A LEADING businessman says recruitment agencies are driving up the cost of hiring skilled IT staff and effectively forcing businesses to pay an unofficial tax for giving someone a job.

Pat Byrne, chief executive of aviation software specialist Rainmaker and chairman of airline Cityjet, says recruitment agencies have become too dominant and are charging employers exorbitant and unsustainable commissions.

He says agencies seek up to 28 per cent of the salary of anyone hired by a client company. In the case of software engineers and other similarly qualified staff, this could come to between €14,000 and €19,000.

According to Mr Byrne, Rainmaker refuses to pay commissions at that rate, but he argues that the agencies regularly seek these percentages and many companies feel forced to pay them.

“They are exorbitant and unsustainable and, in my opinion, the agencies are destroying this business. It’s like a tax on jobs,” he says, adding that it’s a problem faced by all IT companies, including multinationals.

Recently, Mr Byrne said his company engaged somebody from an agency to fill a vacancy at Rainmaker, while on the same day, someone else from the same agency attempted to poach one of its staff.

He believes there are too many agencies fighting for the same business, with the result that IT professionals considering a move simply register with one of them, so they control the supply.

“They don’t add value,” he adds. “If you were getting a super screening service you might tolerate it, but you’re not, you’re getting just a lot of CVs. You rarely get somebody in here that is absolutely right. The agent should be doing the screening.”

Mr Byrne says Rainmaker tried to avoid agencies by advertising on websites, but often found it had to use an agency as well.

He also says a new style of recruitment agency has emerged that charges €950 up front and refunds the money if it does not fill the position within a number of months. However, these are still very much in the minority.