In any business, setting your prices is tricky. You can stick to the industry average, try to undercut a little to get work in faster, or charge slightly more for a premium service.

As a temporary recruitment agency, knowing what to charge your clients is vital to your success, especially if you’re relatively new or a start-up. These prices can change over time, but understanding all the costs involved can help you set rates that cover everything and help you grow your agency.

To help you make this decision, today we’re going to talk about the costs involved with temporary recruitment, so you can establish exactly what you should be charging.

 

The Costs of Running a Temporary Recruitment Agency

Naturally, every recruitment agency will have unique overheads, and can adapt what they charge accordingly, but we can at least break down some of the costs involved.

Another factor is the size of your agency. Unlike other businesses, you can run a temporary recruitment agency on your own, without any permanent salaries to pay. This is tough, as we talked about in a recent blog about solo recruiters, but can be very lucrative if you have the right support.

If you are flying solo, you can save a fortune on office space, even operating out of a home office if you have the facilities available. This means more funds for CRMs and other software, as well as third parties like us who can help you manage all the admin.

For agencies that do have a team of permanent hires, their value comes at a price. On top of their salaries, which need to be competitive if you want the best, you also need to consider national insurance, pensions, and other benefits that will keep them satisfied.

A company that is keen to grow needs outside support. Regardless of how big your team is, you don’t want to fill their workday with administrative tasks when they should be building up a candidate database and filling the vacancies of your clients. For a small cost, which works out cheaper than a full-time administrator, we can handle all the admin and a lot more besides.

Everything from arranging interviews to collecting feedback from workers after their contract ends all takes time – time that you should be charging for.

There are a lot of other costs that a new start-up might not be aware of straight away. The cost of hosting your web site, as well as the price you pay to build it in the first place, and other marketing services like branded clothing, business cards, and entry to different Expos and events. This can all add up fast, eating away at your savings or business loan.

But these are all fairly standard costs; nothing you can’t handle. The main cost of temporary recruitment is the temporary workers themselves.

 

What to Charge Clients for Temporary Workers

When you provide temporary workers, you will be paying them on behalf of your client. These are weekly payments, typically paid on a Friday. You then invoice the client either once a month or every 90 days depending on the contract, rinse and repeat.

Naturally, with all the work you’re doing sourcing temp workers and assigning them on your clients’ behalf, you shouldn’t just charge the cost of their wages. But this is where it gets tricky, as the going rate for temporary workers isn’t set in stone, and can be anything from 10% over the salary costs to closer to 100%. A few factors can affect this.

The main one is the industry. If you have a niche, and only work with one particular sector, such as education or healthcare, you’ll be providing more specialist workers. These will naturally have a more valuable skillset and will earn higher wages. To add these candidates to your database, you need to ensure that working with you is enticing, which is tricky to do on a shoestring budget. But clients will also understand the value of the workers you provide, and will be willing to pay more.

More established agencies also have more overheads, and therefore will be charging more to cover all costs. This is usually backed up by their plethora of resources and large database, and hundreds of referrals that show they’re worth the fees.

The recruitment industry itself also has seasonal demands, making some months much busier than others for both the recruiter and their clients. This is why some agencies choose to have flexible fees that fit with their current demands, although this isn’t always the case.

But just having the numbers in mind isn’t enough.

 

How you Charge for Temporary Workers

Being upfront about fees is vital for preserving trust with your clients. Surprising them with a more expensive invoice won’t often go well, and there’s only so much our invoicing support can do to help if they just don’t want to pay it.

We have 0 hidden fees, which helps build a strong relationship with our clients, and we’re always transparent when the cost needs to change. This is something we recommend to the companies we work with too. Even if you can’t give an exact number up front, having the rates and all necessary fees plainly stated can be very handy for all involved.

The relationship between you and your clients is what makes the difference between success and failure in the world of recruitment. Thankfully, our service can help you to build trust and keep everyone happy.

 

Recruitment Funding with a Human Touch

There are a lot of recruitment agencies out there, so what can you do to stand out? Having low prices isn’t ideal, and just doing the work to an exceptional standard might not be enough. If you’re in this situation, it’s time to team up with Back Office Support Services.

Unlike other third-party providers, who feel a million miles away from your business, we do all we can to feel like part of the family. With us you only get two points of contact, your payroll account manager and your dedicated credit controller. They’ll get to know you; you’ll get to them, and they’ll represent you and your business within their correspondence with clients.

Establishing costs is a tricky part of recruiting, but once yours are set in stone, you can invest your money wisely and ensure that your workers are still paid on time, every time.