Who benifits from Third Party Recruiters?

[DPK]

I want to get people's opinion on this because I am trying to find out if I am in the majority or minority opinion for this issue, and if I even have the facts straight.

What is the point for a large corporation to hire third party recruiters to find employees to do a certain job? Is this so the corporation does not have to pay certain benifits? Do they want to get out of paying future unemployment? If the company is going to pay recruiters a good amount of money to recruit 'quality' workers , and those workers only get about half of that amount paid to the recruiter, then why wouldn't the corporation just use their own HR staff to do the hiring and tell people the are a temp employee?

For example, Corporation ABC hires Recruiter XYZ to find some people who can do a certain job for a temporary amount of time. ABC pays XYZ $45,000 per year for each employee and then XYZ pays out only $22,000 - 25,000, thus making a large profit for each worker. Why wouldn't ABC just hire an HR employee to do the recruiting and then pay $27,000 instead of $45,000 to each employee. That HR person can be responsible for a certain amount of temporary and contracted employees, thus saving the corporation money and paying employees more.

 

[RagingBITCH]

Originally posted by: DPK
I want to get people's opinion on this because I am trying to find out if I am in the majority or minority opinion for this issue, and if I even have the facts straight.

What is the point for a large corporation to hire third party recruiters to find employees to do a certain job? Is this so the corporation does not have to pay certain benifits? Do they want to get out of paying future unemployment? If the company is going to pay recruiters a good amount of money to recruit 'quality' workers , and those workers only get about half of that amount paid to the recruiter, then why wouldn't the corporation just use their own HR staff to do the hiring and tell people the are a temp employee?

For example, Corporation ABC hires Recruiter XYZ to find some people who can do a certain job for a temporary amount of time. ABC pays XYZ $45,000 per year for each employee and then XYZ pays out only $22,000 - 25,000, thus making a large profit for each worker. Why wouldn't ABC just hire an HR employee to do the recruiting and then pay $27,000 instead of $45,000 to each employee. That HR person can be responsible for a certain amount of temporary and contracted employees, thus saving the corporation money and paying employees more.

Um, first off - temp/job placement agencies don't get 45% of what the company pays out. Do the math - what idiot would justify that? The norm from the last one I heard was about 10%.

Second - as a temp employee, they don't really have any benefits that the company would allot to a normal employee. That just about pays for the 10% they're paying the company anyway.

Third - if a department is going to be short a few people during the summer in jobs like data entry or some entry level type job, it's much more cost effective and less time consuming to go to XYZ and have them supply people with "talent" in that area who can do the job temporarily and then wave bye bye to them once the permanent ones return.

We're in the process of actually hiring an outbound sales guy for our company now and are using a specialized temp agency - I think the going rate was like 10-15%, I'm not entirely sure. They are doing all the screening of resumes/hiring of temporary employees. That takes time, effort, and manpower. Our time is better spent focusing on the development of business than wasting time sifting through hundreds of frickin' resumes from Monster or Careerbuilder, then scheduling multiple interviews with different people and then the same people. Get the drift?

 

[DPK]

Can you explain what you mean by your first point? 10%? Can you give me a little more detail on how the process works money wise... I am pretty sure that I was being paid a lot less then what the company was giving the recruiters for my last job.

I am talking about jobs that last for years with temp workers from a temp agency doing those jobs.

Also, I worked recently for Corporation ABC who out sourced their work to Company X who used Company Y as their placement recruiter who used Company Z as theirs., So essentially I was working at one place and then three other companies at the same time. WTF was up with that? And I really didn't question it then because I was just happy to be working.

 

[RagingBITCH]

The average payout from Company X to Recruiter XYZ is anywhere from 10-20%. At my first job out of college I got paid like $10 an hour at Capital One Auto Finance through Adecco. COAF really paid something like $11.50-$12 for the job, so that's 14-17% they got for every hour I worked.

Regarding jobs that last for years - sometimes people miscalculate how long a job will take. It's just a cost/benefit analysis of keeping the person as a temp employee vs hiring them on full time. Usually after XXX days with the temp agency you get benefits through them, and I'm sure Company X is aware of that. I'm not aware of why ABC used X who used Y who used Z in your case though.

 

[DPK]

Ok, thanks. Now let me ask you this:

At my last position there were people making a good amount more then me but they did the EXACT same job and were also temporary employees. The only difference is that they were working for a different recruiter. The two things I can assume are:

A. My recruiter was seriously screwing me over by paying me less
B. My recruiter was getting less from this Corporation for each employee then the other recruiting company

If B is correct, then why would the Corporation use two different recruiting agencys and pay one more then the other per employee for the same jobs?

 

[Zenmervolt]

Originally posted by: DPK
Ok, thanks. Now let me ask you this:

At my last position there were people making a good amount more then me but they did the EXACT same job and were also temporary employees. The only difference is that they were working for a different recruiter. The two things I can assume are:

A. My recruiter was seriously screwing me over by paying me less
B. My recruiter was getting less from this Corporation for each employee then the other recruiting company

If B is correct, then why would the Corporation use two different recruiting agencys and pay one more then the other per employee for the same jobs?

It's possible that the company contracted through two different agencies because one was not able to fill all of the available positions. The other temps who were doing the same job for more money; did they come onboard after you or before? If they came on after you did, then it's possible that the recruiter through which you were hired was unable to provide enough workers and as such the company was forced to go through a different company, by which time they were more desperate for workers and were willing to offer more money.

It's also possible that the other recruiter was not a general recruiter, but recruited for specific areas and as such was able to offer candidates with more specialized skills and thereby command a higher price. I for one am feeling the hit of not having had an internship in college (my own fault for the way I did my major, entire thing my senior year). Because I don't have as much experience as other people, even though we many have graduated at the same time, I am not able to request as much pay, even if the position is exactly the same and the duties are identical.

Pay scale has so many variables it's impossible to pinpoint it unless you're on the inside of the company, and even then it's often impossible unless you're in HR.

ZV

 

[DPK]

Bump.

Some employees from the other recruiter were there before me and some are are being hired after me too, as the Corporation is still using both recruiters at the same time. I also know of an employee from my recruiter who made more then me with no experience and a degree in english, whereas I have an information technology degree from the same school and experience working as a student. That pissed me off too, especially considering that my recruiter told me that I was probably going to be hired for the position 5 months before I actually started, only for me to find out that this other person was hired inplace of me. They finally brought me on when someone else left.

I hope that it doesn't sound like I am complaining. I am just trying to find out more info so I know better if I need to use a recruiter again.

By the way, I will be starting a permant job next week, so now I am just trying to find out what was going on whereas before when I was working the temp job and a second one afterwards, I had no time.