6th September 2005, 10:18 PM
Troll,
I see the real figures for both sides on a daily basis, and you are wrong about the money - the lion's share always goes to the contracting unit. For information only, here is how it usually works (in my experience of 12 years in consultancy for 2 companies):
On a typical project, the consultancy company will get paid a time-charge for the staff involved, on which there will be a profit of between 4% and 15% (lower figures for bigger clients that keep coming back).
When the work involves recruiting a contracting unit, we usually arrange for the client to employ the unit directly. We then just get our usual time-charge.
Some clients want us to employ the unit ourselves. In those cases, we usually have a mark-up (generally about 4%) on the contractor's fees. That mark-up reflects the fact that we take a large financial risk, usually having to pay a contractor before we get paid ourselves, when the contractor's fee is usually at least 10 times ours. It also reflects increased insurance costs.
I repeat, however, that we would prefer the client to employ the contractor than to do it ourselves, despite the mark-up.
1man1desk
I see the real figures for both sides on a daily basis, and you are wrong about the money - the lion's share always goes to the contracting unit. For information only, here is how it usually works (in my experience of 12 years in consultancy for 2 companies):
On a typical project, the consultancy company will get paid a time-charge for the staff involved, on which there will be a profit of between 4% and 15% (lower figures for bigger clients that keep coming back).
When the work involves recruiting a contracting unit, we usually arrange for the client to employ the unit directly. We then just get our usual time-charge.
Some clients want us to employ the unit ourselves. In those cases, we usually have a mark-up (generally about 4%) on the contractor's fees. That mark-up reflects the fact that we take a large financial risk, usually having to pay a contractor before we get paid ourselves, when the contractor's fee is usually at least 10 times ours. It also reflects increased insurance costs.
I repeat, however, that we would prefer the client to employ the contractor than to do it ourselves, despite the mark-up.
1man1desk