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Teacher recruitment agencies rip off

Hi

My girlfriend is currently working as a supply teacher in London. She usually works through a couple of agencies.

She gets paid about £125/day. But I've heard the agencies charge the school about £250/day. I find this incredible – how can the agency justify charging the school double? Why do schools accept this?????

She also seems to pay a ridiculous amount of tax. She's paid through an offshore umbrella company. I read somewhere online that these umbrella companies are well dodgy and make the teacher pay both the employee's NI *and* the employer's NI. They also charge a "payroll fee". All of this significantly reduces her take home pay.

I work as a temporary accountant. My agent charges a margin of 15% on top of my daily rate. I just can't believe that teaching recruitment agencies charge a 100% margin!!!

Is this normal? Why do teachers and schools accept this?

Any advice would be appreciated. My girlfriend is a great teacher and I feel that she's being exploited. She wants to work as a supply teacher as we are both over from Australia and travel a lot.

Reply 1

Blou17

I contacted my agency about the umbrella company. They use an umbrella company as (apart from saving themselves a job)the company can help the teacher to offset petrol and lunch expenses again their tax. However, if you aren't earning over 10000 (i think) then there will be no tax at the end of the year anyway. I'm only very casual so I asked to go onto PAYE and my supply agency did that.

Of course supply agencies charge the school a lot more, it's annoying but they are providing the service that both sides need. If she can your girlfriend should try to approach schools directly (perhaps not the schools the agency has - I'm sure there will be a clause in her contract about that) and get the fees directly. I have done this in the past and it works very well, although the school doesn't usually pay the same rate as they'd pay an agency, although it is more than the agency pays you, if that makes sense. So directly the school would pay about 130/140 - you are therefore saving the school money not making much more yourself.

All schools and agencies and areas are different though.

Hope this is of use - you probably know more than me being an accountant.

Reply 2

Blou17

Oh, forgot to say, your gf will need to have a DBS check for that option of course, and it's worth subscribing to the update scheme so that any potential employer can access it.

And the reason that schools go through supply is that supply agencies can guarantee a body in front of the class, usually, and any school contacting people directly has to take time and effort and it's a risk if they don't turn up. However, if you build up a good relationship that shouldn't happen.

Reply 3

jamesconnor

Thanks Blou. That's useful.

I see what you mean but I just can't understand how the fee to schools can be DOUBLE the payment to the teacher. That just doesn't happen in other industries. I appreciate of course that the agency provides a valuable service but so do other recruitment companies who only charge 15% of the payment made to the accountant/lawyer/engineer.

Also, the point you made about claiming back expenses income earned through umbrella companies is correct but not the full picture. Employer's NI is approx 13% of gross income. That's a huge amount. Unless you drive a ferrari 100m each way to get to the school it's highly unlikely that you could offset that much tax. This just looks like a straight out scam to me – the agencies are pushing their tax liabilities onto the employee. It's extraordinary and just doesn't happen in any other industry that I know of.

Reply 4

moutonfou

Original post by jamesconnor

Sounds unlikely. I worked in this industry and the average margin was around 40% (and remember if a school was employing directly, some of this would go to employer's NI). The margin reflects the high volume of work which goes into getting a supply teacher 'ready to work': each teacher we sent out had to have a DBS check, strict reference checks, we had to verify their teaching qualifications, take copies of their certificates, do a health questionnaire, and interview them face to face about their suitability to work with children (this is all stipulated by the government's Safer Recruitment guidelines which all schools and those recruiting people for work in schools must adhere to). Compare this for example to IT recruitment where some recruiters may not even ever meet their candidate! They talk on the phone, get them to send over a few signed documents and their passport, and voila, job done. So the higher margins in supply recruitment reflect that the agency is saving the school a lot of intense administrative work (it's likely a school would need to employ somebody full time to administrate a basic supply scheme with all the correct paperwork, payroll, etc.)

