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Q: Typical temp agency fees ( Answered 5 out of 5 stars,   1 Comment )
Subject: Typical temp agency fees
Category: Miscellaneous
Asked by: svannes-ga
List Price: $10.00
Posted: 02 Jun 2004 10:21 PDT
Expires: 02 Jul 2004 10:21 PDT
Question ID: 355382
This is a simple 2 part question

1.  What percentages do temp agencies typically make for placing
workers on job sites?  The jobs I speak of are computer programming
jobs, if that makes any differences on the percentages.
2.  Secondly, what percentages do recruiters make for placing people
in a new job?

At least three references for each, please.

Request for Question Clarification by nenna-ga on 02 Jun 2004 12:40 PDT

This is a harder question than it looks. Most temporary agencies do
not want to give out that information to the public, as it is how they
make their money in a competitive field.

I have one example in print for your first question, and two local
contacts in the temporary field that gave me information as well
regarding the agencies they work for and what their company pays the
agency as opposed to their salary. The two local contacts are both in
computer jobs if you will accept those as references.

As for your second question, I contacted about 10 different temp
agencies and was told by all 10 of them in my area that they pay a
flat salary for their employees, that it is not based off who they
place in a position, or how many.

Some corporations have recruiters, which is a bit different from a
temporary agency, which they do pay a percentage to the recruiter once
they place someone, and I have an average figure from one of my local
contacts for that as well.

Let me know if that would be an acceptable answer.

Google Answers Researcher

Clarification of Question by svannes-ga on 02 Jun 2004 13:34 PDT
that's fine.  post.

Request for Question Clarification by serenata-ga on 02 Jun 2004 14:11 PDT
The SBA has some excellent information on temp agencies (how to figure
in the actual costs involved) plus the temp-to-perm placement costs,

I can give you some of those figures.

Remember, there are costs such as FICA, withholding, Social Security
and other state and local fees to be considered (and the employer's
contributions, since the temp agency is the actual 'employer'), plus
they usually aim at a 18-20% profit margin over the actual costs

For a temp-to-perm and recruiting, the markup and fees are usually
based on an average or general fee which covers costs of recruiting,
supervising, etc.

Those figures are available, if that is the information you are looking for.

Hope this helps,

Google Answers Researcher
Subject: Re: Typical temp agency fees
Answered By: nenna-ga on 02 Jun 2004 20:45 PDT
Rated:5 out of 5 stars

As for your first question, I found one internet source and two
personal references to help you get an idea of percentages.

Typically, the amount paid to the temp and the amount the company is
charged is up to the owners and the managers and it varies greatly.

"The Homeless Grapevine, a publication relating to the homeless and
their plight, (Where these figures are from) did some checking and
found Minuteman Temp Services quoted a price of $8.25, Manpower Temp
Services was charging $9.50, Area Temps charges $10.72, and Ran
Temporary Agency charged companies $9.00 an hour.
The companies that were contacted without identifying ourselves were
substantially higher than the price quoted to us by Ameritemps, who
knew who we were. ($6.00 an hour)
Standard costs associated with hiring a new employee including taxes,
benefits (which temp agencies offer only after a period of service)
and administration is 20% added to the salary. This would amount to 90
cents for a $4.50 an hour job. Companies pay temporary companies
around $9.00 an hour, which would mean the temp companies are making
$3.60 per hour in profit from each employee."

Now, on a more personal note. In Omaha, Nebraska.... I know of 2
personal contacts, one a system administrator and one an entry level
IT employee, both working under a different temp agency.

The system administrator makes $23.50 an hour himself, but it has been
disclosed to him that the person paying his temp agency pats almost
$40.00 an hour. He works 40 hours a week, with medium health benefits
provided by the temp service.

The entry level IT employee makes 11.50 an hour through the agency,
but his company pays the agency almost 20.00 an hour. This includes no
health benefits provided by the temp agency.

As far as recruiting goes, like I had mentioned before they pay a
flat salary for their employees, that it is not based off who they
place in a position, or how many.

However, for a headhunter/recruiter placing people directly within a
company, the average commission is 3.5% to 4.5% of the employee's
(that was placed) yearly salary. This is not including a base salary
of $10.00 an hour his employees make as well. This information comes
from R. Robinson, in Omaha, NE. Mr Robinson directly manages over 10
local headhunters for different offices in Omaha, Nebraska and says
that their pay scale is on par with the national average.

If this answer requires further explanation, please request
clarification before rating it, and I'll be happy to look into this
Google Answers Researcher
svannes-ga rated this answer:5 out of 5 stars and gave an additional tip of: $2.00
great answer.  thanks for the info.  sorry I didn't get to rate this for some time.

Subject: Re: Typical temp agency fees
From: nenna-ga on 23 Jun 2004 21:10 PDT
That's ok, thanks for the rating, I'm glad I could help you!


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