What is a fair cut for an agency to take?

[Ardesco]

Seriously, don't worry about the agencies cut, worry about your take home. Agency percentage is useful to know when you go for renewal because you can then get a rough idea of how much money they have to play with and what sort of an increase you can ask for, apart from that forget about it, it doesn't matter

[abc]

Seriously, don't worry about the agencies cut, worry about your take home. Agency percentage is useful to know when you go for renewal because you can then get a rough idea of how much money they have to play with and what sort of an increase you can ask for, apart from that forget about it, it doesn't matter

Unless an agency is using a fixed rate, which seems to be rare, my take home rate and the marginal increase in the agency rate, that they get when they rip me off, are clearly directly related.

In simple terms, I get (say) 5/hour less, in order that they can get 5/hour more.

For newbie contractors who get 20/hour for a 40/hour gig this is of course even more "troublesome".

You say "Don't worry". Sorry but I don't agree.

I think that it is important that contractors try to select in favour of those agencies that are honest about rates, especially those that work to a clearly stated low/medium fixed margin.

It's necessary in order to combat the cowboys out there. If you help to “feed” the cowboys they might increase their market share, pushing honest agencies out.

[Cowboy Bob]

In simple terms, I get (say) 5/hour less, in order that they can get 5/hour more.

For newbie contractors who get 20/hour for a 40/hour gig this is of course even more "troublesome".

No, you accept £5 per hour less.

As for newbies, what you say is true. However, every contractor board that I've come across will warn of the dangers of agencies exploiting newbies, and to be honest, if a newbie doesn't do their homework before entering contracting then they get what they deserve. This isn't a game and it shouldn't be treated as such. So many newbies I meet go into contracting thinking it's easy money that will just automatically land in their bank account - they don't think about the possible pitfalls or even do any kind of basic research at all.

[VectraMan]

What always annoys me is the agent still getting a cut after renewal, which is basically nothing to do with them. I don't mind paying for their services (or the client paying for their services if you look at it that way) first time around as the agent has done some work. But when it comes to renewal the relationship between you and the client is much stronger than either of you have with the agent, and I find having to involve a third party and not being able to speak for myself is a bit insulting.

I'm talking renewal at the moment, and I've told client and agent I'm not really happy with the current rate. For all I know the client is moaning about how expensive I am compared to other contractors, and I'm moaning about how cheap I am compared to other contractors, and we're both right.

[abc]

What always annoys me is the agent still getting a cut after renewal, which is basically nothing to do with them. I don't mind paying for their services (or the client paying for their services if you look at it that way) first time around as the agent has done some work. But when it comes to renewal the relationship between you and the client is much stronger than either of you have with the agent, and I find having to involve a third party and not being able to speak for myself is a bit insulting.

I'm talking renewal at the moment, and I've told client and agent I'm not really happy with the current rate. For all I know the client is moaning about how expensive I am compared to other contractors, and I'm moaning about how cheap I am compared to other contractors, and we're both right.

In my opinion this example returns us to the same very basic issue of trust and honest dealing that I've been banging on about for a while now.

If your agency was honest enough to tell you its percentage, then you would know the full amount the client is paying for you now, so you would be able to judge if you are expensive or cheap.

But without this honesty from your agent, you could be on (say) 30/hour and feeling cheap, but thanks to your cowboy agent taking (say) 15/hour, the client thinks you are a greedy bastard when you ask for more!

The agent then sets you up, by agreeing with the client that yes indeed you are a greedy bastard, but offers to replace you with a "highly skilled" newbie. The newbie comes in and takes your job, working for 20/hour. The agent now has 25/hour and puts in an order for that new AUDI that you were hoping one day to be able to afford. While driving the new AUDI for the first time he offers your girlfriend a lift... OK maybe I am getting a bit carried away now.

But anyway, as I said earlier, because of this I think it's very important to try to do business with just those few agents that don't make a career out of insulting our intelligence.

Don't "feed" the cowboys.

[cojak]

Haggling is what you do when you are selling a used car. Of course I do realise that many agents come from that background.

Quite true, you do not haggle.

You quote your rate and you stick to it.

This has nothing to do with flexibility. Flexibiility is to do with being productive at the end of the 1st day in the job and being prepared to fly out and work in difficult situations at the drop of a hat. I am only flexible about my rate if they are not prepared to pay expenses (the rate only increases, never decreases).

This has everything to do with confidence in your value in the marketplace and the good old supply/demand principle.

If you lack confidence in your value or you feel that there are not many jobs out there to replace this one, then drop the price. If you feel that other contractors with your skillset would accept this rate, then drop your price.

