
Issue No 115		12 October 2001

LaborNET	Ask Neale	Tool of the Week

Workplace

The Enemy Within

In the IT industry it's the recruiters who are earning the workers' ire, as our special correspondent explains.

Recruiters Unaccountable

Recruitment agencies derive substantial profits from the efforts of IT workers and exert a considerable impact on their lives and careers, yet insist on not revealing their commissions, often display poor understanding of skills and are not accountable.

Unlike other industries where sophisticated sales-driven organisations interact with members of the public in transactions involving substantial sums of money, such as real estate and car sales, the recruiting industry is subject to no regulatory overview or required minimum standards of conduct.

Further, when challenged on these issues, the recruiting industry has the gall to dismiss workers as irrelevant third parties. For example, the recruiters' lobby group, ITCRA, is quoted in the Sydney Morning Herald as saying: "The margin paid to an agency is the fee for service paid by the client. It is a business arrangement between them and has nothing to do with a third party." http://it.mycareer.com.au/recruitment/20000307/A58136-2000Mar6.html

The fact is that IT jobs would exist whether there were recruiters or not. Recruiters earn their income by maintaining control of job vacancies on the one hand, and job candidates on the other.

IT Workers believes it's time for full disclosure in the recruitment industry, and for an externally monitored code of ethics fairly representing the interests of all parties. The ITCRA's current code of conduct is mostly oriented towards the interests of employers, and is not subject to independent scrutiny.

Recruiters generally refuse to disclose their margin on contracts because the margin is sometimes substantial and in all cases is higher than the contractor would probably accept as reasonable, if it was negotiated openly. Even the smallest common margin of 20 percent can deliver recruiters around $24,000 for a 6-month contract, which is excessive given the amount of work and expertise involved.

Margins up to $100 per hour are not unknown, which usually means the recruiter is being paid more than the worker.

How Recruiting Works

In dealing with recrutiers, it is important to know what type of job you want, and what your skills are worth in the market. Contractors generally believe that recruiters try to obtain the highest possible rate of pay for them, because it gives them a higher commission.

In fact, the opposite can be true, for two reasons. Firstly, recruiters are more likely to win business from employers if their candidates are cheaper, provided they are also capable. Some recruiters market their ability to find low-cost staff.

Secondly, some contracts involve a fixed payment to the recruiter, out of which the recruiter pays the contractor. Obviously, lower rates for the candidate translate to a higher profit for the recruiter.

Resist inappropriate offers

Recruiters aim to fill positions, not to help contractors' careers. This can result in candidates being talked into accepting unsuitable or dead-end positions that they would not otherwise consider. Therefore, always think twice before accepting unattractive job offers.

Fair termination

At least one recruiter markets the fact that the employer can terminate contractors at any time, without consequences. Yet the same recruiter requires that contractors give four weeks notice if they wish to change a contract. Reasonable notification on either side is fair. Insist on this in contracts.

Useful sites

Unethical recruiting - discussion at Software Contractors Guild - http://www.scguild.org/B1.html

Janet Ruhl's Real Rates site - http://www.realrates.com

NetSlaves - http://www.netslaves.com

ACS Contractors SIG - http://203.147.217.77/ACS/chapter_sigs/consultants.htm

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  Issue 115 contents

Interview: Connecting the State
NSW IT minister Kim Yeadon is the man responsible for enabling the people of NSW. Here's how he's doing it.

Workplace: The Enemy Within
In the IT industry it's the recruiters who are earning the workers' ire, as our special correspondent explains.

Unions: From the Virtual Coalface
Computer programmer Vince Caughley argues there is a place for unions in the IT industry.

History: Conditions Precedent
Frank Bongiorno writes that the recent events off the coast of Christmas Island recall a story once told by Paul Hasluck.

International: Victims of Terrorism
Repression against trade unionists on the increase world wide, with 209 trade unionists assassinated last year, reveals ICFTU 2001 Survey.

Campaign Diary: Week One: Get Shorty
Labor's first week of campaigning was as an effort to gain attention from a nation rocked by the telvised war on terrorism.

Economics: Global Alliances
Ray Marcelo reports from India that the ILO is arguing that globalisation needs a worker and employer alliance.

Health: The Phantom Menace
Trade unions made an impact this week at an international congress In Melbourne in the global fight against AIDS.

Review: Rings of Confidence
In his study on the 2000 Olympics, Tony Webb argues that the government and unions reached a new level of cooperation.

Satire: Greens 'Quietly Unconfident' of Forming Government
A leaked memo from a senior member of the Greens reveals the party is unconfident of winning government on November 10.

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