Job Recruitment Agency Fees

Joe-C_4

I have a job through a job agency.. a temporary position..

I get paid £5.00 an hour which is terrible I know..

I just found out the agency gets £7.75!!!



Any opinions on this?

Fran

Yes - disgusting isn't it? Quite often you can't get these jobs through the company itself, unfair as you could get more per hour if you could and cost them less. I suppose they think it's worth paying the agencies so they don't have to bother with that side of things.

Spendless

Joe-C - how about at the end of your contract if you've liked the job telling them if they need staff in future to give you a call at say £6 an hour - more money for you but costing the company less

Joe-C_4

I know mate.

Thats what I will do.

I'm hoping they will want me to stay on and give me a proper contract through the company not the agency.

Ebany

Assuming you are being employed properly by the agency (ie not forced into a self employed setup) you will be costing the agency approx £6.25 per hour (thats to take into account holiday pay and employers NI), so thay have about a £1.50 per hour margin for you.

From that, they have to cover all the costs of the business - paying for the office, the staff and all similar expenses. Then there is that slight point that most companies tend to like to make a profit. People higher up get cross at offices that cost the company money rather than make it, and decide to close them if things don't change (or, in a smaller company, it just goes bust).

You have probably signed a contract stating you cannot work directly for companies they have introduced you to for a set time, and the client is bound to have done as well (or have been sent the terms, and by taking staff they have agreed to them). Companies evidently like the service provided by agencies as otherwise they would recruit themselves.

I know it can be quite galling if you see how much an agency charges for your services, and realising that you don't see much of it, but you have to remember that your pay is not the only direct cost, and then they are a company that has to survive. I've been on both sides in the past and I've come to see it as reasonable (certainly the kind of margin they have for you).

Of course, if they are not having those extra costs and they are still only paying you £5 per hour that is a bit pants.

jobbingmusician

Two comments, briefly

1. Isn't £5 an hour below the minimum legal wage?

2. Although the agency should obviously be paying at least the min wage, £2.75 an hour doesn't actually sound like too much of a rake off from the agency, to me. I agree with Ebany's comments, and have dealt with agencies who charge almost double what their employees are paid! (sorry for the bad news )

Conor_3

Joe-C wrote: »

I have a job through a job agency.. a temporary position..

I get paid £5.00 an hour which is terrible I know..

I just found out the agency gets £7.75!!!



Any opinions on this?

Yeah...they're not charging enough to the client.

You actually work for the agency at one of their clients. You don't actually work for the client. The agency pay you. What they charge the client is non of your business.

It breaks down like this...

You get £5/hr
Holiday pay on top of that is approx 50p/hr
Employers NI is 55p.

So it actually costs the agency £6.05/hr to employ you. That leaves £1.70 an hour to pay for all the running costs of the agency. To give you an example of the cost, one of the agencies I work for costs £183,000 a year to run one office in one town. Takes a whole load of £1.70's to pay for that.

Conor_3

jobbingmusician wrote: »

2. Although the agency should obviously be paying at least the min wage, £2.75 an hour doesn't actually sound like too much of a rake off from the agency, to me. I agree with Ebany's comments, and have dealt with agencies who charge almost double what their employees are paid! (sorry for the bad news )

The agency aren't making £2.75/hr. They're making £1.70 at best.

jumpinjack_3

Conor wrote: »

Yeah...they're not charging enough to the client.

You actually work for the agency at one of their clients. You don't actually work for the client. The agency pay you. What they charge the client is non of your business.

It breaks down like this...

You get £5/hr
Holiday pay on top of that is approx 50p/hr
Employers NI is 55p.

So it actually costs the agency £6.05/hr to employ you. That leaves £1.70 an hour to pay for all the running costs of the agency. To give you an example of the cost, one of the agencies I work for costs £183,000 a year to run one office in one town. Takes a whole load of £1.70's to pay for that.

:A I worked for a Domicillary agency and its hard work I looked after a terminally ill service user the agency charged £16 an hour (brilliant ya) wrong!! they gave me £4.22 an hour Humm a whole lot of £1.70's from my pay and I would be looking after the person twice a day an hour each time you can get good agencys and bad, now im told the agency has dropped the 35+ carers wages and have not told them until they got their wages and phoned up and said they think they have made a mistake. NICE PEOPLE YA

Total_Chunk

Joe-C wrote: »

I have a job through a job agency.. a temporary position..

I get paid £5.00 an hour which is terrible I know..

I just found out the agency gets £7.75!!!



Any opinions on this?

I'm a bit confused as to why you are shocked by this. How do you think the agency makes money? Employment agencies are businesses in themselves and they make money by charging clients fees for the workers placed. They don't do it out the goodness of their hearts and they're not funded by the job centre or anything.

If you're over 22, it is illegal to pay you that amount, I believe the minimum wage is £5.75 for people over 22. Not sure why they think over 22's need more money to live than under 22's but hey!

liney

The NMW is now £4.83ph for persons 18 to 21 years and £5.80ph for 22 years plus, so whether it is under the NMW will depend on how old the OP is.

Of course they are charging more then they are paying you. If you offered to work directly for them at £6.00ph (and the company got away with breaking their contract) you would be costing them about £7.50ph including your NI and holiday pay anyway.

They would also have to run the payroll for your, be responsible for your HR issues etc etc.

My opinion is: It's a service which the employer chooses to use, and once you accept the post at £5.00ph, your interest in payment stops.