Our rates and payments are uncommonly transparent
Under a headline Agreement, we will pre-agree rates with you, including the contractor rate. Will your contactor know just how much Xperian is paid by you? Absolutely!
Why? Many contractors have first-hand experience of agents reducing contactor payments and skimming more of the fee for themselves. We want contractors to start work, stay in work and enjoy their work. Once in post, our commitment is to pay them fairly, accurately and on time.
A key concern when agreeing rates is to choose a margin or mark-up relationship, because calculation methods are different and mistakes made here can be costly over time.
Mark-up vs Margin
Mark-up and margin are the two main forms of calculation used to determine fee allocations to both the contactors and the agent. The difference in the calculation methods can be the cause of much confusion.
Doing the maths
The best way to understand the difference between the mark-up and margin method of calculating rates is by working through some examples.
Starting with the contractor daily fee, mark-up is the percentage applied to that fee to calculate the total daily fee payable to the recruitment company.
By way of example, if the contractor fee is £100 per day and the recruitment company mark-up is 15%:
Contractor fee: £100
Agent mark-up: £15 [Mark-up rate of 15% x Contractor rate of £100]
Total daily fee: £115 [Contactor rate of £100 + Agent mark-up of £15]
Starting with the total of the contractor fee plus the agent fee, margin is the percentage of that total fee that is paid to the recruitment company.
By way of example, let’s use the total of £115 from the earlier mark-up calculation, but now use a margin rate of 15% to calculate the Agent margin and the Contractor fee:
Total fee: £115
Agent margin: £17.25 [Margin of 15% x total fee of £115]
Contractor fee: £97.50 [Total rate of £115 – agent margin of £17.25]
If you are confused, you’re in good company.
- mark-up starts with the contractor fee
- margin starts with the total fee
A margin relationship will cost you more money for each pound spent on the contractor, than a mark-up relationship of the same rate. Be sure to stipulate with your agent which method is being used at the time you agree terms.
If you prefer that we work with your budget for the total rate, including the contactor and agent portions, Xperian will agree a margin rate for the calculation of our fees. The rate will vary between 15% and 20% depending upon rate variation factors.
If you prefer to specify rates as those you wish to pay contractors, Xperian will agree a mark-up rate with you to calculate our fees. The rate will vary between 17.5% and 22.5% depending upon rate variation factors.
Rates vary according to the terms agreed between us and take account of factors such as:
- The total volume of business generated by the relationship
- Payment terms and any resulting credit line Xperian must support
- Any increments or changes to insurance requirements Xperian must support
- The level of supplier checking required (regulated, non-regulated etc.)
- The general speed of turnaround required for new contractors
- Level of exclusivity in supporting the relationship
For those companies with a greater volume of contract hires, please ask us about further rate flexibility.