Most organisations use recruitment agencies when engaging contractors. Typically agencies charge a mark-up of around 15% when a company uses them to find and engage a contractor. For a contractor on £400 per day this works out as the agency receiving £60 per day in gross margin. Most recruitment agencies offer a lower mark up of around 4% if the client company does the work of finding the contractor and the agency is only responsible for managing the contractual and payment relation between the end user organisation and the contractor.
This different between the 15% mark-up charged if the agency finds the contractor and the 4% mark-up charged if the end user organisation finds the contractor means that for a typical contract a company can save £44 per day by sourcing the contractor themselves. Over the life of a 6 month contract this works out to a saving of £5,500.
The total saving achieved by an organisation will depend on how many contractors they source directly. However, we estimate that, by using Resourcing Circle to identify high performing contractors that they’ve used previously, a company which engages 200 contractors per year could source 20 of these directly and save £110,000.
The financial savings possible are even greater when we factor in the reduced time needed to onboard a contractor who has previously for your organisation. Also, in addition to the financial benefits, by using Resourcing Circle companies can reuse the best contractors and avoid rehiring those who perform poorly. This will enable companies to achieve higher quality while also controlling costs.
If you’d like to know more about the Resourcing Circle software please visit – www.resourcingcircle.com.
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