If you are a client of a staffing agency, you may question how staffing agencies determine the fees charged for providing contract workers. Staffing agencies provide services for which they are entitled to charge the customer, and these services may be priced in a number of ways. Most clients prefer to have agencies quote a pay rate (the promised wage to the contract worker) and a mark-up expressed as a percentage of the pay rate. It pays to understand and evaluate the genuine cost components that constitute the mark-ups, particularly if you are transacting with more than one supplier. Do read on to learn more about cost components. , Then ask your suppliers to provide complete transparency into their quoted prices.
By focusing all attention on the final cost to the company, without evaluating the built-in components, you may fall into the trap of choosing the supplier with the lower mark-ups. You may find that the supplier intends to pay lower rates, putting you at a disadvantage in terms of attracting the best talent. Or, the supplier may be attempting to “buy your business” through low margins. Unfortunately, this often results in recruiters who are not motivated to fill your open positions. Being well informed is the secret to accessing the best talent at the best rates. Decide whether you need to delve deeper or not!
Let us look at what a staffing agency charges a client over and above the hourly rate payable to the employee.
Along with paying for the suppliers’ efforts and time as a hiring and on-going manager, the ultimate cost a client pays depends on the type of worker being hired, the scarcity of those resources, and the level of screening that you require. The different cost categories under which the mark-up is charged are detailed below:
Why do mark-up rates vary so much? Principal reasons include:
Staffing agency have a good selection procedure to ensure that the candidate has an in-depth knowledge about the particular field of job and checks if he/she has the skill and expertise to run the organisation and its people.
Agencies provide services for which they are entitled to charge the customer, and these services may be priced in a number of ways.
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