Rob, Your post is a good summary of why many people consider the recruitment model you describe as being 'broken'.
The on-costs you point out can be avoided in many cases... lots of small businesses are exempt from payroll tax (Current threshold in NSW is $689,000) And many industry segments for larger corporates (media for one) often does not require PI and PL for Developers. Recruitment agencies tend to charge the insurance anyway as they have a discounted policy for n Developers and it becomes another place to hide the cream (and seems like a value add with a bit of sales talk). Your argument about low paying jobs is a bit ironic... if the offered rate was ~30% higher due to the absence of a recruitment agent... the job might be worth taking. Regards, Andrew Stone. On 30 July 2012 16:11, Rob <[email protected]> wrote: > Hi all, > > I am a recruiter, and have had success with this board in placing > candidates in the market. I totally agree with what Ashley is saying in > relation to fee structures etc. I would like to elaborate upon the concept > of Margin, which may equate to a higher than 20% markup. I have no doubt > that everyone understands this, but just to be sure, as an example...margin > is the percentage of the charge rate, and markup is the percentage on the > cost...two totally different things....especially when oncosts are involved. > > For instance, if I was to charge a 15% margin on a candidate, who was > earning $100 per hour, I would have to charge the client $129...this > ensures that I am earning 15% margin. > > To the candidate, I am effectively putting on a 29% markup...BUT only > earning 15% margin (of the charge rate) > > This is where the confusion lies the difference between MARGIN and MARKUP > > > ie. for $129 charge, 15% margin ($19), 10% oncost (workers comp, PI/PL, > Payroll Tax), and $100 for the candidate > > $100 + $10 + $19 = $129...the recruiter is earning 15% margin of the > charge rate. > > If we reverse it from a charge of $100 at a margin of 15%....I would earn > $15, oncost $7, candidate rate $77....this is a margin of 15% of the charge > rate....but if you compare the $77 to the $100 charge, it is roughly a > 29-30% markup again. > > > So, if people are seeing 30% markups on their rates, please don't assume > that the recruiter is earning all of that....they aren't. On top of the > services of payrolling, recruiters take the risk of clients folding or not > paying, when we always pay our recruiters upon signed timesheets, > regardless if the client has paid or not....this of course saves the > candidate from having to chase payment (one more worry they don't have to > deal with). AND YES, sometimes clients do fold or don't pay.....which means > as a recruiter, you are out of pocket for the total candidate rate + > oncosts and of course with the margin that you have lost as well. Once had > a client not pay for a candidate for two months, they folded, ...so lost > whole lot of money. Some candidates may laugh and say, well them's the > breaks....and well, I would have to agree....but we do charge a fee for a > service and the risk associated where there is essentially no risk to the > candidate in terms of non-payment (with me anyway) > > Also, 15% or there abouts, in the scheme of things, with the amount of > payroll at risk, is not overly expensive (we currently have a yearly > payroll of about $1.5million per year give or take - money we pay out and > hope to get back - this is small for the market).....I have recruited for > some of the big4 and some of their charge-outs for their permanent > employees are amazing...we are talking 100-200% sometimes. > > So, if you are on a contract through a recruiter, and you are getting paid > on time for the work you are doing and the pay is correct (no hassles or > problems each week)...then this is a good thing and is part of the service > for that 15% margin that they earn. > > I firmly agree with Ashley that rule of thumb contract is roughly 20-30% > increase on a permanent salary...so if you are on $100 per hour, divide > that by 1.25 and you will get your equivalent permanent comparative rate > which can easily translate into a permanent salary package...roughly $115k > > EVERYONE, regardless of industry or skill needs to separate job worth from > personal worth. ie, if a CEO hit rock bottom and could only get a job as a > cleaner, he would only be paid a cleaners salary, even though he is worth a > CEO salary. > > So, if you are getting hit up for low paying roles, that is what the job > is worth to the employer, if you feel that it is too low, then don't go for > it (sometimes employers try their luck)....as recruiters we need to keep in > constant contact with candidates as their situations change and sometimes I > have had candidates go for lower rate jobs (rare, but it does happen). If > you are the best Ruby developer in the world, and you are worth $1000 per > hour but only $50 per hour roles are available, then you have to make a > judgement call based upon job worth to personal worth....ie you can say "Im > worth $1000 per hour and not doing that" and don't work and get zero > income, or you could