Taking on staff from an employment agency

[Hayles]

Hi

We need a new member of staff but want to try a few out (!) Our plan is to use a temp recruitment agency for a few functions and then if anyone stands out, offer them a permanent job.

What sort of payment to the recruitment agency are we looking at for taking a temp member of staff on permanently?

It costs a fortune to advertise in the jobs section of our local paper anyway but this way we can see how the person works (without telling them there's permanent position available).

Many thanks
Hayles

 

[Antonia @limeone.com]

the final fee for using a temp to perm agency in this way. The best way forward is to discuss this at the beginning and then get the agreement into their terms and conditions.

Most agencies will want around 10-15% of first years salary on the conversion from temp to permanent. This is a large sum and one which most of our clients are concerned about paying.

When clients of ours want to ensure staff fit the bill we suggest the following:

1. Prepare job and person specification for the role advertised.

2. Use a free on line board such as www.reed.co.uk and place your own advert on their free recruitment board. Sift the CVs first against the job and person specification and then interview twice those short listed. Their board provides a great on line CV system for handling the applications and this is very useful for lots of small businesses.

3. Arrange a contract which takes into account either an initial short term contract then a permanent one or the terms of the offer show a clear trial/probation period and how the employee will be measured during this time.

A lot of our clients come to us when staff do not work out and we know that there is widescale dissatisfaction regarding the services of many employment agencies.

Job centres tend to be very generic in sending all comers to a business so you need to discuss with the local job centre manager the profiles of people you are prepared to see. Arrange a proper system for them to use so you are not swamped with CVs from people who are not eligible for your job and will waste time for you.

 

[Astaroth]

Certainly 10-20% of their fully loaded salary (ie incl benefits in kind etc) seems to be the norm for giving a temp a perm contract within 12 months of their "ending" the temp arrangement.

Very few of the companies I have worked for have used this arrangement unless they have renegotiated the fee due to anticipated volume. An initial short term contract with a view to making it perm after 3-6 months seems to be a more common approach at the moment with direct hiring - you really do want to get people that have the potential of perm contracts from the outset though as the cost of hiring, training, the person getting up to speed and the team/ department then having to cope without someone if they arent appropriate are much higher than most people anticipate. Our Group Director of HR did a research piece on this previously in connection with a concern with the high turn over of staff within 12 months of starting with the company and whilst I dont believe the figure was 100% accurate it was a massive amount of money.

 

[clairemackaness]

Hi Hayles,

My background is recruitment and firstly I would suggest using small, local, independant agencies.

The average temp will cost you between £7 - £9 per hour and I would suggest informing the agency that it will be a temp to perm contract before you hire. Most local agencies in our area will come down to 8% or 10% if you are looking to hire volume of say 5 or more staff. Negotiate well as Essex based agencies are suffering at the moment and will come down to as low as 5% for the right deal.

These rates are Essex rates, and although the advice you have received above is correct, bear in mind that rates alter dramatically across the regions/counties. As an example my old branch in romford would have charged you 15% but our basildon branch would have charged you 10%!

Any advice you need, just drop me a line.

Claire

 

[Hayles]

Many thanks for this info.

Looks like we'll have to think again - we were expecting a one off fee of £400-£500.

It's just so difficult to know if someone will work out until we've seen them work for a few weeks with all the different venues and occasions.

What are the benefits of just using agency staff? I was told we could request the same person/s (but it's not guaranteed though). Are we liable for all the employment regulations or will the agency take care of them?

It looks as though we'll need a few staff on a semi-regular basis and need to cover the legalities which haven't applied before.

Hayles

 

[Antonia @limeone.com]

I note that Claire posts temping rates above and imagine this is for admin type duties. In Manchester a temp solicitor will cost us around £55 to £70 per hour plus VAT and for a good temp legal secretary around £15-£18 per hour.

If you are going to need people, train them to your ways and want to use them over a period of a few months why not try subcontracting the work to a Virtual assistant or someone on a retainer basis?

