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Unreasonably high margins are the exception, not the rule

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08 Jul 2015

Sellick Partnership have recently been successful inachieving our official place as a supplier on the Crown Commercial ServiceFramework for Non-Medical, Non-Clinical Temporary and Fixed Term Staff with animpressive score of 99.97 out of 100 for corporate services recruitment.

My last blog was in response to Jeremy Hunt's tirade againstrecruitment agencies who supply to the NHS and I felt it necessary to addresssome of the points raised by the people who read it.

There seems to be strong argument that the discrepanciesacross charged rates are a result of the directors of finance and hiring managers being unaware of what rules apply, what frameworks are in place and onthe whole, how to use these frameworks. With the release of the new CrownCommercial Framework this month I thought it as good a time as any to outlinewhat the framework actually means to candidates and clients alike and discusshow such frameworks are sometimes exploited by certain suppliers on the market.

Education is a strong factor; hiring managers have as muchresponsibility as agencies for keeping up to speed with regulations relating tocharge out rates. There is an argument that agencies who offer a rate range intheir job adverts are doing so to create a larger margin for themselves, this Iby no means the case. When a consultant takes an initial job specification, it issometimes very difficult to pin-point what a client is actually prepared to payand with the interim market the rates dictated by the banding is usually considerably lower than what that interimworker would be prepared to work for.

It's our job to advise the client that they may not besuccessful in securing a candidate with the anticipated skill set and the ratesquoted by the CCS framework. It's called managing expectations - the clientwants a certain candidate and we (led by the market) advise what they should bewilling to pay. Of course we will always aim to find candidates at the ratesquoted for this specific banding but the majority of the time have to quoterates at a higher banding to attract the candidates required.

NHS expenditure on temporary resource supplied via any ofthe framework agreements in place is protected in terms of the margin that therecruitment firm is able to charge. The Association of Professional Staffing Companies (APSCo) made a valid point that all hiring managers and critics of agencies should be aware of in that the recruitmentcompany's margin is a small percentage of the overall cost of each temporaryworker. The vast majority of the cost to the NHS (bar the 14 percent averagerecruitment firm margin, and employment taxes and inclusive of NationalInsurance) goes directly to the worker.

Sellick Partnership stand in line with APSCo and would agree that thereare a minority of rogue suppliers that charge unreasonably high margins andtake advantage of the critical need of their NHS clients. However, on the flip side,it is clearly in a client's best interests that they make themselves aware ofthe procurement in place in order to arm themselves against overly expensive,none-compliant agencies.

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