IT Contract Head Hunter Rates

[SilverGS]

For all those people who are on contracts through recruitment firms like Finney-Taylor, SI Systems, Computer Horizons and what not. What is the rate you pay to those companies? Is it a percentage or flat rate?

Just trying to get a feel for what most contractors are paying their pimps and what a fair rate should be.

[Xtrema]

Depending on the duration, complexity and rate of the gig.

I've seen as low as $15/hr to a rip off of 50%.

Or if you are not going hourly, they may just a monthly chunk off your pay check.

Or if you they hook you up with a staff position, they may just charge the employer.

Just a warning, I would avoid any head hunters who want to charge a fee up front.

[SilverGS]

You would consider $15/hr low? If you are only making $30-40 that is sitting at 27-33% which I still think is high.

When I called some of these companies they said that they usually are in the 17-20% range. I am asking this question to see what people are actually paying compared to what the companies told me

[lint]

depends on whether you find the job through them, or are using them for insurance as a flow through (ie find your own contact gig, but need insurance). Flow through at SI is $3/hr.

[SilverGS]

I called SI they said their flow through is $5/hr

I am thinking for along the lines where SI finds the job for you. They told me they average 22%

[Xtrema]

Originally posted by SilverGS
You would consider $15/hr low? If you are only making $30-40 that is sitting at 27-33% which I still think is high.

When I called some of these companies they said that they usually are in the 17-20% range. I am asking this question to see what people are actually paying compared to what the companies told me

Yeah I would assume $15 off $40 is a lot. But I have not seen or dealt with any contracts less than $60/hr. So I guess that is 25% and down.

[benyl]

Originally posted by SilverGS
I called SI they said their flow through is $5/hr

I am thinking for along the lines where SI finds the job for you. They told me they average 22%

Flow through rates for SI are dependent on the size of the client.

For instance, I know that SI does flow through of $5 for TransAlta (small company). For EnCana and other big companies, $3 is the norm.

[SilverGS]

Originally posted by Xtrema


Yeah I would assume $15 off $40 is a lot. But I have not seen or dealt with any contracts less than $60/hr. So I guess that is 25% and down.

Heh heh.. Yes of course the size of the contract makes a difference which is why I thought most rates are in % and not a flat rate.

A second question is if you say continue on with a second contract term is there a discount involved since the second time around there isn't much to do since they already know who they want. So lets say you pay 25% (I.E. Company pays $60 where SI Systems gets $15 of it) then say come the next year SI gets 20% (I.E. $60 where SI gets $12/hr given the company pays the same rate)

[Mikaldor]

Being in the biz the rates are pretty typical for IT headhunters.

15 - 25% markup if we find you the gig. - typically charged to the client hidden in the bill rate.
$3 - 7/hr flow-through if we are just payrolling, depending upon the size of the client. - Can be charged to candidate or client depending upon the set up.

If we find you a perm job, we charge the client only.

BTW, it is illegal in Canada for any Headhunter, staffing agency etc to charge ANY upfront fees to candidates.

[dr_jared88]

I just finished a 2 week quick contract with TES at $18/hr in Regina. So in alberta currency that would be about $20ish haha

[Toms-SC]

What exactly do these head hunter groups provide for their 'flow through'? I was employed as a contractor for a gig I found myself and the only thing I could think of is legal extortion?

[sputnik]

My flow through provides me with liability insurance.

The company that I work for also uses my flow through so that they can deal with one company for all of their contract renewals and not have to have a million different contracts for each individual contractor.

At the end of the day they pay the extra $3/hr and I negotiate my rate based on that.

[bigbadboss101]

In my situation, the "middle man" take about 35% of what the O&G firm pays them. 65/35 split. Some people get 60% or less. And some might possible get closer to 70%. Need to change that next time around.

[Subwoofah]

Originally posted by bigbadboss101
The "middle man" take about 35% of what the O&G firm pays them. 65/35 split. Some people get 60% or less. And some might possible get closer to 70%. Need to change that next time around.

Is that the same for every O&G worker? How much do land permit-ers charge O&G firms?

[Mikaldor]

Originally posted by Toms-SC
What exactly do these head hunter groups provide for their 'flow through'? I was employed as a contractor for a gig I found myself and the only thing I could think of is legal extortion?

Usually, and this varies based upon the agency, provides the following for both flow through and contract engagements:

1. General Liability insurance - up to $2M per incident
2. Professional liability insurance - up to $2M per incident
3. Workers Compensation Insurance
4. Tax protection - CRA doesn't look very closely at agency contractors, where they do look at direct contractors for employment tax.
5. Predictable cash flow - they pay you in 15 - 30 days whereas the client can take 60/90 or 120 days to pay them

A good agency will also act as your agent, working with the client for any issues, rate negotiations, extensions etc and may offer perks to you as a contractor that you may not be aware of: Tax planning sessions, health benefits options.

