What is a fair cut for an agency to take?

[abc]

I'm interested in what people think is a fair percentage that an agency should be able to take (either a maximum figure or a range).

The reason I'm interested is of course because the range seems to vary quite a bit in my experience.

I'm not after any agency names with this. I just want any actual discovered figures (just the numbers) and any realistic opinion on what the fair range should be, as a percentage.

[expat]

I'm interested in what people think is a fair percentage that an agency should be able to take (either a maximum figure or a range).

The reason I'm interested is of course because the range seems to vary quite a bit in my experience.

I'm not after any agency names with this. I just want any actual discovered figures (just the numbers) and any realistic opinion on what the fair range should be, as a percentage.

"Agency"? "Fair"?? It-does-not-compute.

[abc]

"Agency"? "Fair"?? It-does-not-compute.

I know what you mean, as I have had some bad experiences as well.

But having said that, there are still some agencies who make the effort to be open about their cut. Other times they are forced into it by the client. So it is useful to know what a reasonable figure might be in these situations.

I myself have heard of figures such as 12% to 15% as being reasonable figures.

[boredsenseless]

"Agency"? "Fair"?? It-does-not-compute.

Agreed, there isn't a fair percentage. The percentage an agent takes never reflects the amount of work they have to do for your single contract.

Instead the percentage covers a multitude of different things:

a) Office overheads
b) Dealing with contractors who fail in their application
c) Chasing company leads that fall through
d) The amount of time historically invested in the client relationship.

If you can't or won't go direct to the client to source your gig, then what % the agent gets shouldn't really be the question. The correct question is how much of the agents agreed rate should be I able to charge for my services after all it isn't your contract its theirs, they own the relationship.

I know that agency cuts seem high, but I used to know a very good one quite welll who wouldn't even entertain placing someone she couldn't make 16% or more on. And when you consider that large consultancies insist on a 30% uplift between their billings and your rate it starts to seem cheap.

Finally just for ratewhore -- When you ask a plumber to do a job you know that the rate you pay includes amounts for the time he spent giving you a free quote and the time he spent giving a quote to others who didn't take him up on the offer, agents are just the same they have to offset the lost revenue somewhere and your contract gives them the opportunity.

[Cowboy Bob]

A fair percentage is whatever they can negotiate on top of the rate that you'll accept the contract at.

[tim123]

a) Office overheads
b) Dealing with contractors who fail in their application
c) Chasing company leads that fall through
d) The amount of time historically invested in the client relationship.

e) Cleaning up the mess left by a contractor who walks off site with zero notice.

The above directly cost my last agent over 10K. More than they would have earned from him had he stayed for a year insted of six weeks. This expense wasn't paid by him, it was paid (partly) by me!

tim

[malvolio]

A fair percentage is whatever they can negotiate on top of the rate that you'll accept the contract at.

Wrong. The price for the job is set between them and the client. You get what's left after they take their cut. Very rarely is the price for the job set by the contractor.

As for the original question, I've been talking to some agency bosses on a related subject: the general concensus is that they cannot run the normal business at much below 10% for the City or perhaps 8.5% outside it: to go lower requires that they have preferential payment terms from their clients to de-risk their cashflow.

[abc]

e) Cleaning up the mess left by a contractor who walks off site with zero notice.

The above directly cost my last agent over 10K. More than they would have earned from him had he stayed for a year insted of six weeks. This expense wasn't paid by him, it was paid (partly) by me!

tim

Sorry to hear that.

But don't they have insurance for that sort of thing?

[lukemg]

Spoke to an agent once about if I had a contract job on a plate, what % he would manage it for (co wouldn't deal direct). He said he would do it for 5%. My first contract, they were getting 20, all the rest have been between that and 10 (after about 5 years of squeezing the rate at every renewal, they had had plenty out of it)
PSL's are usually between 8 and 15 I believe. Anything up to late teens wouldn't stress me as long as the rate I got was acceptable, anything more than that I would be trying to get my rate up.
Yes it does matter what you are being charged at to the company.

[abc]

Wrong. The price for the job is set between them and the client. You get what's left after they take their cut. Very rarely is the price for the job set by the contractor.

As for the original question, I've been talking to some agency bosses on a related subject: the general concensus is that they cannot run the normal business at much below 10% for the City or perhaps 8.5% outside it: to go lower requires that they have preferential payment terms from their clients to de-risk their cashflow.

Thanks for responding to the original question

That is interesting, 10% or 8.5% are lower than I previously thought possible.