Value Added By Agencies

[MrMarkyMark]

I worked on a project where this was the only reason that the consultancy were brought in - they came in mid-way through the project, client paid £3 million more than the current budget, and they kept most of the contractors on to do the job. The advantage was that when things went wrong, they had someone with a big name and big pockets that they could blame and sue.

That is exactly why I'm on a repeat where I am now

The other good part for the client is they can use other projects, run by the same consultancy at Client Co, as leverage to get the thing done and dusted.

[malvolio]

There's also an accounting difference between fixed costs and temporary expenditure...

[MrMarkyMark]

There's also an accounting difference between fixed costs and temporary expenditure...

Indeed, good point Mal, forgot that one

[MaltSokol]

This is just part of it.

[...]

Do you have administrative staff to look after all five hundred contracts, work with HMRC to discuss potential inside and outside IR35 issues?

Another scenario: you upset a key contractor in some shape or form; said contractor downs tools because they're peed off with you and tell the client. This guy is mission critical and you potentially lose the client. What do you do?

Thanks for your unhappy scenarios But I think something is being missed in translation

Recruitment consultancies face those very same risks and they are viable businesses. What I'm suggesting is the same thing as an agency for contractors, but without offering candidate search. This hypothetical company would start working for the client once the team have decided to hire a candidate that has been referred directly by a colleague, and the client can't or won't engage them directly (or offers payment terms not suitable for the contractor, etc...). From this point it would act the same as a recruitment consultancy.

Costs are obviously lower because you don't need to have consultants going through 100 potential candidates per day, micromanaging the recruitment process for each candidate, or canvassing clients for new roles.

For this reason I'm exploring if a better commission can be offered since this is not the full service clients are used to.

The rest is the same: candidate compliance, legal, risk, billing, accounts receivable, etc. I'm trying to work out what the weight of the candidate sourcing part is in the cost structure to see if its feasible to offer a sizeable discount of the client fee.

BTW thanks everyone for your insights!

[MrMarkyMark]

Thanks for your unhappy scenarios But I think something is being missed in translation

No, you have just suggested a totally different scenario, than the one you originally posted.

Don't you think we haven't either thought of this, or actually done this in the past?

I have.

Not impossible, but the main difficulty, amongst all the others, is getting on the client PSL.

Unless you do that and I didn't, you will then find Client Co's internal recruiters messing with your affairs.

At one stage we had around 7 on a site and it was going well, then the internal recruiter "got to" the Client Co's permies to try and kill it.

To be frank, I believe you are a little naïve as to how all this works in practice.

[LondonManc]

Thanks for your unhappy scenarios But I think something is being missed in translation

Recruitment consultancies face those very same risks and they are viable businesses. What I'm suggesting is the same thing as an agency for contractors, but without offering candidate search. This hypothetical company would start working for the client once the team have decided to hire a candidate that has been referred directly by a colleague, and the client can't or won't engage them directly (or offers payment terms not suitable for the contractor, etc...). From this point it would act the same as a recruitment consultancy.

Costs are obviously lower because you don't need to have consultants going through 100 potential candidates per day, micromanaging the recruitment process for each candidate, or canvassing clients for new roles.

For this reason I'm exploring if a better commission can be offered since this is not the full service clients are used to.

The rest is the same: candidate compliance, legal, risk, billing, accounts receivable, etc. I'm trying to work out what the weight of the candidate sourcing part is in the cost structure to see if its feasible to offer a sizeable discount of the client fee.

BTW thanks everyone for your insights!

I'm not sure from your response if you'd realised, but none of my scenarios concern the recruitment/resourcing process. I'm talking purely about onboarding a contractor and then managing them.

Don't forget that you'll also need to write off all costs incurred for candidates who have two gigs in the pipeline and simply don't show up at yours on their due start date. Again, an onboarding issue once you believe the right candidate has been selected. Less of a risk where candidates have been approached directly but sensible contractors don't down the search tools until they're logged on and working at their new client.

[MrMarkyMark]

I'm not sure from you're response if you'd realised, but none of my scenarios concern the recruitment/resourcing process. I'm talking purely about onboarding a contractor and then managing them.

Don't forget that you'll also need to write off all costs incurred for candidates who have two gigs in the pipeline and simply don't show up at yours on their due start date. Again, an onboarding issue once you believe the right candidate has been selected. Less of a risk where candidates have been approached directly but sensible contractors don't down the search tools until they're logged on and working at their new client.

He seems to think he will not have to recruit people.
Yes, its great when you can refer a friend etc. its something we have all done over the years.

However, if you were to get bigger, you will have to start recruiting and turn to the job boards at some point.

[LondonManc]

He seems to think he will not have to recruit people.
Yes, its great when you can refer a friend etc. its something we have all done over the years.

However, if you were to get bigger, you will have to start recruiting and turn to the job boards at some point.

Reads to me more like he wants to act like Resource Solutions at Barcap or Adecco at Credit Suisse, where they're the agents for direct recruits. A lot of large places will have it covered in a similar fashion (they're just the two that spring to mind).

OP, can you clarify under what resourcing circumstances you would expect your newco that you've described here would be engaged please?

[MaltSokol]

No, you have just suggested a totally different scenario, than the one you originally posted.

To be frank, I believe you are a little naïve as to how all this works in practice.

I know! just trying to get a grasp of it. And I'd be even more naive if I hadn't asked in the first place. Cheers!

[MrMarkyMark]

I know! just trying to get a grasp of it. And I'd be even more naive if I hadn't asked in the first place. Cheers!

Just passing on my own, albeit slightly bitter experiences.
That is however in the financial world.

I do know people that have formed small consultancies, which is what you are actually describing, in other sectors.
Can be done in Finance too with the right friendly senior executive support.