 30% was est Employers NI 12.8%, Holidays 7.7% (20days) + 9.5% for Admin and insurance. I would expect a margin on top of this but not as much as they seem to be billing.

[spikeyhead]

how many workers? just one or two or a hundred.

How constant is the need for workers?

[JustinP1]

AndyAudi said:

UpTheIron said:

How are you employed? Are you a PAYE employee of the "recruitment agency", or are you in some way self employed?

Assuming the former, then the RA will have to cover
- employers NI (12.8%)
- employees NI (11%?)
- income tax (22% / 40%)
- appropriate insurances
- various operating costs
- profit

So if by "cost" you mean your net wage, 30% won't go anywhere near covering costs.

PAYE Employee
Cost is Gross wage, Employee NI and Income Tax Bourne by me.

Agency 30% was est Employers NI 12.8%, Holidays 7.7% (20days) + 9.5% for Admin and insurance. I would expect a margin on top of this but not as much as they seem to be billing.

How much more are they billing for?

I would say the direct costs as above are about 30%. On top of that they have their overheads of running their office and staff. On top of that of course, unless they are a charitable organisation, they would want to also make a profit!

Even for a long term, or large contract it may be a 50% on top of what you are getting. For a short period or a single employee it may be more.

Its not extortion, just economics. People will pay if it is seen to be affordable. If not, they will go elsewhere.

[AndyAudi]

JustinP1 said:

...
Even for a long term, or large contract it may be a 50% on top of what you are getting. For a short period or a single employee it may be more.

That makes sense, I am a single employee for a short period, I was comparing what I'd seen by way of invoices for multiple long term temps when I used to approve them elsewhere (45%).

[JustinP1]

AndyAudi said:

JustinP1 said:

...
Even for a long term, or large contract it may be a 50% on top of what you are getting. For a short period or a single employee it may be more.

That makes sense, I am a single employee for a short period, I was comparing what I'd seen by way of invoices for multiple long term temps when I used to approve them elsewhere (45%).

I would say 45% is about right.

I think it is about that at both ends of the scale. Last time I looked at agency staff I was quoted something like £9.50 per hour for a £5.50 per hour employee.