How do employment agencies work?

Question

If I get a job through an employment agency, where do they get their commission from?

Does the company providing me with employment pay?

Does it come out fo my salary? If so, how does that work? A lump sum or a percentage over a period of time?

Answer 1

There are two types of employment agencies.

The first, employs you, and pays you an hourly rate, but charges the employing company a higher rate for your

services.  That is how they make money.  Usually after a three month period the employer can take you on as a permanent employee, but must pay out the agency.

The second is a 'head hunter' type agency.  They recruit workers that will be employed directly by the employer.

The head hunter screens resumes, sets up interviews with

the prospective employer, and gets paid a one time flat

fee by the employer for having found a suitable worker.

In this case you are directly employed by the company.  Many

companies use head hunters as they do not have to screen resumes.  By the time a prospective employee arrives for their interview, the employer knows they have the qualifications necessary for the job and might be a good match.

Answer 2

Any company which asks for money from you as an employee for finding them work is breaking the law. As an agency we get our fee from the  company, not you. For permanent we will ask for a fee of % of annual salary. For temp/contract we ask the company the wage they want to pay and then put a percentage on top to cover NI contribution, holiday pay and our margin.

Answer 3

the employment agency charge the employer a fee per hour and then pay you direct a lesser amount per hour and they make their profit that way.

      the advantage from the employers point of view is that they don't have to retain staff when its quiet and can literally just pick up the phone and say i want a secretary, driver or whatever next week for one week only.

     also the employer doesn't have to pay you redundancy and the employment law is much more lenient from the employers point of view although it has changed a lot in recent years.

   there was a case a few years ago when a centre was closed down in our city and even though the staff had been employed in the same job and the same place for 12 years they were entitled to no redundancy as they were all agency staff.

Answer 4

There is specific legislation related to Employment Agencies and Businesses (the Recruitment Agencies Act). They are not allowed to charge the ‘candidate’ as their client is the business seeking a worker and not the person seeking work. In this context, if you are recruited into a permanent role by the agency the agency will usually charge a fee to the employer, if you are employed on a temporary basis through the agency the agency is responsible for paying you (including entitlements to statutory holiday pay and maternity etc) and they charge their client business for the service of providing a temporary worker.  This charge is usually based upon a margin or percentage of the workers hourly rate. What you need to remember is that the agency is also responsible for paying NI and other costs that an employer would normally pay so the margin they charge is not by any means clear profit. Most recruitment consultants are paid commission based upon the amount of money/business they bring in. It is also worth remembering that to the agency you are not a customer, you are their product and in this context they are not supplying you with a service but rather supplying temp or perm workers to businesses. Sounds a bit cold hearted I know, but if it help to understand this when dealing with the money crazed, sales orientated individuals that tend to work as ‘Rec Cons’. Remember, Recruitment Consultants are sales people!

Answer 5

An employment agency takes a percentage of the margin, e.g. if the agency is paid £10 per hour by their client, who you are working for, they will keep a percentage of this, say £2. So you get £8 p/h and they get £2 p/h.

The agency employs you and pays you, you have nothing to do with the client, except you a governed by the r&r and they are responsible for you while on their property.