The Calculation Of Recruitment Charges

Question 1

How does billing work for perms?

Answer 1

Could be split between various point in the assignment e.g. one third at the start of assignment, one third on presentation of the shortlist and one third on candidate joining. Or in a single invoice when the candidate joins

Question 2

How does billing work for temps?

Answer 2

Client will be billed on an hours basis, against timesheets submitted by the temp worker. The temp worker remains an employee of the recruitment consultancy who will also be responsible for all statutory deductions (e.g. PAYE and National Insurance)

Question 3

What factors should be considered when deciding how much to charge a buyer?

What are the additional factors to consider specific to temp workers?

Answer 3

• economic climate
• the desire to gain the business
• availability of the skills required
• brand association
• cost of hire
• number of vacancies
• anticipated lay rate
• terms of any contract
• agreed payment terms
• legal constraints e.g. National Minimum Wage
• additional costs e.g. for Personal Protective Equipment (PPE)
• rebate terms
• candidate expectations
• difficulty to source candidates
• worker training costs
• desired margin
• responsibilities and expertise involved
• pay equality

Specific to temp:
- length of assignment
- employer’s national insurance contributions
- holiday pay
- pension deductions

Question 4

What is margin calculated from?

Answer 4

The selling price (normally expressed as thenGross Profit Margin percentage)

Question 5

What is mark-up calculated from?

Answer 5

The cost of a product or service (normally expressed as a percentage)