[Infographic] What’s Included in a Recruitment Agency’s Mark-Up?

June 19, 2017

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Posted by: Lee Sitarz

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To understand the full benefits of partnering with a recruitment agency, it’s a good idea to learn where exactly your money goes. As an employer, you likely already know that working with recruiters can enable you to hire top professionals much quicker and more easily than you could on your own—but that’s just scratching the surface.

We’re here to tell you what’s included in a recruitment agency’s mark-up, and how those costs directly contribute to you getting the best service possible.

Background Screening

To ensure every candidate is a top performer, recruitment agencies must conduct rigorous background screening to verify credentials. As a core part of the job, a good recruiter will administer the credit, criminal, educational, and employment verification required by the client—a process that normally can be very costly and often difficult to conduct.

Recruitment agencies are able to partner with a variety of third-party screening providers, which provides maximum flexibility and fast turnaround time for their clients. This way, recruiters are able to pass along the savings to employers, who would otherwise pay a premium for every stage of the screening process.

Candidate Training

When candidates have the potential to be incredible performers but may not yet possess the exact skills to get hired in their chosen career paths, recruitment agencies will conduct free training to help bring them to their full potential.

On the occasion that candidates may be missing a skill or knowledge base that would make them the right fit for the role, a recruiter will work carefully with them to train them on new software or knowledge-based information—giving them the tools to succeed. This way, a client won’t have to choose between a less qualified candidate and a potential great employee who simply may not have all the right skills.

Skills Testing

If you’ve ever made a poor hire as an employer, you know how easily a great-looking candidate can turn out to be less than ideal once they actually start in the role.

To ensure candidates are skilled in the right areas to succeed in their assignments, a recruitment agency will provide tailored skill testing to temporary and permanently placed employees. These tests provide a benchmark for what it takes to succeed in the role—and only candidates who meet and exceed these criteria will be assigned to new placements.

In combination with the right soft skills and a great cultural fit, these tests results can help employers feel confident the candidates they meet face to face will be great employees.

Legislative Compliance and Due Diligence

While larger organizations have busy HR departments, legal counsel, and accounting supervision at their fingertips, smaller clients don’t often have access to these types of resources to ensure that legislative compliance and due diligence are in order.

As employers of temporary employees, recruitment agencies handle all of these important employment policies. Termination and severance requirements, compliance regarding safety training, provincial employment standards, and confidentiality and non-disclosure agreements are all taken care of in a timely and professional manner.

All of the associated administrative time and costs are included in the mark-up as well.

Employment Advertising

Among print advertising, online job boards, and social media campaigns, the task of reaching and attracting top talent can be extremely expensive—especially for a small business. When you want your reach to be as wide as possible, a recruitment agency can buy employment advertising at the most favourable rates possible.

This means working with a recruiter can boost your ability to reach top-tier candidates without the astronomical costs that can come with advertising directly.

The Cost of Payroll

Part of a recruitment agency’s mark-up goes to covering the cost of carrying payroll for a large workforce. Its back office accounting experts will not only ensure employees are paid on time, but will also cover the cost and time requirement needed for payroll administration, including delivering pay stubs and direct deposit.

Government Burdens

As a business owner, you’re well-versed in the financial burdens placed on employers by the government. Up to 30 percent of a recruitment agency’s markup covers government-mandated costs, including employer taxes, vacation pay, employment insurance premiums, and CPP contributions.

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Lee Sitarz

Lee Sitarz

Lee earned a degree in marketing from York University, which has helped her succeed in various roles in the staffing industry. She has over 20 years of progressive staffing experience including Branch Management, Sales, Operations, and Marketing. Lee is active at giving back to her community, and spends her down time with her husband and three beautiful daughters.

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