Questions Independent Recruiters Need to Ask Before Placing Their First Contract, Pt. 2

Questions Independent Recruiters Need to Ask Before Placing Their First Contract, Pt. 2

Make sure you’ve read Part 1 before continuing on for more questions independent recruiters should ask before they place their first contract worker!


5. What Paperwork Do I Need?

Offering contract placement services now means going above and beyond an employment contract. You’ll require a master service agreement for clients, IC agreements, employee training and sign offs on policies, and more. You need to ensure you’re compliant and protected.

6. How Do I Price These Services?

Business Man WritingYou likely have standard prices for permanent placements, particularly if you’re frequently placing the same type of position. One consideration you’ll need to factor in before you start filling contract roles is how you’ll price these new services. Not only will you need to charge for your time and expertise as a recruiter, but you’ll also need to factor in many other costs, such as the worker’s hourly rate, which is known as the pay rate. This cost will go directly to paying the employee you’ve placed.

Further, other costs will go into the markup rate. Besides the cost of your time and service, you should charge for skills testing, background screening, and the other costs of recruitment you incur. Also included in the markup rate will be the cost of due diligence and legislative compliance, as well as government burdens. Together, the pay rate and the markup rate is known as the bill rate, which is what you charge clients for your services.

7. What if the Client Wants to Hire the Contractor?

It’s a common occurrence in contract staffing: your client is so pleased with the contractor’s services that they want to hire them on permanently. What do you do in this scenario? First, such instances should be accounted for in both your employee and client contracts. You should outline what all parties must do in such a situation, as well as your fee for facilitating the process.

8. Can I Handle This On My Own?

Perhaps the most crucial question you’ll need to ask yourself is if you can handle taking on the contract-recruiting process solo. Unlike with direct-hire, contract recruiting requires you to be the employer of record (EOR)—meaning you have to have enough working capital to guarantee payroll, be responsible for providing benefits, handle necessary tax forms, obtain insurance, and much more.

The idea of having to ensure proper compliance and timely pay can prove very burdensome and costly if you choose to serve as the EOR, and is a big reason many recruiters choose not to go forth with contract recruiting. Luckily, you don’t have to go through the process alone! Choosing a back-office services provider that can serve as the EOR, provide you with access to working capital, and handle all of the administrative burdens that come with placing contract ensures you’re taken care of. These organizations make it possible to reap the rewards that come with placing contract (making more money, growing your business, ensuring amazing customer service, etc.), while saving you the grief that comes with back-office duties.

These are eight of the most common questions independent recruiters have when determining whether they should switch to offering contract-staffing services. These questions and many more can be answered more in-depth by a back-office service provider. Not only will the provider’s experts help guide you through your first contract placement, but they can also take on the burdens of compliance, payroll, human resources, and more, so you can focus on recruitment, rather than stress about logistics.