IT recruitment agency margins falling


IT recruitment agency margins falling

The average monthly margin charged by IT staffing agencies has declined by three per cent since June, according to figures released recently by CashFriday.

The company, which provides payroll and administration support services to primarily new start agencies in the recruitment industry, says the average gross margin for staffing companies in the IT sector during October was 18.5 per cent, compared to 21.5 per cent in June.

The figure is one higher than September's result of 17.5 per cent, notes CashFriday, but is almost two per cent less than the sector's result for August (20.2 per cent).

As a whole, the recruitment industry registered a margin of 25.3 per cent during October - it's highest figure since June (24.4 per cent).

According to the company's managing director, Tom Atkinson, CashFriday bases its monthly margin index on an evaluation of a "basket" of its clients, looking at their actual invoice values and the cost of temps (gross play plus employers NI) to determine an approximate gross margin for the industry. While the company will not reveal who its clients are or how they operate in the IT industry, it does say it works with a sufficient number of agencies nationwide to provide a reliable statistical analysis.

CashFriday was established in 1994 as Eurolead Services.

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