Hi Stonie, Unfortunately, for recruitment companies, we are not exempt from payroll tax. I would like to be, especially with company contractors. I feel, that if I am paying a company, as opposed to a contractor, then the company (that that person works through) is liable for the payroll tax....logically it should be this way, but unfortunately it is not....our CPA accountant went to the ATO to check this when we told him and even he was amazed that we are liable....doesn't make sense, but its the case
For the oncost....we just need to charge it to be covered...we do need PI/PL as a business for any contractor that goes through the business...do we absolutely need it (legally)...I suppose not....but it similar to comprehensive insurance on a car....you don't NEED it, but it is advisable to get it....even if your customer doesn't need you to have it. Any company providing a service to another company basically has to have it. PI is for the contractor pressing the wrong button and bringing a system down (unlikely I know, but have to have it to be safe - blue chip custmers demand it) and PL is for a contractor that leaves a waste paper basket in a walkway and another contractor or permanent employee of the company trips and hits their head. Just insurances that we on charge to the client....this is not some new business model that I or other recruiters have created out of thin air, most costs are calculated in the charge rate for any product/service. It costs us roughly 4% for this inclusive of factoring. I can absolutely assure you that this is not cream, as we pay it out to our insurance broker. Even if a company could get a contractor directly, there are still oncosts associated with paying someone $100 per hour. Not direct as such, but there are oncosts associated with mangement of the contractor, payrolling, OH&S, payroll tax etc......might not be 30% markup, but would be at least 10-15%. Of course, candidates can contact companies directly and get those direct contracts - absolutely, but I don't think that they have the time to make the amount of calls we do as recruiters to get the amount of business ops we do, as they are focused on their current contract and performing their duties....if there are professionals who only need to make one call to get that next engagement, then I would like to learn from them. In relation to the low paying jobs....my only suggestion is to go for what you want (what you are happy with) knowing that there are oncosts and margins on top for the client, if you are to go through a recruiter for reasons stated. Not asking anyone to undersell themselves, but market changes can affect what people are looking to pay which therefore affects what people can earn. Therefore roughly at 15% margin, and you are earning $100...know that the client is being charged roughly $130....but the recruiter worked to get that opportunity first of all, and he/she worked to get into contact with the right candidate to put forward (all this unpaid)...if you went to the recruiter and said, I just want the $130 charge rate, of course it wouldn't work...as there is zero margin and the recruiter would have to pay oncosts to pay you that $130, essentially losing money (paying $13 an hour out for someone to earn $130) ....now, no business I know of values that model As recruiters, we get paid only success....contractors get paid on work done. If we don't succeed (regardless of the amount of work put in) we don't get paid. We are not like lawyers or accountants who charge by the hour (would love to do that though :) ) ...but of course, if that was the case, we can't charge candidates (that is illegal) which leaves only the clients, and as a client, I am sure that I would only like to pay on success rather than pay a recruiter by the hour. All in all, if you can go direct and get that extra 30%...know that it still costs the direct company extra % on top of this...therefore paying a recruiter the x+30% to have everything covered is a cheaper option than taking a contractor directly at the same rate. Of course the extra % on top for the employer is of no real worry to the candidate getting x+30%...so all I can say is go for it...if those x+30% roles are easy to find and get, then absolutely - go for it. As a recruiter, we use recruitment companies to find us employees for our company. Reason? Well, I speak with IT people all day and know that market, but I don't speak with recruiters all day, hence outsourcing the service to a company completely focused on who is who in the recruitment world. It makes sense, as the opportunity cost of working that market is higher than what the Rec2Rec company would charge me. Even recruitment companies are customers of recruitment companies :) and those recruiters have to deal with recruitment companies to get roles in other recruitment companies...and Rec2Rec is quite a large market. Stonie, if you really want a warts and all understanding of recruitment, feel free to give me a call on 0409 226 539 I would even be happy for you to sit with me for a few hours to see exactly what I do. I have done it with some contractors of mine (ie work with them) but I am not a trained developer, so most of it went over my head, but got a feeling of what their pressures are etc. How many recruiters have offered you this? let me know Cheers Rob On Tuesday, July 31, 2012 9:51:31 AM UTC+10, Shamael wrote: > > mind my spelling, written in a rush and in the middle of breakfast. > > On Tue, Jul 31, 2012 at 9:49 AM, Shamael Keng <[email protected]> wrote: > > Hey guys. > > > > This argument/discussion is as old as zues's beard. > > > > Frankly if you don't want to use a recuruiter dont. > > > > If you do want to use a recruiter, negotiate your terms to suit both > > parties. simple. Its a service, you engage them when you need them and > > for a reason. > > > > I you want to bash on an industry just becuase you pay invoices which > > "seem" too much. refer to above point. > > > > In an industry which employs a lot of "questionable" types, if you > > have a bad experiance, name and shame. I can't say I have been > > exemplery, but all I can say is ive been trasnperant throughout the > > whole process. > > > > "Is your recruiter screwing you?". Probably if you let him. The whole > > argument in regards to the costing or cost structure recruiters use, > > use a niche recruiter, if you are going to use one. They will be more > > open to negotiation. > > > > Do your homework, don't be lazy. > > > > You have gone to agency becuase you are having toruble finding the > > right people. Don't go to monkey's when you want to find gold. > > > > Sorry but I fight for the good recruitment agent, the ones who add > > value to business's thorugh finding resources which are hard to find. > > In my eyes there is definate value add, Ive seen it. > > > > Regards > > > > -- > > SK > > > > On Mon, Jul 30, 2012 at 4:55 PM, Andrew Stone <[email protected]> > wrote: > >> 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. > -- 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/-/1kH8qVSuL64J. 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.
