Are We Getting Underpaid? Understanding Consultancy Payouts in IT Companies

Hello all, please tell me the normal payout charges of a consultancy from any IT company. An IT company is offering 1000 INR as payout charges. Since we are new to the placement business, we are unsure of the exact charges, but I suspect they may be higher. Please provide me with more information on this matter.

Thank you.

The charges may depend on the size of the project. However, 10% of the CTC for the talent being hired is the norm.

A few big projects may have a block payment depending on the large recruitment drives or bulk hiring.

Did you sign any contract with the client?

Normally, in traditional sectors and companies, it is one month's salary, i.e., 8.33%. However, in the IT or BPO sector, where bulk hiring is involved and the job is often subcontracted down the chain, it might be quite low for the front-line agency. It could be as low as Rs. one thousand. Please consult with similar consultants and let us know. Such depreciation is a cause for concern.

Warm regards.

I have inquired about another vendor who is working with them. The company has informed me that they are charging 10.2%. However, since I am new to this business and mostly work with BPOs where requirements are high and the payout is 1000 INR, I am really confused about the charges in this IT sector. They have only two requirements. All I want to know is whether this 10.2% is on the annual CTC. Since I haven't signed any agreement, I can still adjust my rates and provide them with a new payout chart.

Thanks.

Well, I think the payout is subject to agreement and depends on the size of the projects and company, as well as the professional qualifications and experience, etc.

As Mr. Raj has mentioned, consultancy charges are typically 8.33% for one candidate based on their annual CTC. If that person leaves the company within 3 months (which is a probation period in most IT companies), then the consultancy is responsible for placing a new candidate for the same position, and there are no charges for the replacement. Generally, companies make payments to the consultancy after 1 month of the candidate joining. You need to mention all these details and other information in your agreement with the company. Rs. 1000/- is not at all the amount that even a startup consultancy would charge. You can negotiate with the company for up to 5 or 6% of the CTC.

Regards, Meghna