How to negotiate temporary staffing rates with confidence

You have every right to check you’re getting the best possible deal from your recruitment agency, and it’s something we recommend you do. If you were buying a new car you would shop around to find the best price, interest rate and terms and conditions for you. The same is true for the supply of temporary and fixed term staff, and these tips will help you negotiate temporary staffing rates with confidence.

You might feel that you don’t have the time to negotiate the best deal for urgent bookings. That’s why we recommend planning ahead and agreeing rates with agencies in advance. You won’t need to negotiate every time you require a temporary worker, as the agreed rates will be set until you next review them with your agency(ies). You will also achieve long-term cost savings and time management benefits, and know you are getting a good deal no matter how last minute a booking is. 

Preparation is the key to success

Know your numbers

Make sure you know your starting position:

• how much do you spend on temporary and fixed term staff each year?
• which agencies do you use?
• what daily charge and mark-up rates do you currently pay?

You might find it useful to read our article on agency mark-up rates and the impact on worker pay. 

Are there other organisations you could partner with? By combining your spend with other organisations you will have a higher overall spend and greater negotiating power.

Determine your bargaining range

• what’s the optimum daily charge and mark-up rates you would like to pay for the various roles you typically need to fill?
• what’s the highest daily charge and mark-up rates you are willing to pay?

This will show you the range within which you should negotiate.

If you are not sure, speak to your peers and find out what they are paying, This will help you gauge what rates are reasonable.

Communication

• arrange a meeting with each agency you use to discuss:
  • agency performance – have you received a satisfactory service from them?
  • spend – set out what your anticipated future spend is likely to be
  • challenges – do you need to reduce unproductive time by limiting the number of agencies you work with?
• discussing these issues will help incentivise the agencies to retain your business rather than lose you to a competitor – and it often leads to more attractive rates being offered
• work out a mark-up rate which is acceptable to you and the agency
• if the agency is unable to meet your requirements do not be afraid to walk away
• remember that this should not be a confrontational conversation: clarity and communication are key

It’s also worth remembering that, as the mark-up rates under the CCS frameworks are maximum rates. Suppliers will expect you to negotiate. You can direct award to a supplier under the Non Clinical Temporary and Fixed Term Staff framework and negotiate with them directly. However, we recommend that you run a further competition as the best way to negotiate with suppliers and ensure you get a great deal. 

Dispelling common myths

The benefits of negotiation are not worth my time and effort

It is not a waste of effort to save money (and time in the long run). It’s true that the initial process of getting a better deal needs an upfront investment of time, however, the result will be a fair price for every worker, no matter how last minute. Peace of mind and controlled costs are worth the time spent negotiating with an agency.

If I try to renegotiate with my agencies our good relationship will be affected

Negotiation is common practice in the recruitment market and can generate positive outcomes for all parties. It should not be a process that adversely affects professional relationships. Most agencies will respect your need to get a good deal, enabling you to spend your already strained budgets on other vital resources.

I have to sign the agency’s terms and conditions

By choosing a CCS framework, such as Non Clinical Temporary and Fixed Term Staff, agencies will use the CCS framework terms and conditions. These are written with your best interests, as the customer, in mind. They also give you have peace of mind that agencies are adhering to the relevant employment check standards.

My agencies have exclusivity over workers

It is rare for an agency to have exclusivity over a worker. Most workers actually sign up with several agencies, which creates competition in the market. If you are able to offer more competitive pay (through negotiation on agency mark-up), workers are more likely to be attracted to your vacancy.

I can’t avoid temp to perm fees

Agencies can charge transfer fees to protect their legitimate business interests via temp to perm fees. Agencies must, however, provide you with the option of an extended period of hire or a transfer fee. This is set out in the Conduct of Employment Agencies and Employment Business Regulations 2003. Temp to perm fees can be avoided with the Non Clinical Temporary and Fixed Term Staff framework, when a worker has been in post for 8 weeks or longer provided 4 weeks’ notice is given to the agency.

A higher charge rate means the worker gets higher pay

Not necessarily. If you are paying a higher mark-up, this could actually diminish the worker’s pay. If you pay a lower charge rate with a lower mark-up, the worker can still receive more than if you were paying a higher charge rate with a higher mark-up. Read our article on agency mark-up rates and the impact on worker pay to learn more.

I am not entitled to know what the mark-up rate is

You are entitled to know the mark-up rate you are being charged, subject to general data protection regulations. This information is not commercially sensitive when shared between the agency and their customer – which in this case is you. In fact, agencies on the Non Clinical Temporary and Fixed Term Staff framework are required to break this out for customers to ensure it is clear. 

We’re here to help

Find out more about how the CCS workforce team can help you get a great deal on all your temporary recruitment needs:

• visit our workforce web page
• email info@crowncommercial.gov.uk
• call 0345 410 2222