5 ms·

To be fair, this is how placement agencies work for contract staff here in Canada, too. The agent maintains separate contracts with the client and the candidate

by pards 6y ago

To be fair, this is how placement agencies work for contract staff here in Canada, too. The agent maintains separate contracts with the client and the candidate and takes a cut (often 30-40%) for the duration of the contract. In return for their cut, the agent handles the payments and provides the guarantee that the candidate gets paid on time even if the client pays late. There's usually a clause in both contracts that prevents them from cutting out the middle-man.

2bor-2n 6y ago
So, does such agencies provide benefits other than salaries to candidates?
- wwn_se 6y ago
  Yes, they for example provide access to clients not willing hassle to work with a single individual. If the candidate is leaving they may provide a different one. And the client can negotiate several candidates at a fixed rate and the agency can provide different insurances and help with taxes an so on (for both parties). A good agency would also help with the negotiation towards the client. And find you a new client if the client drops you.
mehrdadn 6y ago
So basically they're paying 30-40% of the salary for a payment insurance service? That seems a little... excessive? Just how often are payments missed to warrant this kind of a premium?!
- scarface74 6y ago
  And in the US, they pay the employer’s side of FICA -7.5% and unemployment insurance. But 30% is not unreasonable. There isn’t any place that I have worked that hasn’t had a much larger gap between my pay and my billable rate even when I was working full time and we were doing custom work for clients.
- S_A_P 6y ago
  Most staffing companies work like this in the US as well. There are a couple of ways they maintain their middle man status. 1) most of the jobs they provide personnel for are not overly specialized and the client is happy to no have to hire for and deal with hr issues around these positions. 2) the staffing firms often oversell their role to contractors in how difficult it is to make sure they get paid in a timely manner/offer “career development” training (e.g. letting the contractor work) 3) staffing firms often do a lot of client wining and dining to maintain favorable status. 4) staffing firms often hire young and attractive reps to distract.
  - mehrdadn 6y ago
    I thought the only service being provided is just basically insuring the income. If they have to deal with finding/maintaining contractors/clients and other kinds of overhead then of course that changes things—I just didn't infer that was the situation in Canada from the comment.
  - blaser-waffle 6y ago
    > staffing firms often hire young and attractive reps to distract. LOL, what? "The only reason we used staffing firms was cuz them reps be dummy thicc". I worked for a small/medium ISP for a while and did a lot of hiring for entry-level and mid-level roles. If we threw an ad up on Craigslist for DC, NYC, or Baltimore we would get back, easily, 500+ responses. The signal-to-noise ration was insane. A huge chunk of the responses would be spam or automated-resume-slinging-bots, and like 30-40% would be immediately disqualified for being in different states/countries or being wildly unqualified. Even after adding a few homemade filters and a basic online tech quiz, we'd still end up with like 40 candidates to screen further. The viability of these candidates was... not great... and a lot of them tended to split after a couple years, and several didn't last 6 months. Then we started using a headhunting firm and they did all of the sorting, vetting, and gave us a great 3-to-6-month hiring window. We could ask them for 3 decent clients -- "decent" was relative sometimes -- and have them in a couple weeks, get them hired comparatively quick, and turn them to full-timers in 6 months if they were good; usually we did. Some of the hires were for very specialized roles (frame relay/fiber optic types) that often took a while to source or had to be lured out of other places, and they were generally good at doing that too. I'd never want to be one of the contract-to-hire candidates again (once was enough) but I'd be hard pressed dissuade others from using them.
ValentineC 6y ago
> provides the guarantee that the candidate gets paid on time even if the client pays late. This might be the case in large agencies that have their processes right, but it's likely that smaller agencies won't have the cashflow to guarantee that their downstreams get paid on time — even moreso if they have to account for their own staff as well.
user5994461 6y ago
The standard cut is 10-20% when the agency is only referring a person to the client and doing nothing. Working at an outsourcing firm or sweat shop, these can take a 30-40% cut but they do other things besides just referring a person. Often they take care of a full project from start to finish or they provide a complete development team.
blaser-waffle 6y ago
> There's usually a clause in both contracts that prevents them from cutting out the middle-man. Usually that has a fixed expiration date, e.g. placement-to-hire is a 6-month contract. Otherwise you're just a professional services company with contractors, and that usually carries a 3-6 month non-compete or something along those lines.

