Agency rates negotiation

[starburst89]

Correct. The negotiation is about reducing the agents profit margin. The client will likely have a rate card and that's it. The wiggle room is how much you can take off the agent. Newbies often get stung very hard and can easily be 20% upwards because the new guys just don't have a clue.

If they are on a fixed margin then there is no negotiation so much easier and their margins are pretty low already.

Thank you very insightful.

The agent put me forward for 450 without discussing with me and just went on my previous rate which was lower than 450 but that doesnt mean I agree with the 450. The rate was advertised as between 400-600 but I was told the top end was for project manager level. If so then why advertise the rate for analyst level.

Now the question is do I leave the agent thinking I am happy with the 400, go to the interview try and secure the role and then negotiate with the agent for higher? Or do I do it before interview...

[MrMarkyMark]

The rate was advertised as between 400-600 but I was told the top end was for project manager level. If so then why advertise the rat for analyst level.

Now the question is do I leave the agent thinking I am happy with the 400, go to the interview try and secure the role and then negotiate with the agent for higher? Or do I do it before interview...

What are you, an analyst or a project manager

Up to you when you decide to negotiate, but you need to know exactly what you are first

[LondonManc]

Thank you very insightful.

The agent put me forward for 450 without discussing with me and just went on my previous rate which was lower than 450 but that doesnt mean I agree with the 450. The rate was advertised as between 400-600 but I was told the top end was for project manager level. If so then why advertise the rate for analyst level.

Now the question is do I leave the agent thinking I am happy with the 400, go to the interview try and secure the role and then negotiate with the agent for higher? Or do I do it before interview...

Negotiate beforehand. If the client thinks you're a £450 a day candidate and you get it on that basis, there may be a better £500 a day candidate there. You might ask the agent why you're being put in at what you are. He won't tell you the truth anyway, so it's only going to be to receive some platitudes.

Personally, once I've started the first contract, I'd advise the second one that I've just secured something else that was a more immediate start. Don't turn them down until you've logged in at your new gig though.

[VillageContractor]

You can try and negotiate once you've got the role but you've got be willing to play hardball. It's easier as your already in a role and not desperate.

All depends how big your pair is

[northernladuk]

You can try and negotiate once you've got the role but you've got be willing to play hardball. It's easier as your already in a role and not desperate.

All depends how big your pair is

Totally this. The agents do this for a living and know in 99.9% of cases you'll back down. It's not just a matter of asking, they say no and you back down. You've got to be prepared to walk and if the agent gets a sniff you won't he'll not budge.

[Cirrus]

He did originally say that its also in their interests to get me the best rate as then they get more

I know a lot of people disagree but from my experience I would say that for most contracts the more you get, the more the agent gets. It is normal for agents to be on a fixed margin. The reasons for this are a) the client wants the best deal and ii) they really don't want the hassle of contactors finding out they're being ripped off and arguing about money instead of getting on with the job.

The reason agents are inclined to pitch you low is they only get their margin if you get the job. Clients are usually tight on budgets so it's in the agent's interest to make sure you are not overpriced.

[northernladuk]

I know a lot of people disagree but from my experience I would say that for most contracts the more you get, the more the agent gets.

You've got this the wrong way around. You get a cut of the agents money. You get more if the agent gets more (or maybe not in some cases but you know what I mean)

It is normal for agents to be on a fixed margin. The reasons for this are a) the client wants the best deal and ii) they really don't want the hassle of contactors finding out they're being ripped off and arguing about money instead of getting on with the job.

No it's not.

The reason agents are inclined to pitch you low is they only get their margin if you get the job. Clients are usually tight on budgets so it's in the agent's interest to make sure you are not overpriced.

I think you've got this one wrong as well. The client has a rate card and will pay whatever they want to. The agent then rips the contractor off. The agent will know exactly how much the client is willing to pay from the first conversation. I don't think it's that common for agents and clients to negotiate. There is nothing to negotiate over really as they don't have CV's to be able to decide who's worth it and who isn't until after the agent has started his work.

It's hard to get an idea from just a few lines but I'd say you are not fully understanding the mechanics of the client-->agent--> contractor arrangement properly or your experience has been a little different.

[LondonManc]

I know a lot of people disagree but from my experience I would say that for most contracts the more you get, the more the agent gets. It is normal for agents to be on a fixed margin. The reasons for this are a) the client wants the best deal and ii) they really don't want the hassle of contactors finding out they're being ripped off and arguing about money instead of getting on with the job.

The reason agents are inclined to pitch you low is they only get their margin if you get the job. Clients are usually tight on budgets so it's in the agent's interest to make sure you are not overpriced.

Depends very much on the model that the client and they agree upon.

Larger places tend to tie the agent to a fixed percentage markup, meaning that, in theory, the end client get what they pay for in terms of a quality v cost model. Other places get shafted by agents who say, "oh, one of those type will be £500/day", then sell some poor mug in at around £300/day. Others do operate fixed margin, e.g. £50/day so that it's transparent all the way through, but I've only ever seen that once.

[MrMarkyMark]

No it's not.

In Inv Banking, its often x%, then reduces year by year for longer engagements, after 2 years it's usually around 5-7%.
However, less common in other industries I've worked in.

[northernladuk]

In Inv Banking, its often x%, then reduces year by year for longer engagements, after 2 years it's usually around 5-7%.
However, less common in other industries I've worked in.

Yep for big clients with incumbent agents but that to say it's normal for contracting is incorrect.