Avoid High Temp Agency Mark-ups!
The problem with a traditional temp agency is that there is a very high overhead in managing the jobs. Especially relatively to the value of short-term work. A temp agency has to employ lots of people to call around to find and organise the worker. The staff have to manage contracts and all the other paperwork. Then they have to put the worker on payroll and manage their payments. This is all done manually with significant staff, admin and office costs.
High Costs & High Fees
Traditional labour agencies are especially bad for shorter-term and lower cost work. They have a large fixed overhead which has to be applied as a % mark-up on a relatively small worker payment. Because of this, tradition worker agencies may charge up to, or even over, 50%, on top of the amount the worker is paid!
What is worse is that this is hidden from the client and worker. So, the client may be paying £150 per day for the worker but the worker only gets £100 in their pocket. But no one know this apart from the temp agency who is taking the difference.
Small businesses relying on flexible short-term workers and staff will could have costs of 50% or more, when using a traditional temp or worker agency. If you are already covering your costs, that is money that is going in the agent’s pocket that you could be taking home yourself!
A cost-effective temp agency solution
When we launched Grafter, we identified this problem with temp agencies and that it was particularly bad for lower paid and shorter-term jobs. We set-out to come up with a new online temp agency model that would solve this problem.
Grafter has developed a different online ‘temp agency’ model. We use automated and online services to cut-out the need for expensive manual operations and staff. This way we can save overhead costs and pass on the saving to our customers. The lower agency costs means that the client can afford to pay the workers a bit more!
How does Grafter to it?
We do this in several ways:
- All the search for workers is done by the system not people
- The contract is online, no need for staff work
- Online services help co-ordinate the work (chat, reminders etc) not with staff
- The workers are self-employed so no payroll overhead
- All payments and invoices are made and tracked online so no overhead.
Watch out for websites which look Grafter, but it’s just a sales website with no substance. Behind the scenes are still a traditional temp agency or labour agency with lots of expensive staff. They will still be charging you a high hidden mark-up!
Small Honest Temp Agency Fees
Because of this Grafter only costs 10% charged as a platform fee. This is open and honestly shared. Both the client and worker can see what is being paid and to whom. This small 10% is required to cover our costs, including:
- Running the technology platform
- Paying the payment transaction fees
- Paying for the workers’ insurance
- Providing the customer support
Businesses that use Grafter as their temp ‘agency’ could be saving as much or more than 40% of their staff costs. Think what you could do with that extra money in your pocket!
To find out more or to start hiring with Grafter click here.