What are contract recruitment agents?
A big part of any contractor’s life is spent searching for and securing new contracts. Sometimes, this is a stressful process. But sometimes, it can be easy. It all depends on your connections, how much you network and whether you have your ear to the ground when it comes to businesses in your sector.
But there are other routes available for contractors to explore when it comes to finding and securing work. Read on as we discuss whether contract recruitment agents are a good option…
Agencies can be key in quickly securing your next job. They take care of the leg work for you by finding openings and getting all of the relevant information. This can include rates and job responsibilities. But, as with any service, they will have fees.
So how do you know if they’re right for you?
Benefits of recruitment agents
A majority of contractors will go to agencies for work because contract recruitment agents will have contacts with larger clients. They’ll also be able to provide payment if the client fails to pay on time. This is a huge benefit as it ensures contractors don’t need to worry about when, or even if, their next payment will come through.
Many contractors also find it easier to negotiate payment terms with agencies rather than directly with clients as it can be less daunting. In addition, the overall process is a lot simpler. In many cases, all you have to do is share your CV on a few sites and the agency will come to you. They’ll then arrange interviews and quickly draft up an agreement for you to begin work.
With so much experience behind them, agents will potentially be able to secure contracts faster than a contractor could themselves. This would be extremely beneficial for those urgently requiring work, even if it’s just for a short period.
Problems with recruitment agents
Unfortunately, there are cons to working with agents. They typically mark up your rate by anything between 12% and 20%, meaning clients are paying more money than you’ll receive. If you cut an agency out of the relationship, you could have the potential to see a significant increase in your take-home pay.
So, to ensure your overall pay isn’t negatively affected by agency commission rates, be aware of the market rate. This will give you a good standing point for negotiations and help you ensure that you earn what you deserve rather than a reduced amount to accommodate a third party.
Many agents also have policies in place that contractors must adhere to. This can include not working directly with an agency sourced client for anywhere between 6 and 12 months after the end of the contract. This could negatively impact your working relationship and prevent any future collaborations.
On top of this, some contractors report that finding and securing their own work is much more gratifying. In this scenario, contractors have the potential to find more niche positions. They can also negotiate specific details in line with their personal preferences rather than following agency policy.
Alternative contract securing options
While networking can be exciting and securing contracts off your own back can be immensely satisfying, it can be hard work too. For those who still need to develop industry connections, ongoing cold calling can be bleak. In addition to this, not knowing when the next contract will come through can be worrying.
So, choosing a contract recruitment agent is an ideal choice for those just starting, or for those who aren’t completely comfortable with direct negotiations. But there are other options out there to make life easier for contractors. One such option is an umbrella company.
What is an umbrella company?
An umbrella company will act as a go-between for you and your client. They can take care of your tax, chase payments and look after payroll. By using an umbrella company, you’ll also be considered an employee, meaning your position in relation to IR35 is clear.
Can you use an umbrella company instead of an agency?
An umbrella company won’t find you work, but they can cover some of the benefits of working with contract recruitment agents.
Many contractors choose to work with a contract recruitment agency purely because it’s easy. But where an agency will take care of invoices to ensure you receive monthly payment on time, an umbrella company can do exactly the same. They’ll chase up any outstanding invoices to ensure clients pay on time.
When you are paid, you’ll receive a payslip with tax and national insurance deductions already made. And, since you’re an employee, you’ll receive employee benefits. All umbrella companies are now legally obliged to offer statutory benefits like sick pay, paid leave and a pension scheme.
They will cost a small fee, but the benefits are plentiful. This makes umbrella companies the perfect option for those who choose agencies purely for ease. This is because it can provide the benefits whilst giving room for contractors to pitch and secure their own contracts.
Can you use both an umbrella company and an agency?
For those who enjoy the perks of umbrella companies, you don’t have to miss out on the chance to work with an agency. While many agencies do have supplier relationships with the larger schemes, you can still work with any umbrella company whilst you complete your contract.
In this scenario, your chosen umbrella company will simply invoice the agency instead of the client. Everything else will work the same way too.
