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Can I Ask My Recruiter for a Pay Rise by Cutting Their Margin?

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by Lisa Johnson

about 2 years ago

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I recently had a comment on one of my posts where someone wanted an idea of what they should be paid.  She had seen invoices from the agency, so she knew what they were charging her on-hire employer, and she wanted to know if she was being paid enough. That sounds simple enough, but in fact I had to ask a number of questions to find out what the real issue was.  

Did she think she was being underpaid, or did she actually want a pay rise? It turns out she was happy with the rate she was offered when she took the job, but she would like a pay rise after having worked in the temporary assignment for some time.  She wanted to know if she could ask the agency to increase her hourly rate but pay it out of their margin because, as she put it, 'they have made a lot of money out of me'. I am going to give you all a sage piece of advice.  If you want a rate increase, do NOT call your recruiter and ask them to fund it from their margin.  

That is a sure fire plan to get someone you NEED onside offside. You might think that the agency has made a lot of money (for doing nothing) from your contract/temporary employment.  

The truth is, agencies make significantly less money from your employment than you think they do.  For a start, on top of your base rate, the agency is responsible for paying superannuation, payroll tax, workers compensation, professional indemnity and general insurances.  That's just the obvious cost of your employment. If you think running a recruitment company is cheap, you have a rude awakening coming.  

Last year, one large recruiter in Australasia had over $1.4 billion in sales…and a profit of $14.2 million.  

Think about that for a moment.  They charged clients $1,400,000,000,000 in fees.  And had $1,399,998,580,000 in expenses.  Do not think for a minute that they are wasting money either – expense and cash flow control is a major focus in an industry like ours. Now, clearly, some businesses are more profitable than others, but the bottom line is that very few recruiters are getting hideously rich in this industry. 

It's expensive. So by all means, ask for a pay rise, but please don't justify it because we have 'made all this money' from you.  'All this money' is never as much as you think it is.

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