It’s important to pay attention to the agency mark-up rate when sourcing temporary staff through agencies as it can impact how much your workers get paid.
It’s really important to pay attention to the agency mark-up rate when sourcing supply teachers and temporary staff through agencies. It doesn’t just affect the rate you pay – it can also make a big difference to how much your worker will get paid.
What is mark-up?
Put simply mark-up is the fee the agency charges you for finding a worker.
It is a percentage added on to worker pay and legislative costs to make up the total charge rate. Legislative costs include pension and National Insurance payments, apprenticeship levy and holiday pay, all of which are a percentage of the worker’s pay.
Why does it matter?
It’s important to know what mark-up rate your agency is charging so you can be confident you are getting a competitive rate – not just for your school, but also for your temporary workers given it impacts on what they get paid too.
Workers typically register with several agencies and exclusivity is rare. As a worker is likely to be attracted by the best pay rate, by negotiating your agency mark-up, you are putting your school in a good place to attract the best workers.
Understanding the importance of mark-up will put you in a great position to negotiate with agencies. This is something you can – and definitely should – do. By negotiating on the mark-up rate you will benefit from:
- lower charge rate to your school = savings
- enhanced worker pay = increased opportunity to secure and retain workers
- improved worker benefits = satisfied and committed workers, benefiting the children they teach
It’s also worth remembering that as the mark-up rates under the CCS framework are maximum rates suppliers will expect you to negotiate.
Here’s an example
Before we launched the Supply Teachers and Temporary Staff framework, the average agency mark-up schools were being charged was 38%. On a daily charge rate of £200 this would breakdown as agency fee £56, worker pay £101.81 and legislative costs £42.19:
Under the framework, agency mark-ups of 15% and below are achievable. On a charge rate of £190, the split would be agency fee £24.70, worker pay £116.89 and legislative costs £48.41:
In this example you pay £10 less per day and your worker receives £15.08 more per day.
Why not download our infographic to share this important message with your colleagues?
We’re here to help
Our framework gives you full transparency of all costs, including the mark-up charge, helping you to make a real difference to your school budget and your temporary workforce.
Log on to the agency selection tool to see what mark-up rates agencies in your area are offering. And don’t forget to negotiate to reduce these rates even further. This is exactly what Academies Enterprise Trust did and they are on track to save £119,000 through the Supply Teachers deal. Read their case study. Also look out for next month’s blog which will provide top tips to help you negotiate with confidence.