Most recruiting companies I've worked with in the past only get paid if a candidate stays for 3 or so months and doesn't get fired. And it's usually X% of the candidate's salary. Are there places that essentially take a portion of the candidate/employee's paycheck every month? If so, do you know which recruiting firms do that?
Temp hiring does this. But employees don't see this. Basically company pays agency per pay period. This technically isn't candidates pay, it's a fee the company pays agency.
Most DOL bureaus across the US prohibit charging candidates any placement fee for finding them a job or taking any money out of their paycheck. It’s against the Law. Some staffing agencies will undercut the salary or hourly pay rate to the candidate to offset a low placement fee or low markup that was set up between the client and staffing agency. Agencies that do not have MSAs with the client where they need to adhere to a set fee chart, are typically the worst offenders at lowering the compensation paid to the candidate so they can pay themselves more. You might see this rogue practice by 1-2 man shops. Firms like Robert Half, Manpower etc wouldn’t do that (they don’t need to either, making too much $$$)
I see. I realize now why the 3rd party recruiting team urged me to take the offer despite it being lower than average. I argued the hourly rate up a little more, but it doesn't match my other full time offers that I have. My reasoning was that the company looks better on my resume and when conversion to full time happens, that salary would be much higher. Is there anything I should have done differently? Argue for a higher hourly rate still?
Which recruiting agency did you use?
I've used QuestGroup, TekSystems, and Talener
Wouldn’t be concerned about the conversion fee the company pays to the agency that placed you. If you think your hourly pay rate is less than the annual salary equivalent you think you should be making, do your research and when the time comes for you to convert to full time, have your data ready. Kick ass during your contract to further justify a higher annual when the time comes. Here’s a handy calc you can use to get to the right salary you want. https://www.adp.com/tools-and-resources/calculators-and-tools/payroll-calculators/salary-paycheck-calculator.aspx
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That’s sort of how contracting works. Company pays an hourly rate to the recruiting firm and out of that the firm pays the contractor. For perm it should work how you described it.
If that is the case, what should I expect for my full time salary if I convert from contract? My previous hourly rate + the fee that the company pays the agency? Somewhere in between?