have income by working at $50 per hour....extreme > example I know, but hopefully highlights the point I am trying to make. > > Yes, there are cowboys in the industry, as with any industry, but like > Ashley said, there are some good recruiters out there that know their > markets well, and network hard to find out who, what, when, where, why and > how........, without finding that information out, they can't provide > candidates jobs nor can they provide clients candidates....hence the need > to call people...many many many many people :) > > > On Friday, July 13, 2012 4:02:19 PM UTC+10, Ashley P wrote: >> >> Chances are they might be :) >> >> But we aren't all bad! >> >> If you are a Ruby developer chances are you've probably seen my name >> before either on Seek, at Ruby meet-ups or on one of those pesky >> Linked-in invites I send around. I really like the Ruby community and have >> a passion for working with developers to find them cool jobs. >> >> That being said recruitment gets a bad name especially amongst the Ruby >> community. I'm here to defend our reputation but also to acknowledge our >> flaws. >> >> Many recruiters do have no idea when it comes to development roles. They >> throw out buzz words like 'Apache' or 'Object Oriented' to make it look >> like they know what they are talking about. >> >> That being said a recruiter can often be of use. They can present >> opportunities that you wouldn't have heard about, discuss potential career >> movements or even help with your resume and skills training programs. >> >> Sure as a quality developer you could probably find a good job yourself. >> But are you sure it's the best job!!? Use your own networks in addition to >> a recruiter to expand the pool of jobs and find yourself in the best job >> you can! >> * >> * >> *Tips on dealing with recruiters:* >> >> - 1. Don't only use a recruiter. *Use your own networks as well.*Come up >> with an many opportunities as you can yourself and then use a >> recruiter or 2 to expand your opportunities >> - 2. *Don't be pushed around on Salary/Rate*. Know what you're worth. >> Be open with your salary with a friend or former colleague to know what >> your worth and stick to it. (A common tactic is to ask people what they >> were on previously and hold them to a salary near this. You shouldn't fall >> for it. Be honest about what you were previously on but let the recruiter >> / >> hiring manager know that due to your research you believe the market rate >> to be X and that you are hoping for a figure around that mark.) >> - 3. *Ask who the client is*. Often a recruiter will want to chat to >> you a bit first however, it is totally within your right to ask who the >> recruiters client is after an initial chat to determine your suitability >> - 4. Remember *your in control of the process. *If you don't like a >> specific recruiter don't use him/her. In fact it's your right to call up >> and say I don't want you representing me to X. >> >> *Can a recruiter really help me?* >> >> - Yes and no. It really depends on the relationships the recruiter >> has built. >> - If the recruiter is blindly sending CV's around town without having >> met the hiring manager they really won't be of any use to you. >> - That being said if they have built a strong relationship with the >> hiring manager their word often will decide whether or not you get an >> interview :). They can also act as a beneficial middle ground to assist in >> negotiations and getting things moving! >> >> >> *Recruitment Rates* >> >> - Are recruitment rates too high? Well honestly yes they are fairly >> high but we are running a business and as you can all understand we need >> to >> make a profit! >> - Also people don't realise the amount of effort we actually go to in >> providing a short-list. Many developers think I just simply called them, >> sent their resume to the company and got a massive cheque. What they don't >> realise is that to get that one person a job I had to look at over 400 >> resumes, speak to over 80 people and all for a 1/3 shot in actually >> filling >> a position. I work 8-6 and I'm a fairly quick worker! >> - That being said yes some recruitment rates are too high and >> companies need to be smart on who they use. >> >> Anyway if your looking for a recruiter who loves the Ruby community and >> who actually cares about your career please give me a call. I won't screw >> you over and I'm available after-hours with bookings and all conversations >> are 100% confidential. >> >> [email protected]. 0404-590-975. >> > -- > You received this message because you are subscribed to the Google Groups > "Ruby or Rails Oceania" group. > To view this discussion on the web visit > https://groups.google.com/d/msg/rails-oceania/-/0Q_9sWmaCaQJ. > > To post to this group, send email to [email protected]. > To unsubscribe from this group, send email to > [email protected]. > For more options, visit this group at > http://groups.google.com/group/rails-oceania?hl=en. > -- You received this message because you are subscribed to the Google Groups "Ruby or Rails Oceania" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/rails-oceania?hl=en.
