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. > > apet...@bkit.com.au. 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. 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