Agency excessive margin

[Unix]

Call them and demand a rate rise or you will walk, but be prepared to walk. Or next time ask the client at interview how much they are paying the agent, better yet ask the client to hatch a plan to ditch the agent so you get everything.

FAO NLUK (this is a joke)

[vadhert]

These types of cry baby threads are comical.

So you agreed to be paid x.

Agency charges the client x + y;

You find this out and get the hump because x + y is more than you get.

Seriously, Did you think the agency is there as a charitable cause? 20, 25, 30, 50, 100% even. They are there as a business and will want to make money.

Either negotiate harder or find a new contract.

[vwdan]

Wait til you work for one of the big consultancies. I was being billed to the end customer for 3.3x times my day rate. No idea what the agency got, but someone was taking some cash home for my days work!

(But it was a lovely little project, the rate was decent enough for me and it was close to home. Some you win, some you lose.)

Mind you - I put through a design doc the other day that included my rate to the end client and it was only £100 more than I'm taking with an agency inbetween so there ya go!

[BolshieBastard]

I have some sympathy with the OP. Agents frequently are economical with the truth about rates.

When I stopped contracting, I was one a good rate. When I decided to get back in, I was frequently asking agents who approached me what the client would pay. As is the case, they'd quote a range. Where I considered this acceptable, Id pitch towards the top end.

And frequently that's the last I heard about the role.

So to get back in, I had to drop my rate a little. That in turn means the agent creams off more unless they're on a fixed price (yeah, right!).

Ive now got fixed up but at a rate that's at the top of the 3rd quartile of my expected rate so clearly the agent has grabbed more of the client's budget (BTW, its not the agent's money, its the client's).

It is galling to find out an agent is creaming more off than they should and I think its a bit daft of people to say 'you agreed the rate, you signed the contract, suck it up.' Yeah, I can just imagine you all saying this when you've found you've lost out on money in any deal!

If you dont know the client's budget (not how much the agent says the client will pay), how can you make an informed judgement when there are often contract clauses preventing you discussing your rate?

Contracting must be one of the few if not the only profession when 'margins' are deliberately and wilfully withheld from people (contractors) enabling them to make an informed decision.

In all my contracting years, only twice have I been asked at interview how much did I ask the agent for clearly monitoring how much given to the agent was being passed to the contractor.

There needs to be more transparency in the chain about what the client is paying, what the agent's commission is and how much the contractor receives. I frequently read here how people should operate in a more business like manner (which I agree with). But, how are you supposed to make an informed decision on rate for the work when you do not know or are at worst, mislead about the overall budget?

It doesnt held when people here have their head stuck up their bum and offer advice such as 'suk it up,' 'you agreed the rate' etc, etc.

There is no justifyable reason that an agent should be allowed to cream commission of more that single digit percentage after the role has been secured with, imho, a maximum commission of 10%-15% for sourcing a successful application.

When you think about it, if you are in a 52 week contract, you can easily have an agent taking a commission equivalent of 50 quid a day, 250 quid a week for generally doing sweet FA other than self billing once a month if you're lucky.

In contrast, a quality accountant will likely cost you 100 quid a month. Some people on here need to open their minds to this rip off.

[DaveB]

I have some sympathy with the OP.

Nope, no sympathy at all. OP was offered a rate for the gig and took it. If he hadnt found out how much the agency was making he'd still be hapopy with it. What the agent charges the client is irrelevent to the contract if they are getting rate they are happy with. If you want a better rate, negotiate it up front, dont start whining when you realise you could have got a bit more.

When you think about it, if you are in a 52 week contract, you can easily have an agent taking a commission equivalent of 50 quid a day, 250 quid a week for generally doing sweet FA other than self billing once a month if you're lucky.

In contrast, a quality accountant will likely cost you 100 quid a month. Some people on here need to open their minds to this rip off.

They are also factoring payments on your behalf. If you are on a weekly pay run they almost certainly won't have been paid by the client when they pay you. Check a few of the factoring services around and see how much they charge to pay against an invoice before the end client has paid. It's typically 10-15% of the invoice value depending on the end client.

If you are not opted out they are also carrying the risk of having to pay you if the client doesnt pay them at all. Yes they will wriggle and try and get out of it, but they are still on the hook for it and you would be able to take action to get them to cough up.

Yes most actual pimps are only one step removed from the dodgy geezer in the market selling knockoff perfume out of a suitcase (Hi DA ), but as a company they dio actually do stuff other that talk bollocks to clients and contractors all day.

Of course you could go direct, if the client will deal with you, and then wait 30,60,90 days to get paid. If you get paid at all.

[BolshieBastard]

Nope, no sympathy at all. OP was offered a rate for the gig and took it. If he hadnt found out how much the agency was making he'd still be hapopy with it. What the agent charges the client is irrelevent to the contract if they are getting rate they are happy with. If you want a better rate, negotiate it up front, dont start whining when you realise you could have got a bit more.

Like I said, some people have their head up their bums. So you're supposed to be happy because you were kept in the dark? You're so entrenched in the old hidden knowledge model that you cant see the obivous.

