Average Employment Agency Charge??

[Merchant UK]

Just toying with the idea at the moment of setting up an employment agency and just wanted to know from those of you that have had experiance using agencies about the charges and difference between the price the Employee gets and what is charged to the client.

People are saying to me charge 50% more, on what we pay the employee per hour? is this a good guideline?? if we pay the employee £10 an hour would the business be happy paying £15 an hour??

The type of agency in question would i expect be different than others which supply unskilled staff, but this niche area is Engineering and pretty skilled if anything.

I've found out that with engineering companies they need short term supply staff when they have a large contract but, tend to slim down at the end of the contract, thus providing temporary staff is a more likely option as opposed to staking people on and then laying them off.

Another question if companies want to take on the temp employee, they will need to pay us a fee or charge and from what i hear, its a percentage of the employees actual annual wage with the company. Without appearing too gready, what would be a decent percentage to us to give up this employee, 10% ?? or more.

Thanks again in advance

 

[NextPoint]

I guess it depends on what industry you are in - certainly if you are paying people close to minimum wage, then you are not in as much of a lucrative business and you still have the same amount of admin to deal with. For IT recruitment, it seems to be about 1/3 extra to what the contractor is being paid - but then again, IT contractors get paid a lot more than someone on minimum wage. So, it depends on what industries you operate in and what your admin costs are.

 

[Merchant UK]

I guess it depends on what industry you are in - certainly if you are paying people close to minimum wage, then you are not in as much of a lucrative business and you still have the same amount of admin to deal with. For IT recruitment, it seems to be about 1/3 extra to what the contractor is being paid - but then again, IT contractors get paid a lot more than someone on minimum wage. So, it depends on what industries you operate in and what your admin costs are.

I already said i'm in engineering and was happy paying a min £10 an hour, I don't think anyone would be in engineering for just the miniumum wage, as these kind of employees are pretty skilled at what they do.

 

[Richie N]

When you say engineering, is it a more skilled job or generalist? Are the candidates easy to recruit for?
Don't charge 50% margin, even if you try to I doubt you will get the business or indeed keep it.
Average margin rates are usually around 20-30% depending on the position, sector/industry etc. If its a high volume client, expect to go in at less than 20%.
You need to calculate your charge rate by £10.00 + Holiday pay calculation + National Insurance + Margin = charge rate.

 

[NextPoint]

I already said i'm in engineering and was happy paying a min £10 an hour, I don't think anyone would be in engineering for just the miniumum wage, as these kind of employees are pretty skilled at what they do.

You'd be surprised at what some people expect - I had someone come to see me a few weeks ago about writing a software system for them. It turned out that he wanted to pay me around £6 per hour - you can guess where I told him to go ;-).

 

[Richie N]

About 8 Years ago I used to work as a chainman for an engineer and I was on £8 per hour and I know for a fact that Hays montrose(whom I worked through) used to pay one engineer £15 an hour and another I worked with £17 an hour.
I know times are tough but to be honest I do not think you have a hope in hells chance of getting a qualified engineer for ten pounds an hour.
I could be wrong though as it was quite a while ago now.

I must admit I don't know the engineering sector but I suspect that you may struggle at this pay rate as well.
I would look on Totaljobs, Reed etc to see what the average pay rate is.

Alternatively you need to do a bit of market research, call 3 agencies in this sector, get its pay rates and charge rates for the position you want to do.
Imo you are better off doing this, as you would want to be competitive with your rates and also attract the quality candidates.

 

[Merchant UK]

About 8 Years ago I used to work as a chainman for an engineer and I was on £8 per hour and I know for a fact that Hays montrose(whom I worked through) used to pay one engineer £15 an hour and another I worked with £17 an hour.
I know times are tough but to be honest I do not think you have a hope in hells chance of getting a qualified engineer for ten pounds an hour.
I could be wrong though as it was quite a while ago now.

The £10 an hour would be for a Welder an CNC Programmer would be £15 etc..... I was just using the £10 as an example for comparision

 

[Merchant UK]

I must admit I don't know the engineering sector but I suspect that you may struggle at this pay rate as well.
I would look on Totaljobs, Reed etc to see what the average pay rate is.

Alternatively you need to do a bit of market research, call 3 agencies in this sector, get its pay rates and charge rates for the position you want to do.
Imo you are better off doing this, as you would want to be competitive with your rates and also attract the quality candidates.

That looks like the best option so far

 

[Rasta Pickles]

The £10 an hour would be for a Welder an CNC Programmer would be £15 etc..... I was just using the £10 as an example for comparision

When I was looking for work, one of the job-boards I visited frequently advertised nurses jobs for £290 per night shift.

 

[Merchant UK]

Without wanting to sound harsh or like a shite basically--but you really should know all of this yourself if you have done your research properly. It sounds like your going into it a bit blind to be honest

I know quite a bit but i was looking at different charges thoughout the UK. A welder or CNC operator would earn around £15-£20 in say London but in manchester it could be £5 an hour less, what i wanted to know averagely was the amount extra an agency adds to the employees wage, which they charge the company.

I was told its about 50% extra on average, so for example a guy earning £10 an hour, the business would be charged £15?? Does that sound right??

 

[Richie N]

I know quite a bit but i was looking at different charges thoughout the UK. A welder or CNC operator would earn around £15-£20 in say London but in manchester it could be £5 an hour less, what i wanted to know averagely was the amount extra an agency adds to the employees wage, which they charge the company.

I was told its about 50% extra on average, so for example a guy earning £10 an hour, the business would be charged £15?? Does that sound right??

That is not 50% extra in reality.
You need to take holiday pay and national insurance contributions into consideration.
I explained earlier how to do this

I would recommend recruiting a recruitment consultant, let them do this for you, going into it blind can actually bite you on the a**e later on.

 

[Mr D]

This post is a little old now, but I think if anything, interest in the employment market has grown! Does anyone have experience of temp agencies in London?

A few specialist ones.
Though not for work in London.