Unveiling the Secrets of Staffing Agencies

Introduction

The staffing industry is vast, with over 160,000 recruiters in the US earning an average salary of around $80,000. Astonishingly, they've collectively earned $12.9 billion. Yet, the total revenue for the entire US recruiting industry in 2022 was a staggering $220 billion. Where does the remaining $208 billion go? It's dispersed among management, C-level executives, and shareholders. This status quo is ripe for disruption, and Youlivity is here to revolutionize the landscape.

How Do Staffing Agencies Make Money?

Delving into the economics of staffing agencies reveals a multifaceted revenue generation model:

• Service Fees: The primary source of income is client fees, calculated as a percentage of the candidate's first-year salary.
• Consulting markups: Agencies may payroll hourly employees, with businesses paying a premium on top of the candidate's pay rate.

How Do Recruiters Get Paid?

Recruiters, the driving force behind staffing agencies, earn their livelihood through various channels:

• Commission-Based Structure: Operating on a commission model, recruiters earn a percentage of fees generated from successful placements, motivating them to bring in high-quality candidates. Generally, they earn between 5-10% of the fee.
• Base Salary with Bonuses: Some recruiters receive a base salary alongside performance-based bonuses, providing stability with additional incentives.

Pros and Cons of External Recruiters

Pros:

• Expertise and Specialization: External recruiters offer deep industry knowledge and quickly find candidates with specific skill sets.
• Time and Resource Savings: Businesses can focus on core activities while recruiters handle the time-consuming tasks of sourcing, screening, and interviewing candidates.
• Access to a Larger Talent Pool: External recruiters have extensive networks, providing access to a broader range of qualified candidates.

Cons:

• Cost: Engaging external recruiters can be expensive due to fees and markups.
• Lack of Company Knowledge: External recruiters may not fully understand company culture, potentially leading to mismatches in candidate selection.
• Limited Control: Businesses have less control over the recruitment process when relying on external recruiters.

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Administrative Recruiting Costs

Beyond fees, staffing agencies incur administrative costs, including:

• Advertising and Marketing: Costs associated with promoting job openings and attracting candidates.
• Technology and Tools: Investments in recruitment software, applicant tracking systems, and other technological solutions.
• Employee Salaries and taxes: Recruiter salaries and benefits contribute to overall administrative costs.

Youlivity's Disruptive Approach

The traditional recruiting industry is a massive $220 billion sector, yet a significant portion goes to management, executives, and shareholders. Youlivity enters the scene to disrupt this norm, offering a transparent, collaborative, and cost-effective alternative.

With Youlivity, we empower you to select a fee that you think is fair and that our recruiter marketplace agrees with.  With a substantially larger percentage directed straight into the pockets of recruiters, this Youlivity approach redefines the rules of the outdated legacy recruiting industry, ensuring a win-win for all stakeholders.

In conclusion, understanding how staffing agencies make money and the associated costs provides businesses with insights into whether external recruiters align with their hiring needs. Youlivity stands as a beacon of innovation in the recruitment landscape, challenging the conventional and championing a fair, efficient, and forward-thinking approach. Contact us today to learn more.