Does my recruitment agency want me paid more or less?
It depends on the type of role. On a permanent role, the agency earns a percentage of your salary, so it wants you paid more, but only up to the number that still gets you hired. On a contract role, the agency often earns the gap between the client's budget and your rate, so every euro you ask for can come out of its margin.
Which of the two you are in changes how you should read every money conversation with your recruiter.
Why does a permanent role make the agency want you paid more?
A permanent fee is a fixed percentage of your salary. The percentage is agreed when the agency becomes a supplier to that company, and in my experience it usually sits somewhere between 10 and 30%. The higher your salary, the bigger the invoice, so on paper the recruiter wants you to aim high.
But a high margin from zero is still zero. If your number scares the client, nobody gets paid at all. So a good agency recruiter keeps your interest in mind, while keeping one eye on what the client will actually sign.
There is also something the client knows that candidates often forget: the fee comes on top of your salary. When the company looks at your number, they see your salary plus the agency cut. Sometimes it is that total that makes them hesitate or start to negotiate, even when your expectation alone was fine. It is also why it matters so much which agency puts your CV forward first.
The closest comparison I know is an estate agent selling your flat. They earn more if it sells higher, but a buyer who walks away pays them nothing.
Why is it different on a contract?
On contract roles, agencies earn in one of two ways. Some take a fixed margin on every hour you bill. Others keep the difference between what the client pays and what you are paid, and in that model the larger the gap, the more rewarding it is.
That is only the surface, though. More often than not, the budgets we receive are very tight. We are willing to work on an absolute minimum margin, but then we need you to commit to the number that was given to us, because there is no room left to move either way.
When there is a consultancy in the chain, it takes its own margin too, and quite a chunk of it. Before getting angry about that, it is worth knowing what it pays for. The consultancy carries the risk and the responsibility to deliver, fix and implement for the end client, and when the project goes wrong, that is their problem, not yours.
Where does the candidate sit in all of this?
The candidate is at the bottom of the chain, no matter how you look at it. That does not mean you make the least money in it. It means every layer above you has set its number before yours is even discussed.
I have to be honest here, because I am to blame too. I have seen it often, and I have done it myself: squeezing a little more from the candidate to make a bigger margin. How many of us have accepted one euro less per hour because it sounded like nothing?
Do the maths on a full year: 1 euro × 160 hours × 12 months is 1,920 euros. On the margin side of the desk, every euro counts, and that alone is a reason to notice the euro on your side too.
Who sits in the chain above you, and what each of them is worried about, is where Not in the Room starts. There is a chapter for contractors too.
So is my agency on my side or not?
It can look brutal, and not very much in favour of recruitment. But there is another half to it. If you have a true chance of getting the job, there is nobody like a professional and hungry recruiter, who will go above and beyond to make it happen.
The incentive that makes a recruiter squeeze your rate is the same one that makes them chase the hiring manager, push for feedback and fight your corner when the offer goes for approval. They only get paid if you get hired. Whether that is worth more than applying direct is a separate question, with its own ways to fail.
Your recruiter is not on your side of the number, and not against it either. Your interests and theirs meet at the hire, not at the rate.
The person you talk to is rarely the person who decides.
Not in the Room maps who really decides: recruiters, hiring managers, panels and the approvers you never meet, and what each of them is worried about. It covers contracting too. €5.
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