Introduction-only agency

[cloudcontractor]

Do you know what factoring is?

Yes that's an easy one. When I'm researching agencies I often take a look at their accounts as it gives a hint of what kind of factoring underwriting they have. In this respect having a gf who's an accountant is very handy.

[edison]

Or perhaps they undertake some unfathomable scope of work that I'm not seeing. Or perhaps what seems complex and valuesome to you is trivial to me.

Agencies engage with a client.
Agencies spam linkedin for people with matching keywords and collect CVs.
Some CV filtering (more or less depending on how competent they are at spamming in the first instance)
CVs to client, short list to interviews.
Offers, or not.
Boilerplate contract.
Contractor starts, agencies get paid, pay contractor.

Admin aspects in between but nothing that's not pretty simplistic lifting.

Yes that's an easy one. When I'm researching agencies I often take a look at their accounts as it gives a hint of what kind of factoring underwriting they have. In this respect having a gf who's an accountant is very handy.

I think you're underestimating the work involved in client engagement and winning new business. The recruitment sector has low barriers to entry, little differentiation and low/non-recognised standards of competence/qualification. These two factors probably help to explain why specialist IT recruitment is the lowest gross and net margin recruitment vertical according to industry benchmarks.

The type of service you describe is the lower value add end and lower margin end. The bigger margins are made on higher paying roles and especially on permanent roles.

Who knows what will happen once the dust settles from the IR35 changes next year. My guess is that a lot of smaller recruitment companies on lower margins won't survive. Maybe a new model will start to emerge but I don't think the one you're suggesting would be it.

[northernladuk]

Won't solve the OPs problem but last agency had an interesting model. Fixed rate so no chance of upping my rate at renewals but they had a sliding scale of cost to the client. Their rate goes down over a year (or a bit more) and eventually they don't charge client for longer term contractors.

I thought that was quite refreshing. Makes no difference to me but good value for a client. GSK, Lloyds etc would save a fortune on that model.

[Cirrus]

Are you related to Boris? I bet you voted Brexit

So I take issue with a very negative IT WORKS AS IT IS STOP BEING A BRAT response because it's both incorrect and weirdly defeatist to presume no improvements are worth making.

You bring up a big subject. You say virtually nothing about what your model might be. There are hundreds of other factors in this business apart from an agent identifying a candidate, and providing a contractual framework for engagement.


People have gone through this frustration for decades and all that happens is outsourcers steal your lunch.


The same sentiment has also cropped up a thousand times on this channel.


Most contractors get it that this is a market and they have to compete in it to their best capabilities, in doing so they mostly are trying to out-manoeuvre another contractor. It's very often a zero sum game; you make changes to the game and different people win, but you don't know whether that gives you a better chance or a worse one.


Since you have avoided describing what you think the problem is I have to make a guess it's to do with IR35 contract wording and related documentation: they won't do what you want them to do. The simple fact is clients mainly want bums on seats and bums on seats have been declared as taxable by the Government. You may be very keen for customers to engage in games to avoid tax but don't assume their unwillingness to do so is a shared problem. If you get involved in a lead that doesn't provide you with the IR35 framework you desire, then it's not that they're wrong - not that they need to improve - it's that it wasn't ever a proper lead for you. Move on and don't complain about the customers.


(When I say 'customer' I mean the end client but more importantly the agency. They are the biggest sales hurdle you have to jump normally)

[edison]

Won't solve the OPs problem but last agency had an interesting model. Fixed rate so no chance of upping my rate at renewals but they had a sliding scale of cost to the client. Their rate goes down over a year (or a bit more) and eventually they don't charge client for longer term contractors.

I thought that was quite refreshing. Makes no difference to me but good value for a client. GSK, Lloyds etc would save a fortune on that model.

This is more common amongst interim providers, say rates £800-£2000/day plus. Typically it kicks in at 12-18 months. Given the low margin nature of a lot of recruitment, you can see why it doesn't work for high volume contractors at lower rates at the likes of Llloyds.

[cloudcontractor]

You bring up a big subject. You say virtually nothing about what your model might be.

Since you have avoided describing what you think the problem is I have to make a guess it's to do with IR35 contract wording and related documentation

As previously stated, I am not proposing a model. I'm starting a discussion. Do you have any contributions which aren't generic naysaying whilst simultaneously being an endorsement of the status quo?

But I'll bite for a moment, since IR35 complaints are common. If a contract was advertised as inside IR35, and I simply wanted to be outside, and threw my toys out of the pram on that basis, you'd be absolutely right in your assessment. The arrangements are what they're advertised to be, and if you don't like it you go elsewhere.

Or, you might encounter one of the very many useless agencies who do a song and dance alleging IR35 awareness and compliance, and reassure you that they're on the ball - only to send you a permanent job spec with the qualifier "oh yeah they did want permie at first", and then send you a contract with wording that fails a test, and then won't change it to bring it into line. Then you start on the job to discover the working practices are identical that of a permanent employee and any investigation would correctly cite you as inside IR35. The agency sold you a lie, either wilfully or out of ignorance, knowing that they have no liability because it's all on your neck. They're only panicking now because the liability might shift to the people that pay them and it's got them all nervous, but the liability was always there - they just didn't care before.

So yes, I have a dim view of agencies. Some are clearly better than others, but that isn't saying much.

[jmo21]

* An "agency" that services the contract market but focuses on introduction only. You offer the contractor a variety of domain-specific templates for IR35-compliant agreements and do effective selling to convince the client these are just as good as any contract that an intermediary would provide.
* Contractor agrees directly with client terms that would be as resilient to HMRC investigations as possible, both in working arrangements and contract.
* Contractors get to negotiate terms directly although the goal would be to default to a mutually compatible arrangement that protects and satisfies both.
* Agency takes the finders fee, but isn't an intermediary, no ongoing involvement, no liability. Agency might also upsell something like timesheeting and payment logging services, on the assumption that client/contractor won't have anything set up themselves.

Feasible? Issues to overcome? Incorrect assumptions? Would clients be interested on the grounds that it would clearly reduce costs whilst being offered more direct control over IR35 concerns? Currently the client relies on the intermediary to be supplying a contract that won't cause issues down the line?

As usual, I've had another terrible experience with a hopelessly incompetent agency and I need some catharsis by thinking of better ways this could be done.

*most* client co's want an agency in between to keep the contractor at arms length. You are immediately targeting a very small number of contracts. (settle down hordes, I know some of you have/had direct contracts)

OP - you are not the first person to suggest this type of thing on here, hence the grumpiness of the regulars, but your very first question is if it's feasible.

IMHO (and others), the answer is no.

Another way to look at it is this. Client co's can already advertise on the job boards, via LinkedIn, and their own websites. All of those provide a route to hiring contractors directly. Your idea is just another type of agency.

And existing agencies ALREADY provide the basic service you describe on top of their normal model.

[hgllgh]

And existing agencies ALREADY provide the basic service you describe on top of their normal model.

Why would they do that if it compromised their existing model? Which agencies?

[fidot]

Using agencies means that clients only
deal with a few invoices rather than many.

[jmo21]

Why would they do that if it compromised their existing model? Which agencies?

I didn't suggest it compromised their existing model. I don't think the OP's suggestion threatens the agency model at all.

I don't maintain a list of what agencies do, but I believe many of them (all?) offer the basics of what the OP suggests (intro only, fee paid, no take of day rate).