Cost to employ somebody through an agency
Discussion
I did a search but couldn't find anything, so sorry if this has come up before.
Let's say a company wants to employ somebody and pay them, say, £30k + private health + company car. Taking into account everything like training, office space, computer, etc, etc. the cost is probably neared to £45-50k to employ that person in the first year?
However, what sort of costs would be added on for things like recruitement agency fees? I've heard the agency fees are often very high, is that the case?
Cheers
Let's say a company wants to employ somebody and pay them, say, £30k + private health + company car. Taking into account everything like training, office space, computer, etc, etc. the cost is probably neared to £45-50k to employ that person in the first year?
However, what sort of costs would be added on for things like recruitement agency fees? I've heard the agency fees are often very high, is that the case?
Cheers
Yep. But if you want a reasonable coverage of job advertising to generate applicants you could be looking at thousands easily (if you use web, paper, trade press etc), then you've got the hassle of having to filter the hundreds of muppets that will inevitably apply, then sift through the ones that look half decent and pre-screen them. Suddenly, when you cost in your time, £3-4k isn't all that much. Not to mention that if that person leaves you've got to go through it all again (we offer a 6 month replace or rebate facility as standard - should the employee leave) 
Give me a shout if you need help, I own a recruitment consultancy.
ETA: Happy to help a PHer even if you just want some advice.
Give me a shout if you need help, I own a recruitment consultancy.
ETA: Happy to help a PHer even if you just want some advice.
Edited by escargot on Thursday 4th February 15:31
escargot said:
Yep. But if you want a reasonable coverage of job advertising to generate applicants you could be looking at thousands easily (if you use web, paper, trade press etc), then you've got the hassle of having to filter the hundreds of muppets that will inevitably apply, then sift through the ones that look half decent and pre-screen them. Suddenly, when you cost in your time, £3-4k isn't all that much. Not to mention that if that person leaves you've got to go through it all again (we offer a 6 month replace or rebate facility as standard - should the employee leave)
Give me a shout if you need help, I own a recruitment consultancy.
ETA: Happy to help a PHer even if you just want some advice.
Cheers Give me a shout if you need help, I own a recruitment consultancy.
ETA: Happy to help a PHer even if you just want some advice.
Edited by escargot on Thursday 4th February 15:31
FraserLFA said:
Yeah, as above. However, always negotiable and could get worker on a temp to perm basis. IE, hire worker through agency, if happy with them, pay a pre agreed sum and agency passes worker over to your full employment and you never hear from them again
But the agency won't lose out on that type of arrangement - the fee to go perm might be lower but in the time you have them on a temp contract the agency will be taking a margin.Stitch said:
FraserLFA said:
Yeah, as above. However, always negotiable and could get worker on a temp to perm basis. IE, hire worker through agency, if happy with them, pay a pre agreed sum and agency passes worker over to your full employment and you never hear from them again
But the agency won't lose out on that type of arrangement - the fee to go perm might be lower but in the time you have them on a temp contract the agency will be taking a margin.You can negotiate hard at the moment as they are all fighting for business, especially if you give an agency exclusivity for a period of time on the project. Most of my friends and ex colleagues (I left the industry 3 years ago, thank god!) have seriously downsized over the past 18 months with most of them between 50% and 70% down on business from the previous years.
Make sure you also negotiate a good rebate period if the recruit fails/leaves. No recruiter wants to give back money they've earned, so they'll work damn hard to find you a suitable replacement.;)
Make sure you also negotiate a good rebate period if the recruit fails/leaves. No recruiter wants to give back money they've earned, so they'll work damn hard to find you a suitable replacement.;)
I am in the process of employing a software developer and the recruitment agency want 12.5%. This was their "1st time fee" and they have a 3 month 100% rebate if things don’t work out.
Some agencies offer the rebate but on a sliding scale (you get less and less back as the 3 months marches on) depending on how long the employee works for you before you get rid so watch out for that.
It's a costly game but as people have mentioned the idea is that the agencies only put decent candidates in front of you and do all the s**t sifting.
You might be able to negotiate a lower fee if you give exclusivity to 1 agency. If you decide to go for a few though don’t use too many as the agencies inevitably will all have the same candidates on their books and it can send out mixed messages to candidates as the agencies battle over the job.
Some agencies offer the rebate but on a sliding scale (you get less and less back as the 3 months marches on) depending on how long the employee works for you before you get rid so watch out for that.
It's a costly game but as people have mentioned the idea is that the agencies only put decent candidates in front of you and do all the s**t sifting.
You might be able to negotiate a lower fee if you give exclusivity to 1 agency. If you decide to go for a few though don’t use too many as the agencies inevitably will all have the same candidates on their books and it can send out mixed messages to candidates as the agencies battle over the job.
Mag1calTrev0r said:
... the cost is probably neared to ...[150-180% of salary]... to employ that person in the first year?
I think that's always been the case.
It's odd in this day and age that Recruitment People (who - I should point out before I make any degoratory comment - are generally good guys in the process) still account for so many job placements.
With LinkedIn-type networking and the Interwebnet generally, I wonder how they can manage to survive, since it seems to me a little like an Estate Agent role. You can imagine the world without them and then again, they're a part of life.
Where they find the right peg for the hole, they can be such great value - even at that price. But you've got to admit that they equally "cause" the turnover of staff that leads to their fees?!?
beano500 said:
It's odd in this day and age that Recruitment People (who - I should point out before I make any degoratory comment - are generally good guys in the process) still account for so many job placements.
