Pimps. Blood Suckers. Ambulance Chasers. Scum. Some of the words I've heard used to describe Recruiters by those within Australian industry.

Often though I've found that hostility or hatred is underpinned by misconceptions about how the recruitment industry works......


Showing posts with label pizza. Show all posts
Showing posts with label pizza. Show all posts

Thursday, March 29, 2012

So Who Owns the Margin? (and the pizza analogy)

Contractors often feel recruiters are cutting into their margin. "I'm being paid $60/hr, and they're being paid $75. What a farce. I should be getting that $75."

Suffice to say I don't see it that way.

For a start, that $75/hr includes payroll tax and stat costs like workers comp, PI and PL insurance - that's about $4 of the $15 margin gone straight to the government and insurers right there.

#2. Clients expect to pay more for a candidate sourced through an agency. We eliminate a lot of the hassles associated with recruitment, we mitigate a lot of the risk of making a new hire, and source better candidates than clients can source themselves. Clients don't expect that to happen for free - they expect to pay more for a candidate sourced via an agency. That $75 they are pending to source via an agency will be significantly less if they go the DIY recruitment approach.

The clients aren't paying just for the candidate. They're paying for the process - the search, the shortlisting, the interview facilitation & the ref checking. And the margin also has to pay for the contingent nature of recruitment, and the cost of establishing a relationship with the client in the first place.

It's a bit like ordering a pizza from Pizza Hut rather than making it yourself. You're paying not only for the ingredients of the pizza, but also for the convenience of it being made, cooked and home delivered.