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Old 14.10.2015, 15:45
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How do recruitment agencies work for freelancers ?

Hi Everyone,

I've searched for the answer to this question but I may have missed the explanation - so apologies if this has already been answered.

Having worked here as a freelancer for a number of weeks there appears to be a peculiarity with Swiss recruiters that I have not seen before. Specifically it seems that there are very many recruiters but they do not work directly for the hiring company. It appears that some of the large Medical Device and Pharma companies outsource their recruitment to a HR vendor, who then in turn rely on recruiters to pass candidates on to them and eventually to the interested company. This results in many 'middle men' who obviously take their respective cuts of the pie. This has obvious implications for a freelancer in terms of the final rate they get paid.

Am I reading this situation correctly ? is there some reason that these large companies operate like this ? can one cut out the middleman in such a situation ?

Just curious...
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Old 14.10.2015, 15:56
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Re: How do recruitment agencies work for freelancers ?

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Hi Everyone,

I've searched for the answer to this question but I may have missed the explanation - so apologies if this has already been answered.

Having worked here as a freelancer for a number of weeks there appears to be a peculiarity with Swiss recruiters that I have not seen before. Specifically it seems that there are very many recruiters but they do not work directly for the hiring company. It appears that some of the large Medical Device and Pharma companies outsource their recruitment to a HR vendor, who then in turn rely on recruiters to pass candidates on to them and eventually to the interested company. This results in many 'middle men' who obviously take their respective cuts of the pie. This has obvious implications for a freelancer in terms of the final rate they get paid.

Am I reading this situation correctly ? is there some reason that these large companies operate like this ? can one cut out the middleman in such a situation ?

Just curious...
Switzerland does not allow short term employees to be freelance, they are not in business on their own account as they don't take risk, they work on the employees premises & hours stipulated by the employer.

The Swiss think such people are avoiding taxes & social costs, which is basically correct, so the middleman can't be cut out.
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Old 14.10.2015, 16:21
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Re: How do recruitment agencies work for freelancers ?

You are right and I used the term freelance incorrectly - Contractor may be a better term. Anyways, I don't understand the rationale for not being able to cut out the middleman. (BTW, In my position I pay tax etc) Can you help me understand this link?
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Old 14.10.2015, 16:25
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Re: How do recruitment agencies work for freelancers ?

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You are right and I used the term freelance incorrectly - Contractor may be a better term. Anyways, I don't understand the rationale for not being able to cut out the middleman. (BTW, In my position I pay tax etc) Can you help me understand this link?
Switzerland requires you to be an employee & all your earnings taxed in full without special deductions.

The middleman requirement is that of your employer. I had multiple employers in CH, assignments as short as 1 day, never had a middleman but always was an employee.
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Old 14.10.2015, 16:35
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Re: How do recruitment agencies work for freelancers ?

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Switzerland requires you to be an employee & all your earnings taxed in full without special deductions.

The middleman requirement is that of your employer. I had multiple employers in CH, assignments as short as 1 day, never had a middleman but always was an employee.
Sorry, I don't get it: what stopped you from being self-employed?
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Old 14.10.2015, 16:40
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Re: How do recruitment agencies work for freelancers ?

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Sorry, I don't get it: what stopped you from being self-employed?
I was allowed to be part time self employed for work outside CH, however for work in CH it was not possible. You need to be in business taking risk, not turning up at a clients & working on their premises the hours they choose, thats exactly what employees do.

They only allowed the part time self employed as I had already worked & raised invoices. Without their permission I was not allowed to pay tax on that money... You could not make that up

A plumber on the other will turn up when he feels like it..... Thats the big difference.
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Old 14.10.2015, 16:44
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Re: How do recruitment agencies work for freelancers ?

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A plumber on the other will turn up when he feels like it..... Thats the big difference.
Additionally the plumber will have ponyed up the money to form their company and will be paid by the company and not by the end client.
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Old 14.10.2015, 17:13
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Re: How do recruitment agencies work for freelancers ?

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Additionally the plumber will have ponyed up the money to form their company and will be paid by the company and not by the end client.
Unless they are self employed, which is quite possible if your a plumber with Swiss paperwork.
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Old 14.10.2015, 17:15
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Re: How do recruitment agencies work for freelancers ?

Recruitment agencies work for recruitment agencies - the freelancers are just the product they're selling.

If you go direct to a company then you will almost certainly still have to go through some sort of agency/payroll company in the end as they deal with all the legal bits.

The company / you may be able to get a lower agency fee in this case, but how much of that you actually see is debateable.
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Old 14.10.2015, 17:40
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Re: How do recruitment agencies work for freelancers ?

You could start your own company and get a SECO license to lease out people (yourself). You need to put ca. 50K into a closed account as insurance to cover unemployment insurance, pension, etc. in case your company goes belly up. You will also need to insure your company for up to 5 million in damages.


Legally that would work, but large companies do not want to deal with multiple small companies, simply because of the cost of vetting, setting up in the procurement system etc. They would rather contractors go through one of the specialized agencies (Swisslinx, RMIT, Darwin, K2, Adecco, Harvey Nash etc.)


These agencies will also search for people, and if they place a contractor, then that contractor becomes their employee, and the agency leases back to the 'big company'. In some cases, if the 'big comp' finds the talent themselves (through word of mouth, Linked-in etc.) then the contractor still needs to go through one of the agencies, but the agency takes a smaller cut (usually a flat monthly pay-rolling fee) - however, the 'big comp' will expect lower rates, as the agencies are not taking their usual margin off the top.
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Old 14.10.2015, 18:51
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Re: How do recruitment agencies work for freelancers ?

If I understand the question, the issue is not so much with freelancer(contractor)->middleman->client but with freelancer->middleman1->middleman2->client.

If the client has chosen to work this way, and middleman2 doesn't want to deal with directly, what can you do? I've heard of contracts in the UK where there have been three middlemen, and the client is a consultancy...

As already pointed out, you cannot generally be self-employed and work as a contractor/freelancer. In some cantons, you can set up a GmbH without a SECO license* and work through that. Even then it's nigh on impossible nowadays to get your GmbH onto the preferred suppliers list, and even if you could, some clients are extremely nervous of taking your GmbH directly and will insist on an agency in between. All you can really do is negotiate the best fee you can from the intermediary you are dealing with in the first place, and try not to worry about the what the client is actually paying.

I have worked through my GmbH for many different companies in the past ten years - some directly, some via agencies. I have never been an employee of the agency or the client.

*As I recall, BS and BL do not require one-man-GmbH to hold a SECO license.
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Old 15.10.2015, 09:58
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Re: How do recruitment agencies work for freelancers ?

WT and NAT accurately describe it.
Some companies have lists of preferred suppliers, however at least one big pharma company only has one preferred supplier. Which is then basically an outsourcing of employment of temporary workers.
This makes life much simpler for the pharma company and reduces their costs.

As NAT says, just get the rate you are happy with and forget about the 'missing millions'.
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