This is something I’m extremely curious about. Does anyone know what percent they take?
I’ve worked through recruitment agencies frequently and my paychecks have come from them, not the brand I was reporting to every day. I’ve always wanted to know what the brand is actually will to pay the recruiter for me when I’m only seeing x amount. When I work outside an agency should I be asking for a higher rate?
If you are working through a recruiting agency on a contract as a temporary placement, the agency typically has a bill rate (amount billed to the contract employer) and a pay rate (amount paid to the temporary employee). The average bill rate is usually the total of the pay rate plus an additional 20%. The 20% usually covers the employer’s portion of Social Security taxes, paycheck processing i.e. administrative expenses associated with check processing or direct deposit such as tabulating & recording withholding taxes, the commission fees to the agency, and any other benefit(s) that may be offered through the agency. The bill rate may be negotiated a little lower if the contract employer is a high-volume user (meaning they have a lot of temporary placements) or it may be higher if the placement is for a unique skill set (such as tri-lingual French/Japanese/English administrative assistant). Even at a 20-25% markup, it is often less expensive for an employer to use temporary contract associates than making the commitment to provide standard benefits such as medical insurance and vacation time which can increase the actual cost of a full-time employee 45-65% above the salary paid to the employee. If your paycheck is coming through the agency, you are an employee of the agency who has allocated you to an assignment, not a direct employee of the “brand” that has a contract with the agency. Some companies use “temp to hire” contracts for a tryout before making a long term commitment. There are usually additional commission agreements for a placement that goes from temp to full-time- meaning your paycheck would then be coming directly from the “brand”, not the recruitment agency. Working outside an agency, i.e. independent freelance billed directly by you, you may want to increase your rate enough to include the employer’s portion of Social Security taxes, because you will be held accountable for it come tax time.
Thank you for the detailed explanation!