IT contractors tot up agency commission

Seven tech recruiters are feeding candidate pay data into an online tool that should help guard against less reputable agents taking an oversized commission by approximating how much IT skills command by the hour.

Users of ‘Fee Speedometer’ are invited to enter their duration of contract, skill, experience, location and current daily rate, to discover whether their agent – or client – is short-changing them for their IT expertise.

Its developers, RoleConnect, admit the response has not been entirely positive, with feedback ranging from “surely this can’t be accurate” to “crazy,” presumably because it returns only rough earnings for both agent and contractor alike.

Explaining its need in the marketplace, the tool’s developers said they wanted to “throw some light and some transparency” on the issue of IT recruitment agency commissions, particularly as they can range from ‘10% to at least 25%.’

However it cautioned: “Ultimately every contract awarded is a negotiation between, at first, the employer and the recruitment agent and secondly, between the recruitment agent and the contractor.

“Of these three parties, two are at best blinkered and at worst ‘in the dark’ as to who is paying what to whom – the recruitment agency are controlling the information flow both to the employer and IT contractor.”

Despite the suspicion of agents, seven IT staffing firms including Robert Walters, Hudson and Morgan McKinley have agreed to contribute their annual pay data for Ireland, with a UK version of the tool expected shortly.

But similar to the developer, the recruiters emphasised that data returned by the tool should be used only for guidance, as it is limited to averages and makes no allowance for size of company or candidate benefits, among other factors influencing IT contractor pay.

Nevertheless, “IT contractors can [now] calculate how much commission recruitment agencies make on their contracts [so] it’s been causing a bit of a stir”, RoleConnect’s founder, Kieran Logan, told ContractorUK.

“For example, a Java developer with five years’ experience working in Dublin on a six-month contract and earning €400 per day – the tool looks up the aggregate recruitment agency data which shows an average charge of €540 per day; therefore the agency earns €140 per day and €18,270 over the lifetime of the contract.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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