The Power Of Disclosed ICT Contracting Fees In Canberra

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If you have been involved in the federal government ICT Contracting industry for a while, as either a Hiring Manager or a Contactor, you may be aware that many ICT recruitment and consulting companies aren’t often inclined to willingly disclose the fees that they charge the federal government for ICT contractor services.

These fees are added on top of the rates that the recruitment companies pay to the ICT Contractors who they engage to deliver the services. This unwillingness to disclose fees often leads to opportunistically high fee levels being charged. The result is a higher cost to the federal government and the Australian taxpayer while, at the same time, lower rates are paid to the ICT professionals who actually deliver the services.

Thanks to the Digital Transformation Agency (DTA) Insights page within the Digital Marketplace, a federal government tendering portal, we are all able to get a strong idea of the charge rates that the federal government pays for different ICT role categories when they engage technology contractors.

These insights from the Digital Marketplace, coupled with the Salary Surveys published by national ICT recruitment service providers, allow Recruitment Hive to analyse the effects that our disclosed and moderate contractor fee structure has on the costs to federal government for our ICT Contractor services and the rates we win for the ICT Contractors’ whom we represent.

If you aren’t already aware of Recruitment Hive’s disclosed and moderate ICT contractor fee structure, it might be best to pause a while and click here to obtain a thorough understanding.

In summary, Recruitment Hive’s disclosed and moderate fee structure that we include within all our emails is:

Recruitment Hive is determined to both save the Australian tax-payer millions (and millions) of dollars via our disclosed and moderate fees while at the same time, and very importantly, securing higher than average pay rates for the ICT Contractors that we represent.

Reduced costs for federal government and the Australian tax-payer while, at the same time, paying more to Contractors!

 

Is it possible?

 

Let us take a look at the numbers:

Beginning with Organisation Change Managers we can see (as of the 17th of January 2020) on the Digital Marketplace’s, Insights page that this category of contract role has been released through the tendering portal 84 times between August 2016 and January 2020, and that 596 service providers are registered on the Digital Marketplace as having the capability of providing Change Management services.

Via a graph on the Digital Marketplace’s Insights page, as displayed on the 17th of January 2020, they convey that the total charge rates (including GST) of all submissions for Change Managers’ range from approximately $1 225,00 per day (inc-GST) up to approximately $1 650.00 per day (in-GST). I have to state these as approximate numbers as the graph in question does not have small increments on the Y axis, but I am sure anyone who looks for themselves will agree with these approximations.

As I’ve been an ICT recruiter in the federal government sector now for over twenty years I’ve been conditioned to think in hourly rates, excluding GST. Hourly rates vs day rates is the same for my brain as thinking in Australian dollars as compared to English pounds. Please excuse me as I have to convert these day rates (inc-GST) into hourly rates (ex-GST) for me to be able effectively process and analyse.

So, for Org. Change Managers the federal government is paying service providers between $139.21 per hour (ex-GST) on the low side and $187.50 per hour (ex-GST) on the high side – approximately (based on an eight hour working day as confirmed by the vast majority of federal government Work Orders issued for ICT contracting services). Further, the Insights within the Digital Marketplace portal convey that the median cost of Change Manager services is approximately $1 400.00 per day (inc-GST), which translates as $159.09 per hour (ex-GST).

So, what effect does Recruitment Hive’s disclosed and moderate Contract fee structure have on the total amount paid by federal government for ICT Contractor Organisation Change Manager services that we provide?

To start our analysis, Recruitment Hive has eight ICT Organisation Change Managers currently engaged within four different federal government Clients.

The lowest Client charge rate Recruitment Hive has on our books currently for a Change Manager is $112.00 per hour (ex-GST).

The highest Client charge rate of Recruitment Hive’s currently engaged Change Managers’ is $174.00 per hour (ex-GST)

In summary, Recruitment Hive’s Client charge rates for Change Managers’ are:

Low = $112.00 per hour (ex-GST), OR $985.60 per day (inc-GST)

Median (middle) = $146.74 per hour (ex-GST), OR $1 291.31 per day (inc-GST)

Mean (average) = $143.15 per hour (ex-GST), OR $1 247.66 per day (inc-GST)

Mode (most common) = $145.00 per hour (ex-GST), OR $1 276.00 per day (inc-GST)

High = $174.00 per hour (ex-GST) OR $1 531.20 per day (inc-GST)

Let us compare this to the Insights conveyed on the Digital Marketplace, as listed on the 17th of January 2020, regarding the cost of Change Managers’ services paid by Federal Government:

Approximate lowest Client charge for Change Manager services described within the Digital Marketplace’s insights:

 

Lowest (approximately) = $139.21 per hour (ex-GST), OR $1 225,00 per day (inc-GST)

Highest (approximate) = $187.50 per hour (ex-GST), OR $1 650.00 per day (in-GST).