With LinkedIn-type networking and the Interwebnet generally, I wonder how they can manage to survive, since it seems to me a little like an Estate Agent role. You can imagine the world without them and then again, they're a part of life.
Possibly because HR people are generally terrified of making decisions, have no basic people instincts and want somebody to blame if it all goes wrong to save their own skins? Hence they farm it out - problem solved.With LinkedIn-type networking and the Interwebnet generally, I wonder how they can manage to survive, since it seems to me a little like an Estate Agent role. You can imagine the world without them and then again, they're a part of life.
Simpo Two said:
Possibly because HR people are generally terrified of making decisions.
Management Boards aren't though - neither are hiring managers. They could and possibly should sideline HR in most organisations who are completely ineffective in getting the right people for the job!beano500 said:
Simpo Two said:
Possibly because HR people are generally terrified of making decisions.
Management Boards aren't though - neither are hiring managers. They could and possibly should sideline HR in most organisations who are completely ineffective in getting the right people for the job!So by implication line managers themselves don't want the responsibility - maybe because of poor training.
HR person here who is not afraid to make decisions!
thisislife said:
I am in the process of employing a software developer and the recruitment agency want 12.5%. This was their "1st time fee" and they have a 3 month 100% rebate if things don’t work out.
Ive just employed a property manager using an agency for the first time. Their email flyer with the 'perfect' candidate arrived in my inbox 24 hours after my current manager handed in her notice.The agency's opening salvo was 18% of the first year's salary (with the 3 month 100% rebate). We finally agreed on 7.5% of the first year's salary and the candidate appears to be nigh on perfect
Certainly better than some of the dross that has applied through local advertising before.
FUBAR said:
thisislife said:
I am in the process of employing a software developer and the recruitment agency want 12.5%. This was their "1st time fee" and they have a 3 month 100% rebate if things don’t work out.
Ive just employed a property manager using an agency for the first time. Their email flyer with the 'perfect' candidate arrived in my inbox 24 hours after my current manager handed in her notice.The agency's opening salvo was 18% of the first year's salary (with the 3 month 100% rebate). We finally agreed on 7.5% of the first year's salary and the candidate appears to be nigh on perfect
Certainly better than some of the dross that has applied through local advertising before.
I won't work at anything under 20%, i'll usually turn the work away if it's under that. I am a Headhunter though so have to put in a lot more effort that normal agencies.
TBH, they had to put very little work into the deal as they, luckily for both sides, managed to match applicant and vacancy up perfectly quickly. Timing is everything.
They also knew that (Brighton not being a very big place and Vacancies advertised in only one paper) there was a high probability the applicant on their books would see our add and they would end up with nothing. I thought 7.5%, for the amount of work they did, was fair (all IMHO of course).
I was impressed with the professionalism of the agency's manageress. She vetted us as much as she did the applicant. Now you will probably tell me that is par for the course, but I get the impression that inst always the case with some?
They also knew that (Brighton not being a very big place and Vacancies advertised in only one paper) there was a high probability the applicant on their books would see our add and they would end up with nothing. I thought 7.5%, for the amount of work they did, was fair (all IMHO of course).
I was impressed with the professionalism of the agency's manageress. She vetted us as much as she did the applicant. Now you will probably tell me that is par for the course, but I get the impression that inst always the case with some?
Simpo Two said:
beano500 said:
It's odd in this day and age that Recruitment People (who - I should point out before I make any degoratory comment - are generally good guys in the process) still account for so many job placements.
With LinkedIn-type networking and the Interwebnet generally, I wonder how they can manage to survive, since it seems to me a little like an Estate Agent role. You can imagine the world without them and then again, they're a part of life.
Possibly because HR people are generally terrified of making decisions, have no basic people instincts and want somebody to blame if it all goes wrong to save their own skins? Hence they farm it out - problem solved.With LinkedIn-type networking and the Interwebnet generally, I wonder how they can manage to survive, since it seems to me a little like an Estate Agent role. You can imagine the world without them and then again, they're a part of life.
FUBAR said:
TBH, they had to put very little work into the deal as they, luckily for both sides, managed to match applicant and vacancy up perfectly quickly. Timing is everything.
They also knew that (Brighton not being a very big place and Vacancies advertised in only one paper) there was a high probability the applicant on their books would see our add and they would end up with nothing. I thought 7.5%, for the amount of work they did, was fair (all IMHO of course).
I was impressed with the professionalism of the agency's manageress. She vetted us as much as she did the applicant. Now you will probably tell me that is par for the course, but I get the impression that inst always the case with some?
I'd agree, that isn't usually the case, most people will take work on and not really care about who the customer is, it's just work to them. They also knew that (Brighton not being a very big place and Vacancies advertised in only one paper) there was a high probability the applicant on their books would see our add and they would end up with nothing. I thought 7.5%, for the amount of work they did, was fair (all IMHO of course).
I was impressed with the professionalism of the agency's manageress. She vetted us as much as she did the applicant. Now you will probably tell me that is par for the course, but I get the impression that inst always the case with some?
That's the way we work also, we will usually only work with companies we believe in, mainly based on company ethos and who we’re dealing with. It’s a lot easier to sell an opportunity you know is good, as much to keep our credibility with candidates also. As we don't do contractors and we headhunt, we know what we do is worth more than a usual contingency rate (a lot more labour intensive!)
I happen to also be based in Brighton! Lots of recruitment companies there so you did well to find a good one. Is that where you’re based then?
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