We do not take our % out of your salary. We add our % on top of your salary and charge the client.KoZeN, I also hate sounding harsh because I think I've read comments of yours in other places that sound very clueful -- but this very comment of yours is a perfect example of the rampant, rank slipperiness which seems to exude from every corner of your profession.
The bottom line is that recruiters make the transaction significantly more expensive for both parties -- without adding a heck of a lot value (other than an endless appetite for trolling job boards and screening emails) to either side.
For example, if the client says to you, a recruiter, that they're willing to pay £500, that already means that their real, true, internal budget real budget is £600. As in, they'd be happy to pay that £600 for someone they found for someone they found through their own channels.
Or if you look at it the other way: even I, as a developer, decide that it's fine (if not great) to take £500 per day, I still pay (through the nose) for it, in that I know I'm being billed at a significantly higher rate, and corresponding I have to walk an eggshells in every meeting with management knowing that they're paying through the nose more for each day of my time then they should have to, and with fellow developers also (resentful of the fact that their company is paying significantly more for a unit of my time than for theirs, also). Plus the additional, very substantial risk that I will get laid off sooner than I otherwise might, precisely because of the higher rate (and the fact that they have to walk on eggshells, or otherwise deal indirectly with me because I'm branded as coming from an agency).
All of this, aside from the fact that the 20% overhead you're quoting is a very low outlier, in my experience. In fact, in all cases when I've had direct knowledge of a recruiter's overhead, it's been 30% or higher - with 50% being not uncommon.
I know I'm fudging a bit: recruiters do provide some value (much of it psychological, in that they serve as proxies, or foils more like it, in various parts of the negotiation process); it does take time to sift through those job boards (and many employers just don't know where to post, or how to post effectively); and a very small portion (less than 10%) of recruiters -- it seems you may be one of them -- do seem to have natural talents, and are capable of adding substantial value to the negotiation process (in terms of knowing the market, sizing up candidates, etc).
But the vast majority do not (again, other than serving as a psychological buffer for a highly nerve-wracking process both ways). Many seem to add substantial negatives (either through obfuscations, outright cluelessness, general slipperiness and stuffiness, etc).
And either way, it's simply intellectually dishonest for you to claim that we, as contractors, don't pay for your hefty fees. Of course we do (and so do clients) -- we both pay through the nose. And we just don't seem to get all that much in return.