I heard that it’s better to get a job without Help of recruiting companies because they offer low pay since employer have to pay them a certain percentage. For example if I get a job through a recruiter for $30/hour, how much the company actually pay to recruiters in top of my $30. Want to know for my rate negotiation. if I get hired without a recruiter, I could ask for a better rate. But how much more?
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I worked in creative recruiting for 3 years. If they are paying you $30 an hour then they are charging the company at least $50 an hour. If it is a full time position then they are charging 20% of your annual salary.
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I’m happy someone started this topic as most truly don’t know the numbers behind recruiters pay and the break down between salaries and hourly. I’ve also been told they also receive money for each year you stay in the position.
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Your reply is very helpful! Thank you! Do you know for how many years agencies get paid for a full time position hire? Is there a time limit?
If you are freelancing then they take a cut of your pay for a year. After a year if the company hires you full time they do not owe the agency a fee. If it is an upfront full time hire it’s 20% of your annual salary and is a one time fee. They aren’t entitled to a fee for multiple years.
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Additionally many companies prefer you to be paid through the temp agency even at the hire rate rather than bringing you on their payroll. This is because temp employees often have a separate budget line vs permanent employees. So when there is a hiring freeze or no budget to bring on permanent staff there often is still money in the temp budget. So in some cases the only way to get hired is through the agency.
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when i was going through agencies like 24seven or JBC or fourthfloor, if i was getting 35/hour then i figure the agency was taking in 60. if this is for placement of a FT job, it’s usually a percentage of the annual salary for the position. i actually like going through the agency because if the position ends, then it still counts as “employment” towards taxes because you’re employed through the agency. plus if you are with the agency for long enough, you qualify for benefits.
In NY you can also get paid for sick days now when working through a W2.
I second Bellevue’s figure above. I was making $40/hr at a recent agency placement and came across an invoice proving they made $20/hr off me. To put that into perspective, my typical hourly rate as an independent contractor is $60/hr. Recruiters usually float meager hourly rates for these kinds of jobs and then claim that the client’s budget is too tight to negotiate. Going through a firm has its benefits, but finding work directly with a company is always better.
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