The Experiment - Agencies charging 30% - Live Test Scenario

**NotAllThere** · 17 February 2016, 06:14

I don't know why you're portraying this as some exciting opportunity to gain something new. You're privvy to important information, and you've got two offers. Therefore you are in a strong negotiating position. Nothing more than that.

I'd aim for 15-20%. Then at renewal, reveal that you know their margin, and you will walk if they don't reduce it to 10%. They then have a choice to reduce, or go through all the uncertainty and expense of getting a new candidate.

**FrontEnder** · 17 February 2016, 08:55

get both agents on a conference call and get them to start a bidding war.

**GB9** · 17 February 2016, 09:01

Neither may get 30% from the op, but unless careful, they will likely both get it from someone else.

Rather than commenting on their margin I would suggest to each that you have another offer, you would prefer to do their role, but question whether any movement on rate is possible. That way you should get at least one of the roles, if you want it.

**Unix** · 17 February 2016, 09:01

Originally posted by GideonTheIdiot View Post

Hi all,

fairly unique situation - I have 2 offers for 2 contracts both paying the same.

Weirdly, at both interviews, I saw the agency's coversheet with the true price they are charging the clients.

Both agencies are taking 30% of the contract value. (or trying to, they won't get it)

Experiment Scenario:
Neither role is worth getting excited about so this is the perfect time for an experiment with living subjects! The situation deserves some exploiting for the purposes of research into the strange behaviour of the subspecies known as an agent.

First up - neither agent is getting their 30% because if neither of them negotiate then I won't do either contract.

Secondly - Any suggestions as to best strategy for how to manipulate both agents into cutting their margin to ... what? 10% is the absolute max I will accept them taking from my hard work's rewards.

Or maybe we can collectively come up with a strategy to argue them down to 0%, playing one off against the other etc etc.

Hell why not even a negative margin of 10% in these deflationary times! We're all in this together after all.

It's got to be some quick suggestions though, the experiment will only last 48 hours or so, although I could maybe string out the negotiations since one of the clients really wants me to start with them, (I'm not that bothered)

Anyway time is short - who is up for putting a plan together to reduce the agent's margin to 10% or less? Prizes for whoever comes up with the most effective strategy as judged by the resulting margin reduction.

Can any agent confirm that a 30% margin is a pure brassneck trying it on, and whether 10% is a reasonable / normal margin? Another agent of mine says 10% is the lowest he can go to cover overheads, he is a one / two man company however.

I would make them take a negative % so they have to contribute from their on salary to your daily rate.

**clearedforlanding** · 17 February 2016, 09:04

Originally posted by NotAllThere View Post

I don't know why you're portraying this as some exciting opportunity to gain something new. You're privvy to important information, and you've got two offers. Therefore you are in a strong negotiating position. Nothing more than that.

I'd aim for 15-20%. Then at renewal, reveal that you know their margin, and you will walk if they don't reduce it to 10%. They then have a choice to reduce, or go through all the uncertainty and expense of getting a new candidate.

+1. We pay 12.5% but our volume is high. 15-20% is fair. Anything higher and the client's expectations are set too high by the agency's price point.

**TheFaQQer** · 17 February 2016, 10:05

Originally posted by GideonTheIdiot View Post

Secondly - Any suggestions as to best strategy for how to manipulate both agents into cutting their margin to ... what? 10% is the absolute max I will accept them taking from my hard work's rewards.

Or maybe we can collectively come up with a strategy to argue them down to 0%, playing one off against the other etc etc.

Hell why not even a negative margin of 10% in these deflationary times! We're all in this together after all.

Get them in a fighting pit - two agents, one knife, winner takes all.

That's as likely as any of your other suggestions, or indeed of this being genuine.

**OnceStonedRose** · 17 February 2016, 11:15

I normally know/agree rate im gonna be put forward at, if its an agency in middle, prior to being put forward.

If in "interview" i saw that they were charging me out at shed load more id probably just say eff it and make a decision to either suck it up, i knew my rate beforehand and was ok, or to sack it off on principle of some slimey agency trying to take advantage.

