How much do employment agencies charge an employer?

Question

Hello,

I am working for a company through an employment agency. The company I am working for are very pleased with me and would like me to work for them as a consultant. Therefore I am going to set up my own business and charge them daily/hourly rate for my service.

However, they have agreed to meet in the middle of what the agency is paying me and what they are paying the agency. The agency wont tell me the rate that they are charging. So how can i find out the rate they are charging so that i don't get lied to by the company and hence get less pay?

Answer 1

It varies by location. But I wouldn't be surprised if the company is paying twice or almost twice what you're getting paid by the employment agency.  If you work as a temp for an employment agency, they usually charge the company about twice what they would pay you as a general rule.  If you're hired as a straight out full time employee, the fee the employment agency charges the company is usually about 10 or 15% of a year's salary.  

One thing to consider, if there is a signed contract in place between the company and the employment agency regarding hiring anyone they've used from the employment agency, the company may not be able to hire you without the employment agency raising the legal issue.  In other words, it is routine procedure for employment agencies' contracts to prohibit the client company from hiring or consulting with any temp or potential employee that they have met through the employment agency.  They have this wording to keep companies from simply hiring the best candidate without paying the required fee to the employment agency.  IF you signed a contract even though you're not paying them a fee,  I bet your contract also prohibits you from taking a position (on your own) with any company you met via the employment agency.

Answer 2

Geez, if you are worried about them lying to you, are you sure you want to work for them?

What they pay the company depends on the type of work and the hourly rate.  You could ask to see the invoices the company has received from the agency.

You may have another issue here - you will probably owe the agency a placement fee if you go to work directly for the company they placed you at, whether as an employee or as a contractor.  And that fee could be pretty huge.