by pards 6y ago

2bor-2n 6y ago

So, does such agencies provide benefits other than salaries to candidates?

wwn_se 6y ago
Yes, they for example provide access to clients not willing hassle to work with a single individual. If the candidate is leaving they may provide a different one. And the client can negotiate several candidates at a fixed rate and the agency can provide different insurances and help with taxes an so on (for both parties). A good agency would also help with the negotiation towards the client. And find you a new client if the client drops you.

mehrdadn 6y ago

So basically they're paying 30-40% of the salary for a payment insurance service? That seems a little... excessive? Just how often are payments missed to warrant this kind of a premium?!

scarface74 6y ago
And in the US, they pay the employer’s side of FICA -7.5% and unemployment insurance. But 30% is not unreasonable. There isn’t any place that I have worked that hasn’t had a much larger gap between my pay and my billable rate even when I was working full time and we were doing custom work for clients.
S_A_P 6y ago
Most staffing companies work like this in the US as well. There are a couple of ways they maintain their middle man status. 1) most of the jobs they provide personnel for are not overly specialized and the client is happy to no have to hire for and deal with hr issues around these positions. 2) the staffing firms often oversell their role to contractors in how difficult it is to make sure they get paid in a timely manner/offer “career development” training (e.g. letting the contractor work) 3) staffing firms often do a lot of client wining and dining to maintain favorable status. 4) staffing firms often hire young and attractive reps to distract.
- mehrdadn 6y ago
  I thought the only service being provided is just basically insuring the income. If they have to deal with finding/maintaining contractors/clients and other kinds of overhead then of course that changes things—I just didn't infer that was the situation in Canada from the comment.
- blaser-waffle 6y ago
  > staffing firms often hire young and attractive reps to distract. LOL, what? "The only reason we used staffing firms was cuz them reps be dummy thicc". I worked for a small/medium ISP for a while and did a lot of hiring for entry-level and mid-level roles. If we threw an ad up on Craigslist for DC, NYC, or Baltimore we would get back, easily, 500+ responses. The signal-to-noise ration was insane. A huge chunk of the responses would be spam or automated-resume-slinging-bots, and like 30-40% would be immediately disqualified for being in different states/countries or being wildly unqualified. Even after adding a few homemade filters and a basic online tech quiz, we'd still end up with like 40 candidates to screen further. The viability of these candidates was... not great... and a lot of them tended to split after a couple years, and several didn't last 6 months. Then we started using a headhunting firm and they did all of the sorting, vetting, and gave us a great 3-to-6-month hiring window. We could ask them for 3 decent clients -- "decent" was relative sometimes -- and have them in a couple weeks, get them hired comparatively quick, and turn them to full-timers in 6 months if they were good; usually we did. Some of the hires were for very specialized roles (frame relay/fiber optic types) that often took a while to source or had to be lured out of other places, and they were generally good at doing that too. I'd never want to be one of the contract-to-hire candidates again (once was enough) but I'd be hard pressed dissuade others from using them.

ValentineC 6y ago

> provides the guarantee that the candidate gets paid on time even if the client pays late. This might be the case in large agencies that have their processes right, but it's likely that smaller agencies won't have the cashflow to guarantee that their downstreams get paid on time — even moreso if they have to account for their own staff as well.

user5994461 6y ago

The standard cut is 10-20% when the agency is only referring a person to the client and doing nothing. Working at an outsourcing firm or sweat shop, these can take a 30-40% cut but they do other things besides just referring a person. Often they take care of a full project from start to finish or they provide a complete development team.

blaser-waffle 6y ago

> There's usually a clause in both contracts that prevents them from cutting out the middle-man. Usually that has a fixed expiration date, e.g. placement-to-hire is a 6-month contract. Otherwise you're just a professional services company with contractors, and that usually carries a 3-6 month non-compete or something along those lines.