I have niche skills, experience and confidence that the end-client will value my work, rates and all (and can show this with extentions to every contract I have worked on).

There is one very important exception to this rule, and it ultimately benefits you, not the agent.

If you don't have any of the above, begin by looking in Jobserve to see what skills do get the good rates then get the proper training in those skills. You can then winkle your way into a contract by accepting the lowest rate you can afford to sell yourself, for 3 months only. Agents who are desperate to get people in with unusual skills will not mind if you don't have the experience provided you are confident that you can do the job.

And I don't give a t0ss about your cowboys, abc - ultimately that's the low end of the contract market. If they muck me about I'll not touch them with a barge pole, I like to see barrow-boys sweat. I keep my professional agents who get me jobs (and don't stiff the client) close and friendly.

[abc]

Quite true, you do not haggle.

You quote your rate and you stick to it.

This has nothing to do with flexibility. Flexibiility is to do with being productive at the end of the 1st day in the job and being prepared to fly out and work in difficult situations at the drop of a hat. I am only flexible about my rate if they are not prepared to pay expenses (the rate only increases, never decreases).

This has everything to do with confidence in your value in the marketplace and the good old supply/demand principle.

If you lack confidence in your value or you feel that there are not many jobs out there to replace this one, then drop the price. If you feel that other contractors with your skillset would accept this rate, then drop your price.

I have niche skills, experience and confidence that the end-client will value my work, rates and all (and can show this with extentions to every contract I have worked on).

There is one very important exception to this rule, and it ultimately benefits you, not the agent.

If you don't have any of the above, begin by looking in Jobserve to see what skills do get the good rates then get the proper training in those skills. You can then winkle your way into a contract by accepting the lowest rate you can afford to sell yourself, for 3 months only. Agents who are desperate to get people in with unusual skills will not mind if you don't have the experience provided you are confident that you can do the job.

And I don't give a t0ss about your cowboys, abc - ultimately that's the low end of the contract market. If they muck me about I'll not touch them with a barge pole, I like to see barrow-boys sweat. I keep my professional agents who get me jobs (and don't stiff the client) close and friendly.

Sounds like you are in a good niche there. I am not jealous.

I am broader based myself, so I have to compete against a corresponding broad range of people. Even so I regularly turn offers down. I have no problem getting offers, just offers honestly dealt with, because this part of the market is infested with cowboy agents. I have seen too many hard-working people messed around by the cowboys to remain cool about it.

That’s the bad side of it; the good side is that technically I enjoy the fast-moving ever-changing nature of things in this part of the market, so when I am on a job I have good job satisfaction. I enjoy the work itself a lot.

I take your point about moving to a more niche area. I have considered it and might well go that way in the future. My younger brother is in a niche and he has always earned more than me!

[Ardesco]

Unless an agency is using a fixed rate, which seems to be rare, my take home rate and the marginal increase in the agency rate, that they get when they rip me off, are clearly directly related.

In simple terms, I get (say) 5/hour less, in order that they can get 5/hour more.

For newbie contractors who get 20/hour for a 40/hour gig this is of course even more "troublesome".

The point that I am trying to make is that you take a contract that pays you a rate that you are happy to work for. If you are happy to work for £300/day it makes no difference if the agent is charging the end client £350/day or £500/day. That is the contract the agent has drawn up between themselves and the end client. If you are willing to be bullied into accepting £5/hour less than you want then all that means is that you are not as good a negotiator as the agent.

At the end of the day you are not forced to accept a contract, if you accept the rate you are offered you have nobody to blame but yourself.

At the end of the day it is a business and the agent is not there to get you a fulfilling role that you love and makes you rich, they are there to get as much money as they can from the end client while paying you as little as posssible making thier business as profitable as possible.

I must admit it riles my slightly that the agency is in effect getting money for my work, but unless you are going to get all of your contracts direct with the end client you don't really have much choice. The best thing to do is forget about the agency and thier cut and focuss on the money you are bringing in for yourself. Life is too short to get completely stressed about something that isn't going to change no matter what you do anyway.

[tim123]

The point that I am trying to make is that you take a contract that pays you a rate that you are happy to work for. If you are happy to work for £300/day it makes no difference if the agent is charging the end client £350/day or £500/day.

Yes it does.

In general:

A client paying 300pd has 300pd expectations.

A client paying 500pd has 500pd expectations.

As a contractor, I need to know what the clients expectations are in order to consider if I am the right man for the job. Usually the only way I can determine this is from the rate.

tim

[brentmeister]

flexibility

Flexibility only goes one way for the contractor:

Down