You cant negotiate a better rate because under the current model, agents frequently want to submit the lowest cost benefit contractor to them. Yes, in the past I have asked for and got the highest rate the agent was prepared to admit to.

That is totally different to what the client's budget.

They are also factoring payments on your behalf. If you are on a weekly pay run they almost certainly won't have been paid by the client when they pay you. Check a few of the factoring services around and see how much they charge to pay against an invoice before the end client has paid. It's typically 10-15% of the invoice value depending on the end client.

And you think sums of £50 a day, £250 a week is a reasonable factoring margin? You need to start acting like a business chum.

If you are not opted out they are also carrying the risk of having to pay you if the client doesnt pay them at all. Yes they will wriggle and try and get out of it, but they are still on the hook for it and you would be able to take action to get them to cough up.

Many businesses operate to the same principle of having to pay suppliers before they get paid for their services. I had to do this in my other business income stream. I suggest you wise up to being a proper B2B instead of the iT Contractor mentality.

Yes most actual pimps are only one step removed from the dodgy geezer in the market selling knockoff perfume out of a suitcase (Hi DA ), but as a company they dio actually do stuff other that talk bollocks to clients and contractors all day.

Of course you could go direct, if the client will deal with you, and then wait 30,60,90 days to get paid. If you get paid at all.

To go direct, you have to have a client happy to do this. Clearly the majority arent prepared to take on an army of contractors and deal with them themselves. The direct market is niche. If many more contractor were able to go direct, you might just find clients who are prepared to deal direct with few contractors may be less inclined when they've suddenly got 10, 15, or 25 individual contract negotiations to complete, invoices to complete on a weekly basis etc, etc.

Your mindest is locked into the current contract model of hidden and excessive commissions. I dont know of any other industry where commissions are hidden.

You seem happy to perpetuate it. I think it needs to change.

[sal]

It is galling to find out an agent is creaming more off than they should and I think its a bit daft of people to say 'you agreed the rate, you signed the contract, suck it up.' Yeah, I can just imagine you all saying this when you've found you've lost out on money in any deal!

That is exactly what i said to myself, when i was in such situation - suck it up, you agreed to that amount now deal with it. Then of course i just twisted the agency arm to increase my rate at the next extension without passing this to the client.

And who's to say that if you asked for the bigger rate at the beginning you would have got the role? More often than not greedy agents that operate at high margins are only able to do so by "awarding" the contract to the cheapest contractor that the client found acceptable.

And how did you decide how much they should cream? I bet the permies around you are thinking "this sodding contractors are getting paid more money than they should"...

[BolshieBastard]

That is exactly what i said to myself, when i was in such situation - suck it up, you agreed to that amount now deal with it. Then of course i just twisted the agency arm to increase my rate at the next extension without passing this to the client.

And who's to say that if you asked for the bigger rate at the beginning you would have got the role? More often than not greedy agents that operate at high margins are only able to do so by "awarding" the contract to the cheapest contractor that the client found acceptable.

And how did you decide how much they should cream? I bet the permies around you are thinking "this sodding contractors are getting paid more money than they should"...

It'se still perpetuating a system that operates by keeping the client in the dark about how much the contractor is getting, a system that keeps the contractor in the dark about how much the agent is keeping back.

Yes, people can try and get an increase at renewal (good luck with that after 3 or 6 months) and many agents will simply tell the client you want more money. If you do get it, great. But dont be under the illusion it hasnt caused a bit of ill will with the client and the agent is just sat there untouched by the whole thing.

There's no guarantee you'd get a role asking for top rate. That's not my point. The point is because margins are not public, the agencies will look to submit candidates to the client that give them best return.

How is it, many agencies report record profits when the contract market is deflated and rates are low? I wonder where all that 'missing' money comes from. I mean, it couldnt be increased margins and lower rates to contractors, could it?

[jmo21]

Be annoyed, yes.

Claim extortion..... ridiculous.

You negotiated for some business.

You agreed a price with the agent. He may have won on this occasion, but if you had asked for a higher rate, you might not have been put forward.

The next moan will be "there shouldn't be agents, they add no value".

Bollox!

You might not like them, and boy can they be annoying, but they DO have a place.

Until such time as a manager can place a job advert on a website, and have all the responses (email/phone call) managed, a short list of X candidates selected for interview and arranged for him automatically, followed by management of any cancellations/rearrangement phone calls, and set up the winning candidate with an intermediary company to factor payments through, blah, blah etc etc etc..... then agents aren't going anywhere any time soon.

[northernladuk]

Wait til you work for one of the big consultancies. I was being billed to the end customer for 3.3x times my day rate. No idea what the agency got, but someone was taking some cash home for my days work!

(But it was a lovely little project, the rate was decent enough for me and it was close to home. Some you win, some you lose.)

Mind you - I put through a design doc the other day that included my rate to the end client and it was only £100 more than I'm taking with an agency inbetween so there ya go!

But that's a completely different model. Accenture charge over a grand per day to their clients. Should we complain when we get a market rate that they are creaming 100% plus. No, it's the model which is different to bums on seats.

Am wondering if this is the case with PCs 40% story as well. It just doesn't make sense unless PC was on 20-30% under market rate.