Employer Insights

The Temp, the Client, Their Job and Its Fee

Mark Smith Posted by Mark
min read
Studio Republic Fot K Kq Wnmq4 Unsplash

In Australia, the number of people working in a temporary or casual position is approaching record levels at well above 30%. Companies enjoy the flexibility offered by hiring temporary staff , giving them opportunities to bring in difficult to source skills or changing staff levels in response to market conditions. On many occasions, those people working as a temp become aware of permanent opportunities in companies where they are working and apply for these roles. This is not uncommon; however, many people misunderstand how the process works when a recruitment agency is involved. Last week, the temporary/contract accounting team at people2people faced just this situation. One of our on hired temp staff was completing an assignment to fill a gap, while our client engaged in their own recruitment exercise for a permanent staff member. Not an uncommon occurrence. 

The candidate was interested in the permanent position and applied for the role while completing the temporary assignment. All of this sounds fine, and people2people were encouraging both the client and candidate to pursue the opportunity. The situation, unfortunately, unravelled when it became clear that our temp was one of two candidates suitable for the role. The other was sourced directly by our client. 

This means that to hire our temporary member of staff, a 'temp to perm' fee would apply, and if the client hired their own directly sourced candidate, no fee would be applicable. The client hired the directly sourced candidate and advised our temporary member of staff that the role was not offered because of the applicable fee. The outcome of which, unfortunately, has been an aggressive call by the on hired employee, accusing people2people of 'putting him onto the unemployment line'. This is not a good situation for our temp member of staff, and I think that his angst has been caused by a fundamental misunderstanding of how temporary recruitment agencies work. Here are a couple of points for anyone in a similar situation:

  • The agency works hard to win clients to be able to present opportunities to people looking for work. This is not cheap, and they are in business. Nothing is for free.

  • Without the agency involvement, neither the employer nor the prospective employer would have met. The price of this introduction is the temp to permanent fee.

  • Although the agency had earned revenue through the margin charged while the temporary assignment was underway, this is not sufficient to cover the total costs. Some fees are waived only after the temporary member of staff has been working for an extended period of time and/or recruitment volumes are increasing. This is a negotiation between the client and the agency.

  • As a temporary/on hired employee, the rates, fees and terms of business in general between the agency and the company are negotiated. The temporary employee is not privy to this information, as it is commercial in confidence.

  • A temporary/on hired employee is the employee of the recruitment agency and on hired to the client. All employment negotiations should be with the legal employer, i.e. the agency.

Finally, I would like to say that our client has used our agency fee as a scapegoat when informing the candidate that they were unsuccessful. They have used a financial obligation between the agency and themselves as a reason for rejecting the candidate. Not good form. In our recent people2people situation, we did offer substantial discounts to try and facilitate the hire, but to no avail. As a footnote apologies to Peter Greenaway – the title of this blog was an ode to his often misunderstood masterpiece The Cook, the Thief, His Wife and Her Lover.