Negotiating agency commission

**ShandyDrinker** · 14 April 2016, 19:07

Although I'm no recruiter but 16% doesn't sound overly greedy. Given the invoice factoring and other costs associated with running an agency (depending on the size etc) I would imagine the margins aren't exactly large. Have a look at this for a good article on agency margins.

**Crossroads** · 14 April 2016, 19:15

Are you happy with your rate?

Or are you trying to reduce the bill to the client?

Turn it on its head... the agent is giving you 84% of his money...

**ShandyDrinker** · 14 April 2016, 19:30

Originally posted by avgjoe View Post

As I've not done this much before, I thought it would be good to see if anyone else has been in the same situation

I've really only had this once early on in my contracting career not long after the financial crash... the agency told me not to be greedy with the rate I was asking so settled on a rate I thought reasonable for a local contract. I can't entirely remember the background but I had asked the agency about an increase at renewal and mentioned this to the PM who casually asked what I was being paid... it transpired that the agency margin was in the region of 35% so as a result of a number of conversations in the background my rate was increased substantially.

Ultimately if you have asked for an increase and it's not forthcoming though you have to be prepared to either suck it up and continue or walk.

**northernladuk** · 14 April 2016, 19:38

16 percent isnt bad and it's very dependant on a number of factors, size of agent, never of contractors they have, what you are being paid etc. Best you are going to do is get a few single percentage points off him at the very best. I wouldn't be spoiling a decent gig for a few percent. Low is 10-12 percent.

I also can't see you risking bench time for so little either.

If you want it to work you can't 'try'. You tell them what you want and if you don't get it you walk. They know full well you won't. They do this for a living.

No one is replaceable. You might think you are not but I may most cases you'd be wrong. Your client will also likely to have a rate card so unlikely they will pay more just because you being mercenary.. And he's not your boss.

**ShandyDrinker** · 14 April 2016, 19:41

Originally posted by northernladuk View Post

16 percent isnt bad and it's very dependant on a number of factors, size of agent, never of contractors they have, what you are being paid etc. Best you are going to do is get a few single percentage points off him at the very best. I wouldn't be spoiling a decent gig for a few percent.

I also can't see you risking bench time for so little either.

If you want it to work you can't 'try'. You tell them what you want and if you don't get it you walk. They know full well you won't. They do this for a living.

^^ What NLUK said.

**avgjoe** · 14 April 2016, 19:50

Originally posted by Crossroads View Post

Are you happy with your rate?

Or are you trying to reduce the bill to the client?

Turn it on its head... the agent is giving you 84% of his money...

The agent can go to the client and ask for more - but it would mean the client paying a whole lot more for me just to get a slight bump up. I am definitely replaceable but this whole saga started out when I accepted less than what was initially sold to me when I took the job. So, it's clear that the agency is taking the piss.

I am happy to be earning, but they do need a reminder (at least) to reconsider their stance. I am not suggesting that they should not earn anything, but they need to understand that it takes a unique individual to last in that company and appreciate that this may well become a longer term relationship. So they may end up making more anyways in the long run

I have a good relationship with my boss and although nothing is set in stone, he and other senior members have discretely expressed their desire to keep me on.

**VillageContractor** · 14 April 2016, 19:50

Originally posted by ShandyDrinker View Post

I've really only had this once early on in my contracting career not long after the financial crash... the agency told me not to be greedy with the rate I was asking so settled on a rate I thought reasonable for a local contract. I can't entirely remember the background but I had asked the agency about an increase at renewal and mentioned this to the PM who casually asked what I was being paid... it transpired that the agency margin was in the region of 35% so as a result of a number of conversations in the background my rate was increased substantially.

Ultimately if you have asked for an increase and it's not forthcoming though you have to be prepared to either suck it up and continue or walk.

If you're not prepared to walk then you're unlikely to get it. Don't ask don't get, however agents won't give in if asked, they will only give in if you have a stronger hand. Don't bluff. If you're vital to the project or have a good relationship with the client then that may work in your favour

**avgjoe** · 14 April 2016, 20:00

Originally posted by VillageContractor View Post

If you're not prepared to walk then you're unlikely to get it. Don't ask don't get, however agents won't give in if asked, they will only give in if you have a stronger hand. Don't bluff. If you're vital to the project or have a good relationship with the client then that may work in your favour

Well, this is what i'm going to try to emphasize to the agent.. or try anyway

**Andy Hallett** · 14 April 2016, 20:03

If you are putting in a sterling effort and busting your balls send a justification for a rate rise to the agency and ask them to present it to the client. Hopefully the client will recognise what a stunning job you are doing for them and agree to an increase. The agency may also increase their rate and you both win.

16% isn't particularly high in most industries for every client outside the big banks and multi-nationals.

Negotiating agency commission