Agency margins

[thesmartoneuk]

Just wondering what the typical agency margin is for an IT contract.

My agency are currently taking almost 30%.

(pauses for laughter)

How does one get their agency to reduce their margin at contract renewal?

[zeitghost]

Threaten to walk?

[thesmartoneuk]

What if they cited that any less of a margin would not be cost effective due to the relatively low contract rate?

Would that be B.S.?

[malvolio]

Depends on your rate. It costs the agency a certain amount to run things, so the lower the rate the worse the margin appears.

Not forgetting of course that it's not your money and you had no part in establishing the deal - as far as your cut is concerned, you either said "pay me £x per hour" or you said "OK, I'll go with £x per hour". If you said anything else, why are you working there? And why are you suddenly exercised about the agency's cut - greed, perhaps?

Realistically, if you want to get a larger piece of the overall deal, either negotiate with the agency on the basis that they have no more work to do on renewal so please can we shift the balance, or deal with the client and use them to squeeze the agent on margin. But, unless you're absolutely indispensible, be prepared to go back to looking for work in the near future...

[mailman]

here we go again...

fact...it is YOUR money they are taking! FFS...where do you get this sh1t from that its NOT your money? :rolleyes

Another fact..agencies are scam artists...dont for a second think they wouldnt do you out of more of your rate if they could get away with it...because they would.

But when it comes time to resign...screw the f*ckers in to the ground.

Do unto them...what they do unto you :rollin

Mailman

[bangkokmark]

Re: here we go again...

I'm a contractor but don't entirely agree! Commission is the agencies cut for finding you the position and there running costs and possibly a contribution to their factoring costs.

I agree 30% is excessive and I would put pressure on them to reduce, normally by using other opportunities as leverage (i.e. opportunities that may or may not exist). Depending on the length of the extension and other opportunities (that do exist), I may walk and tell them to shove it.

[rebeccaloos]

disagree

Mailman,

No it's not your money. You haeva contract with the agency, not with the client.
In theory, they could take 90%, as long as they pay you the rate they promised, what's the problem? So what if the client is a sucker and pay over the odds.

If I was a client, at renewal time, I'd try to get the rate down (not the contractor rate, but the rate that the client is paying the agency), and of course if the agency tries to pass on that decrease to the contractor, then the contractor is perfectly entitled to refuse - in which case, in all probabilities, the agency will accept to earn less and pay the contractor as much as they were paying him for the initial contract.

But the "cut" is nothing to do with you, the contractor. In theory.

[Vetran]

Re: disagree

depends entirely on whether your rate was forced down so the Agent could make more margin. if you asked for £30, the agents told you oh no we can't get that and give you £25 then charge the client £50 its not right. Unfortunately in this market they can get away with it.

[oaksoft]

They are not taking 30% from you personally. It isn't your money - it's the client who is paying the agent more than he needs to.

Why are you upset by this?

There is a common misconception that if the agent dropped his cut that you'd automatically get more money.

Not true.

If the agent cut his margin the client would pay less and you'd be on the same rate.

My advice would be to keep quiet about knowing this, safe in the knowledge that if you make a demand for an extra £6 per hour at renewal or you'll walk that the agent will give in without approaching the client at all rather than see you leave.

Of course, you have to be good

[oaksoft]

Question for Mailman

What makes you think the 30% is his money?