Negotiating agency commission

[northernladuk]

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.

How often does this actually happen in reality though. The client pays contractor rates for some to come in and do a sterling job. Thats not justification and I'd be a bit pissed if a contractor tried that one.

[silverlight1]

You need to put a justification together if you intend to do this IMO.

I recently got a substantial rise for a contract extension and this rise was based on the agency cutting it's fee plus the client paying a bit more.

My justification for a rise was based on the results achieved after 6 months in the role (programme stabilised, 2 projects successfully delivered with £xm of business benefit banked etc. etc)

I spoke to both the agency and client in person explaining this.

Agency was mature about this and wanted to keep both contractor and client happy. They cut their rate from 16% to 10%

Everything is always negotiable sometimes you will cut a deal, sometimes not

[SlipTheJab]

You need to put a justification together if you intend to do this IMO.

I recently got a substantial rise for a contract extension and this rise was based on the agency cutting it's fee plus the client paying a bit more.

My justification for a rise was based on the results achieved after 6 months in the role (programme stabilised, 2 projects successfully delivered with £xm of business benefit banked etc. etc)

I spoke to both the agency and client in person explaining this.

Agency was mature about this and wanted to keep both contractor and client happy. They cut their rate from 16% to 10%

Everything is always negotiable sometimes you will cut a deal, sometimes not

10% of a higher rate meant the agency probably didn't lose out money wise

[GillsMan]

Agree with others - 16% isn't particularly high. 8% is about as low as you'll get, but you often here of cases of agencies charging 20-25%. If agency cut was, say, 25% then maybe see if you can get them to come down.

You could ask them to come down to 10%, and if they agree that's 4% extra in your pocket. But as others have pointed out, they may be on a fixed margin, and they also provide services such as factoring. I have clients that are direct and a couple of clients through agencies at the moment. Trust me, the agents are worth their commission as they are by far the better payers. My direct clients rarely pay on time - the agents are nearly always on time.

[SlipTheJab]

Asking for an increase after 6 months is a bit rich really, at least a yr (with a couple of renewals thrown in) is more realistic. Have you looked at other ways of improving your lot. At a previous place I was at the commute was a killer so I negotiated a day WFH (no one worked from home) as it meant more to me that a few extra quid. You could threaten to leave but if the agency calls your bluff you WILL have to jog on. If you back down and stay even if they turn your request down you'll look a bit of a pillock.

[Normie]

Agree with others - 16% isn't particularly high. 8% is about as low as you'll get, but you often here of cases of agencies charging 20-25%. If agency cut was, say, 25% then maybe see if you can get them to come down.

If you're with a big agency supplying many contractors on a PSL the rate can be even lower - mine is currently under %4.

[quackhandle]

would that 16% have been agreed at top level between pimp and client? Ie - no power to reduce regardless of how hard contractor is working.

qh

[psychocandy]

In my experience, getting agent to cut rate down from 16% = NO CHANCE.

If you push it, even if you push it a lot, and even if you say I want you to cut the rate not ask the client for more, they'll still possibly ask the client. Which may not be what you want. Agent knows that then they look like the good guys and you're greedy forcing them to tap up the client for more money.

In agents head why should they cut it, to say 10%? If they say 16% still or no deal and you walk they just tell the client you were trying to blackmail them (see above) but not to worry we'll get a replacement in by the end of the week. (This works especially well if they're sole agent).

Agent then gets 16% off the new contractor - possibly more.