Tuesday, January 19, 2010

The Staffing Agency Milking Continues

An early blog post of mine was about staffing agencies milking people. Here's the basic staffing agency model:

Step 1. Charge client as much as possible. Let's call it X.
Step 2. Pay contractor as little as possible. Let's call it Y.
Step 3. Make money doing basically nothing and keep X minus Y.

A friend asked me today how much X minus Y should be. My answer was "enough to make it worth it for you and the client." I can't tell you how much X minus Y should be, but I think if you are paying the consultant about what they'd make on their own, X can be as big as the staffing agency can get.

Example of good staffing agency: Consultant charges $70/hour working independently. Staffing agency charges client X and pays consultant $70/hour. I really don't see a problem with X being $110 or $310, as long as the consultant is happy and more or less knows what's going on.

Example of bad staffing agency: Consultant charges $70/hour working independently. Staffing Agency charges client $100/hour, tells consultant they are charging client $70/hour, and then gets consultant to begrudgingly work for $50/hour. This is VERY common, and why most people hate staffing agencies. Check out this audio blog post on the subject from tech blogger Adria Richards.

2 comments:

  1. I do not think you have the grasp of staffing if you have it boiled down to this simple of an equation. Most people don't "hate" staffing. It sounds like you had a bad experience at some point however that is no reason to sling crap at a billion dollar a year industry.

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