Median (approximately) = $159.09 per hour (ex-GST), OR $1 400.00 per day (inc-GST)

Recruitment Hive’s lowest Client charge rate for Change Managers’ is $239.40 less, or 19.54%, per day lower than the minimal (approximate) rate described on the Digital Marketplace (it is important to note here that some federal government departments are not required to report their contractor costs to the Digital Marketplace).

Recruitment Hive’s highest Client charge rate for a Change Manager is $118.80 per day less, or 7.8% lower than the highest (approximate) charge rate for Changes Mangers’ described on the Digital Marketplace.

Recruitment Hive’s median (middle) charge rate for Change Managers’ is $108.69 per day, or 8.4% lower than the Digital Marketplace’s described median rate for Change Mangers’.

Therefore, by any measure, Recruitment Hive has lower Client charge rates, in some comparisons significantly so, for providing Change Management services to federal government than our competitors.

However, this is only half the story because Recruitment Hive absolutely does not want to achieve these savings for the Australian tax payer at a cost to the ICT Contractors we represent. We aim to achieve higher payment rates, than our competitors, for the ICT Contractors that we represent while (almost miraculously) also saving money for the Australian tax-payer. We aim to do this by imposing more moderate fee margins, that we always disclose.

Of Recruitment Hive’s currently engaged Change Manager Contractors’ the rates we pay them are as follows:

 

Lowest = $98.75 per hour (inc-super)

Median (middle) = $127.50 per hour (inc-super)

Mean (average) = $125.77 per hour (inc-super)

Mode (most common) = $135.00 per hour (inc-super)

Highest = $150.00 per hour (inc-super)

We can measure, analyse and compare the ICT Contractor rates Recruitment Hive are winning and paying to the Change Managers we represent to Federal Government Clients by downloading publicly available Salary Surveys from our competitor websites.

What do our competitors’ Salary Surveys state about Contractor pay rates for Change Managers’ within the Canberra, federal government market?

Unfortunately, under advice from Recruitment Hive’s lawyers, we are unable to convey the full details of our analysis here. The data contained within our competitors Salary Surveys is copyrighted material and to discuss it in detail within this blog would cause Recruitment Hive to be liable to civil law action.

Instead of using the specific names of the three national competitors whose Salary Surveys Recruitment Hive had emailed to my work email address (many thanks to them, by the way!) or the copyright data contained therein, I will just have to convey the final analysis instead.

Hopefully, my personal reputation over the past twenty years in the Canberra ICT Contractor industry and that of Recruitment Hive’s is such that a reader is prepared to take my word for the accuracy of the following analysis. If not, please give me a call and I would be happy to point you in the right direction for you to obtain the Salary Surveys I used in this comparison analysis and for you to verify the results yourself.

All of the three competitor Salary Surveys used to derive the following analysis came from national ICT focused recruitment companies. I was careful to only use the pay rates they listed for the Canberra ICT Contractor industry and to ensure that the rates where standardized to include superannuation in the compared rates (some Salary Surveys listed rates including super while other listed rates as excluding super). When a competitor listed rates for Change Managers’ as day rates within their Salary Surveys these where converted to hourly rates with the conversion based on an eight-hour working day (which is the default listed within federal government Work Orders).

I was careful to compare apples with apples.

Of the three competitors used in the data sample for Contractor pay rates for Organisational Change Managers’ in the Canberra technology industry, the following was found:

Recruitment Hive’s highest rate paid to a Change Manager was 26.3% higher than the highest rate paid to Change Managers from the first competitor we compared ourselves to.

Recruitment Hive’s average (mean) rate paid to Change Manager’s is 4.4% higher than the “average” rate paid to Change Managers of the second competitor we compared ourselves to (who only listed average rates, not the high and low rates paid as most Salary Surveys tend to).

When compared to the third competitors’ Salary Survey that we obtained, Recruitment Hive’s highest pay rate to a Change Manger Contractor was only 2.2% lower than the highest rate listed within their Salary Survey for Change Managers in Canberra.

Following the completion of this analysis the power of Recruitment Hive’s disclosed and moderate fee structure can been seen. Our median submission rate for Change Managers’ is 8.4% lower than the median described on the Digital Marketplace, while we are able to win pay rates for Change Managers’ up to 26.3% higher than some of competitors, and only 2.2% lower than other competitors within our data sample.

Through this analysis the ability to both save the Australian tax-pay money and to pay our contractors’ significantly higher rates than some, and almost as high as others becomes clear.

It’s almost a business miracle. Achieved through Recruitment Hive’s unique strategy of moderate and disclosed fees.

 

Are you a hiring manager or contractor with some insight ? Comment below your thoughts on our disclosed contract fees.