Regarding the umbrella companies, these are useful where a teacher is working for more than one agency and doesn't want to be taxed on all of their income from the second/third agency (as HMRC will usually only apply your personal allowance to one job). Yes, you could claim this back at the end of the year, but if you are very reliant on all of your income as many supply teachers are, you may need it immediately, and taking the small hit on the Employer's NI might be worth it. That's only a 'might' however - if your girlfriend doesn't feel it's worth it she should definitely ask how she would go about changing to PAYE, and insist on a convincing explanation if they try to keep her on the umbrella scheme.

Supply agencies do serve a purpose but unfortunately their reputation does get tainted by some of the 'bad eggs' who don't just try to get their profit from their schools but from their candidates too (low rates, umbrella companies where not appropriate, etc.)

Reply 5

Broadhallian

Original post by jamesconnor

How old are you? 16?

Recruitment agencies always take a big chunk of the slice of pay no matter what industry you are working in.

They are the vital middle man that take care of the paperwork.

It is annoying that they essentially you are working while they take money off you but thats the world of work.

Teaching, factory, nursing and many other industries you get paid pretty much half of what the company actually pays the agency.

I've known this since I was 18 and working summer jobs while at university but they serve their purpose.

If you don't like it then get a full time job, or if you think they make too much money, start up your own recruiting company, I just find this topic a bit naive in the fact that you surprised about the money they make........I thought anyone over the age of 18 and experience of real time work knew this fact.

(edited 9 years ago)

Reply 6

ByronicHero

There are plenty of agencies she could join and there are few education desks that wouldn't want a decent teacher registered with them. If she doesn't like how one agency operates I would wager she could find herself a better deal at another.

Schools pay what they are willing to for the rigorous compliance checks, the on-demand service they receive and the trust they build with consultants they regularly deal with.

This said, "I heard" is never a particularly inspiring way to present a grievance as all too often you've heard wrong.

Reply 7

jamesconnor

Wow. I'm new to TSR. I didn't realise that it's a place to come to be abused for trying to raise a pretty serious issue.

"Are you 16?".... really, is that any way to engage in an adult debate?

Also, the "I've heard" challenge... why do you default to assuming that I've probably heard wrong? Why assume someone posting to this site isn't able to discern truth from fiction? Is this how you relate to the world?

"I've heard" the points raised in my original post from two experienced teachers who have had 2 recent periods of supply teaching (for personal reasons, not because they'd had to). They've been around a while and talk to other supply teachers. One was a former head of department. Both have seen 100% margins again and again. My girlfriend meets other supply teachers. They all say the same thing.

On the subject of "rigorous" checks. Surely this is junior administration work. It can all be tick-boxed. I accept that this work is required but should it be a factor in a 40% margin, let alone a 100% margin.

It would be useful to hear from a TSR member who either currently or recently worked as a supply teacher.

Reply 8

Mr M

Study Forum Helper

Original post by jamesconnor

...

I don't really understand your outrage James. If your girlfriend objects to agencies profiteering from her working on supply then she has the option to apply directly to schools for short or long term contracts or permanent positions.

Reply 9

Juichiro

Original post by jamesconnor

Wow. I'm new to TSR. I didn't realise that it's a place to come to be abused for trying to raise a pretty serious issue.

Welcome to TSR.

Reply 10

moutonfou

Original post by jamesconnor

Indeed this should be a place for respectful debate, not rudeness, and I hope my post was not rude. I'm not doubting that there may be an agency who (probably through unscrupulous practices!) has a 100% margin - I just know ours was around 40%-50%. On the subject of recruitment paperwork (DBS, references, interviewing, certificates, health questionnaires etc.), let's say this is indeed junior administration work - though not minimum wage work - so let's say a school decides to do away with agencies and employs a junior administrator on £15,000 to find, book, and do all the checks for supply teachers. They'd have to pay employer's NI and contribute to a workplace pension on top of the £15,000 taking the true cost to around £18,500 (and only if the administrator never took any sick leave or maternity leave or otherwise needed covering themselves.)