We use an excellent retired solicitor for some of our will writing service, we employ him, use his time in blocks of 25 to 35 hours per month dependant on need and he works on this flexible sort of contract. I kow others who work in admin, finance and data input who like the variety that a portfolio of clients bring. They operate as limited companies and work on serial contracts with clients.

If you let me know the geographical area and the sorts of work you have I will send you some details.

 

[Hayles]

I note that Claire posts temping rates above and imagine this is for admin type duties. In Manchester a temp solicitor will cost us around £55 to £70 per hour plus VAT and for a good temp legal secretary around £15-£18 per hour.

If you are going to need people, train them to your ways and want to use them over a period of a few months why not try subcontracting the work to a Virtual assistant or someone on a retainer basis?

We use an excellent retired solicitor for some of our will writing service, we employ him, use his time in blocks of 25 to 35 hours per month dependant on need and he works on this flexible sort of contract. I kow others who work in admin, finance and data input who like the variety that a portfolio of clients bring. They operate as limited companies and work on serial contracts with clients.

If you let me know the geographical area and the sorts of work you have I will send you some details.

Ahh... but can your solicitors pull a decent pint?!

We're in catering so looking for waitressing, cooks and bar staff, etc.

Thank you anyway

Hayles

 

[Antonia @limeone.com]

AND I know how to pull a good pint of Guiness or Beamish too! I loved working and drinking in bars throughout my student days and did weekends at a local until the end of my articles in 1989.

 

[bwglaw]

I would have thought there was a high supply of hospitality staff as you mention. It might be cost-effective to take someone on and train them up. They can be on a training wage progressing to a full wage upon satisfactory probation/training.

By involving an Agency can create some implications as to whether the employee is employed by you or the Agency - this has to be made clear in the contract but caselaw is undecided on this point and it is determined on an individual basis. I am sure the hospitality industry has a high staff turnover and therefore any complications with the Agency may well absorb your time in running the business.

As an employer I would rather spend time looking for the right person and training them up rather than training someone and the Agency changes the person or that person has left the Agency's employment.

Jonathan

 

[Hayles]

I would have thought there was a high supply of hospitality staff as you mention. It might be cost-effective to take someone on and train them up. They can be on a training wage progressing to a full wage upon satisfactory probation/training.

By involving an Agency can create some implications as to whether the employee is employed by you or the Agency - this has to be made clear in the contract but caselaw is undecided on this point and it is determined on an individual basis. I am sure the hospitality industry has a high staff turnover and therefore any complications with the Agency may well absorb your time in running the business.

As an employer I would rather spend time looking for the right person and training them up rather than training someone and the Agency changes the person or that person has left the Agency's employment.

Jonathan

Good point Jonathon.

Really not sure what to do. Will have to think it through again.

Thanks for all your advice,
Hayles

 

[Mwebb]

Hayles,
Not a recruitment expert, or a legal specialist, but i agree with johnathan. Recruit them yourself.

Tell them it is a temporary 3 month contract, that will be reviewed, and possibly renewed at the end of 3 months. That way you can get the person you want, doing the things you want, without the extra agency costs.

Michael

ps not even sure if this is legal, but it sounds like a plan!

 

[bwglaw]

Its perfectly legal Michael to offer a fixed-term contract, or even permanent employment subject to 6-month probation and performance review.

Whichever route you decide to take Hayley is to ensure that any terms and conditions of employment or contract of employment is clear on what terms are agreed i.e. 3-month fixed term contract commencing on [date] and terminating on [date] along with any other terms.

If you employ other staff too you will need to ensure that they are all treated equally to avoid a claim for less favourable treatment because the employee is a fixed-term worker etc

You will need to include how performance will be reviewed and when and the consequences/rights of any unsatisfactory performance etc

In addition to the above it may be worth enquiring with your local Jobcentre about taking someone on who is on the New Deal or some other scheme that attracts a monthly grant payment for the employer. Last time I enquired they paid £150 for a part-time employee plus a fixed amount towards training.