Haggling after I've agreed a rate is pretty much same as "welching" on a bet, not on i reckon.

**GideonTheIdiot** · 17 February 2016, 20:52

Originally posted by NotAllThere View Post

I don't know why you're portraying this as some exciting opportunity to gain something new. You're privvy to important information, and you've got two offers. Therefore you are in a strong negotiating position. Nothing more than that.

I'd aim for 15-20%. Then at renewal, reveal that you know their margin, and you will walk if they don't reduce it to 10%. They then have a choice to reduce, or go through all the uncertainty and expense of getting a new candidate.

Nice work, - your punt was correct for one of the agents - came back with 17% just like on the other recent thread about renewal.

I'm being sarcastic above - I'm not getting excited but the situation is just about interesting enough to post about, never had such access to the other side of the negotiation before, now things like advertised rates on Jobserve are starting to make sense:

Agent 1 offered his role on Jobserve at a range of 70% to 80% of the charge out rate. Then when I applied, he quoted the lower rate (70% to me, 30% to him). Today this was changed to 17% on threat of better offer. They said "The client won't pay any more than what we've offered", I said "I'm not asking them to." He understood the subtext well enough and the result was 17% as their best offer.

Agent 2 offered his role on Jobserve at 100% to 70% of the charge out rate (ie he quoted a range of rates including one of zero commission for him - dishonest already). I applied, and he put me forward at 80%, then after I easily got the job following one interview, he called me to say that, unfortunately, the rate is now lowered to include his cut ie it's now 70%.

When I asked Agent 2 why the rate had been lowered, he lied and said that the end client had told him they would not pay his original rate he tried to offer me, the client had suddenly reduced their budget and he had simply reduced my rate accordingly.

I called the client directly and confirmed there had been no such reduction, and they wouldn't be allowed to do that anyway, as a fairly prestigious charity, they have to be careful not to fall foul of anything that might put their reputation at risk. This is actually now the 3rd time he has provably lied to both me and them.

Anyway that's 2 agent tactics to be aware of -

(1) Advertise big rate, reduce just before interview, preferably in a quick sentence over the phone like "and i'm putting you forward at the rate we agreed which is (rate minus 30%) OK? Good Luck tomorrow..."

Before you realise it, you've accidentally agreed to minus 30% before you even negotiated.

or

(2) Advertise big rates - right up to 100% of the contract value.
After application from a decent candidate, reduce offered rate to 80%
After offer from client, reduce offered rate to 70%, blame the client since candidate is happy to get an immediate start and is mentally already at their desk. Make the reduction in the rate sound like it is a make or break condition of getting the job ie either accept 70% or get nothing.

The obvious counter-tactic is to get the offer from the agent, think about it for a day, then say you have been offered a better role with a rate of 40% over whatever rate they just quoted to you for the real offer. This takes you over their charge out rate and forces them to negotiate, unless of course deflation takes hold, but that's another discussion...

**GideonTheIdiot** · 17 February 2016, 21:07

Originally posted by GB9 View Post

Neither may get 30% from the op, but unless careful, they will likely both get it from someone else.

Rather than commenting on their margin I would suggest to each that you have another offer, you would prefer to do their role, but question whether any movement on rate is possible. That way you should get at least one of the roles, if you want it.

They won't get it from someone else because I'm the only candidate for both.

Both clients want me as a contractor while they recruit permanent staff. If I don't accept the contract it will be withdrawn and they will struggle on until they can fill the permanent roles, or until more money becomes available. You can probably guess what sector I'm talking about, given those criteria.

Anyway the "I've got a better offer" worked, (it's true after all), I didn't really need any more sophisticated strategy than that.

However I thought it might have been interesting to try to have some fun with 2 scumbags trying to rip off charities which exist to help orphaned children. Special place in hell for them I think.

I see from the above posts that there are some children on this forum talking about farts - why bother posting on a forum about contractor jobs when you are below the legal age to accept an employment contract?

The Experiment - Agencies charging 30% - Live Test Scenario