[SilverGS]

Originally posted by Mikaldor


A good agency will also act as your agent, working with the client for any issues, rate negotiations, extensions etc and may offer perks to you as a contractor that you may not be aware of: Tax planning sessions, health benefits options.

Do you know of any agencies that have such offerings? If more recruiters did this then at least it would help justify their rates sometimes.

Sure when they first get you the job they deserve compensation but lets say the company renews you a few times because they like you and you do good work and what not. After a while that 20-30% seems a bit steep.

Anyone heard of discounts the second or third year of a contract or do you just keep on paying $15-$30/hr or 20%-30%?

[SilverGS]

Originally posted by bigbadboss101
In my situation, the "middle man" take about 35% of what the O&G firm pays them. 65/35 split. Some people get 60% or less. And some might possible get closer to 70%. Need to change that next time around.

The question is are you getting what you asked for and they found a company that will pay your rate plus whatever cut they ask for. Is so then I suppose it doesn't matter what % they get.

However, if you are not getting your asking rate and they are taking a large % then I would feel gipped.

[Toms-SC]

I still feel mega-gipped. I'm personally suggesting to my classmates not to take a gig that requires a contract head-hunter group.

"1. General Liability insurance - up to $2M per incident
2. Professional liability insurance - up to $2M per incident
3. Workers Compensation Insurance
4. Tax protection - CRA doesn't look very closely at agency contractors, where they do look at direct contractors for employment tax.
5. Predictable cash flow - they pay you in 15 - 30 days whereas the client can take 60/90 or 120 days to pay them
"

Are all pretty crappy reasons to see 15%-30% of my pay skimmed.

[sputnik]

Originally posted by Toms-SC
I still feel mega-gipped. I'm personally suggesting to my classmates not to take a gig that requires a contract head-hunter group.

"1. General Liability insurance - up to $2M per incident
2. Professional liability insurance - up to $2M per incident
3. Workers Compensation Insurance
4. Tax protection - CRA doesn't look very closely at agency contractors, where they do look at direct contractors for employment tax.
5. Predictable cash flow - they pay you in 15 - 30 days whereas the client can take 60/90 or 120 days to pay them
"

Are all pretty crappy reasons to see 15%-30% of my pay skimmed.

They arent skimming your pay. They are billing you out at more than you agreed to.

There is a difference. If I went to my $50,000 job and saw a 30% deduction I would be pissed. However in this case you go to your $50,000 job, make $50,000 and your employer pays the head hunter $15,000 on top of that for finding you.

If you want to make X amount of money then negotiate it for X and be happy.

[SilverGS]

Originally posted by Toms-SC
I still feel mega-gipped. I'm personally suggesting to my classmates not to take a gig that requires a contract head-hunter group.

"1. General Liability insurance - up to $2M per incident
2. Professional liability insurance - up to $2M per incident
3. Workers Compensation Insurance
4. Tax protection - CRA doesn't look very closely at agency contractors, where they do look at direct contractors for employment tax.
5. Predictable cash flow - they pay you in 15 - 30 days whereas the client can take 60/90 or 120 days to pay them
"

Are all pretty crappy reasons to see 15%-30% of my pay skimmed.

Oh I agree. I think the rates are very high considering. However, if the head hunter helps negotiate to get you as much as possible, helps find you other contracts if you don't want to continue your current one, and maybe a few nice benefits here or there then at least they are attempting to make it worth the rate and are working for you.

My current one is seemingly working against me and does none of those things

[Toms-SC]

Originally posted by SilverGS


Oh I agree. I think the rates are very high considering. However, if the head hunter helps negotiate to get you as much as possible, helps find you other contracts if you don't want to continue your current one, and maybe a few nice benefits here or there then at least they are attempting to make it worth the rate and are working for you.

My current one is seemingly working against me and does none of those things

It would be a dream to have a contract group that actually worked with you. My experience is you hit a 'ceiling' and you cannot move up the corporate ladder until your out of the contract group. Does your group start with a C and end with a gen?

[SilverGS]

Originally posted by Toms-SC


It would be a dream to have a contract group that actually worked with you. My experience is you hit a 'ceiling' and you cannot move up the corporate ladder until your out of the contract group. Does your group start with a C and end with a gen?

nah through a small guy not even worth mentioning

[bigbadboss101]

Well, my rate of pay is pretty good. With that said, the middle man gets about 38%. That means Oil company pays middle man X, and I get .62X. The .62X is pretty good amount, but I will be looking to change that to .70x-.75x.

[SilverGS]

Originally posted by bigbadboss101
Well, my rate of pay is pretty good. With that said, the middle man gets about 38%. That means Oil company pays middle man X, and I get .62X. The .62X is pretty good amount, but I will be looking to change that to .70x-.75x.

Is this your first year with this contract?