You could also contact your local Adult College to see if they have anyone who is studying a course related to the job you are offering.

I am happy to provide ad-hoc support by email especially if this is your first employee.

Jonathan

 

[Hayles]

Whichever route you decide to take Hayley is to ensure that any terms and conditions of employment or contract of employment is clear on what terms are agreed i.e. 3-month fixed term contract commencing on [date] and terminating on [date] along with any other terms.

If you employ other staff too you will need to ensure that they are all treated equally to avoid a claim for less favourable treatment because the employee is a fixed-term worker etc

You will need to include how performance will be reviewed and when and the consequences/rights of any unsatisfactory performance etc

In addition to the above it may be worth enquiring with your local Jobcentre about taking someone on who is on the New Deal or some other scheme that attracts a monthly grant payment for the employer. Last time I enquired they paid £150 for a part-time employee plus a fixed amount towards training.

You could also contact your local Adult College to see if they have anyone who is studying a course related to the job you are offering.

I am happy to provide ad-hoc support by email especially if this is your first employee.

Jonathan

Many thanks Jonathan, we may need to take you up on this. We've only ever employed part-time staff (mainly friends and family). Now we need to expand it's seems like a minefield with regards to employment rights and laws.... :-(

The New Deal sounds good - our main requirement is friendliness and common sense. We don't need someone with lots of qualifications in computers or accounts, etc. I'll give the Job Centre a ring to find out more.

Hayles

 

[clairemackaness]

Why not take on an apprentice who can hot desk around the business. That way if you need some admin work doing they can do that or if you want them to do kitchen stuff they can do that etc etc etc. www.apprenticeships.org

 

[niceandspicyrecruitment]

Now this is a topic I can help out on, I have spent many years in recruitment woo who something i know about,

Temping someone through an agency can seem expensive however if agencies actually took the time to explain what makes up their fees then I am sure more people would appreciate the value behind them.

A temporary worker is paid in accordance to the salary you dictate, so for instance if you employ someone on £18,000 and your weekly hours are 35 then you hourly rate you pay them is £18000 / 52 weeks / 35 hours = £9.89, an agency will then add 12.8% Holiday Pay and 8.3% Employee NI, I believe these fiqures are set in stone, the real area you want to concentrate on are the agencies margins (what they make) my current agnecy charges a £2.70 margin so in total for a £18,000 person from an agency it will cost you in the region of £15.71 per hour, I am rusty on the temporary side so this is a guide for you, now the benefit to you is save on payrolling expenses, headcounts etc etc etc

If you decide to offer a candidate who has been temping through the agency a job with your company then the costs can be anything from free to 20% of salary plus, if you want my advice I would advise you if you use an agency to lay it on thick at the start and say to them "yes" we will use you for a temp however if the person goes permanent after say 12 weeks and we offer them a permanent contract we want a reduced or free of charge policy, if you are difficult with them at the start consultants nowadays will give in to that, especially when they have targets to hit!

However I would like to just say that the good and these also generally seem to be the independant agencies actually can do a really good job, I have several massive companies who will only use me for their respective recruitment hence the fact why I am setting up on my own away from my company because its about dealing with me rather than my company.

When you think about the costs involved with activity accounting rather than just the charge for posting an advertisement it can work out a lot more, also if you put two repeat ads in the paper and get nothing you could spend a fortune, with an agency you pay nothing until you find the right person and then after that most agencies have a 12 week rebate policy, imagine a director on £50000 wasting his/her time pre-selecting 30 cvs for one job, how expensive would that be?

My advice to anyone is, firstly look and see if you can internally promote and then recruit for a lower level of staff, find a consultant who listens and understands and who is willing to visit you, and set in stone a mutually beneficial but realistic fee structure with them and in general you cannot fail, if personnel are the building blocks of the business how can you afford to look for a cheap, cut the corners solution?

If you need any advice let me know, its just a matter of getting the best deal to suit you, I am not in catering recruitment so i will not be touting for business, just some freebie advice