Now back to the agency: your average supply teacher is paid around £120 so with an average 40% margin that's a charge of £48 to the school by the agency for finding and employing a temporary teacher for them. The school would have to book 385 supply teachers - that's about 2 a day discounting weekends and holidays - to even begin to make it worth their while running their own supply scheme. And that's before you bear in mind that a) the school would also have to pay employer's NI for all the supply teachers - through an agency they pass on the cost, b) supply teachers have a very high turnover - it's not unusual to complete the checks for a new supply teacher (which can take up to a month) only to find they've now found a job elsewhere. I'd say every agency recruits and checks about four times more teachers than actually go on to do substantial work for them, and c) the cost of finding teachers - your average job board advert costs around £200 - a cost the school also avoids by going through an agency.

In short even a 40% margin (in my opinion!) is very competitive for the costs which the school avoids by going through an agency. But I don't dispute that there are unscrupulous practices which taint the perceived value of what is actually a necessary service.

Reply 11

kpwxx

Original post by jamesconnor

Another possible issue is that if the teacher finds a more long term position with a school who wants to employ her directly they will often charge a fee for the privilege, on the basis that they 'found' the work for her, even if the position was unrelated to work found by the agency.

I would recommend signing up to any local council supply list available, which should be free and they are likely to do a DBS check which will cover you. In addition, offer to volunteer or ask to go and observe/help in various schools. Once they know her and know she is good they are likely to get in touch if supply work becomes available - most schools prefer to hire people they know for supply, in fact, during placements, observation and work I have only so far come across one who would use an agency.

xxx

Reply 12

ByronicHero

Original post by jamesconnor

Also, the "I've heard" challenge... why do you default to assuming that I've probably heard wrong? Why assume someone posting to this site isn't able to discern truth from fiction? Is this how you relate to the world?

It wasn't a challenge, and I didn't default to that at all - in fact I think it is likely what you've heard is correct in this case. This doesn't negate "I've heard" arguments usually amounting to little more than embellishment and nonsense.

"I've heard" the points raised in my original post from two experienced teachers who have had 2 recent periods of supply teaching (for personal reasons, not because they'd had to). They've been around a while and talk to other supply teachers. One was a former head of department. Both have seen 100% margins again and again. My girlfriend meets other supply teachers. They all say the same thing.

I believe you regarding the margin. I am skeptical about your account of how she is taxed though won't discount the possibility that the consultancy she is registered with is a) dodgy and/or b) incompetent. People usually opt-in to being paid through those companies and are advised under what circumstances such a system would benefit them.

On the subject of "rigorous" checks. Surely this is junior administration work. It can all be tick-boxed. I accept that this work is required but should it be a factor in a 40% margin, let alone a 100% margin.

You have been offered a reasonable account of what these costs cover above the simple fact of administration. I could add to it but I don't think it would make any difference to you and I have no faith in your ability to be civil so I won't waste my time.

All the best.

Reply 13

Fen2k

I work through an urmbella company, not in teaching but another industry.

1) Agencies always change a forture. If she can rid of them and establish herself (obviously a lot harder in the education industry for obvious reasons) then set up a limited company. Then go for it. Agencies get away with charging a forture as companies/schools need someone straight away.

2) Expenses! She needs to expense everything. The school won't pay, but it is tax deductable. Travel, food, accommdation etc - all, in some cases, can be claimed on expenses.

Reply 14

El Salvador

I've worked with one who paid me c£16/hour but charged c£54/hour from the school.

Reply 15

Blou17

Original post by jamesconnor

http://community.tes.co.uk/tes_supply_teaching/f/62/t/410158.aspx

May be of interest

Reply 16

skeptical_john

It's quite standard for an agency to charge double what the client is getting paid. Most of the crap you buy in shops has a 100% mark up. Why would their services be any different?