Extension on reduced rate - getting agent to reduce commision - thoughts please!

[Glencky]

This is the key to it all. Through no fault of your own, you're worth less than you were six months ago as a contractor. That's just the nature of a supply and demand economy. Rates have gone up and down over the years by both location and skillset. Ride the rough, enjoy the smooth (oo-er).

Yes. Appreciate my OP didn't at all convey this, but I've always felt the same. And it's the same with house prices too. The way sellers sometimes hold out over relatively small amounts, or stick over whether the fridge (etc) is included or not, always blows my mind, when if it was a commercial decision they were making in a business, it'd be insane.

House prices. Something else that's going to be very pertinent for a while, I should think.

[Stevie Wonder Boy]

Hi all, looking for collective wisdom or experience that might help me. Might not be much to say over what I already know, but worth an ask.

Situation:

Current contract was due to end early April, but was boomed for 2 months due to COVID (I know - lucky). It now appears they want me to stay to do an entirely new and different project, also kicked off as a result of COVID. But there's a catch - only on a reduced rate. I'm actually fine with it. I know the lay of the land enough to know it's not a heinous attempt to shaft me. I'm on a good rate at the moment - if I dropped 20% I'd be about midrange for many large organisations' rates for my role and level.

I know the hiring manager from a previous organisation where they were also my hiring manager, which is how I got this gig - we have a good relationship. So far we've agreed in principle that hiring manager has a new opportunity and I'm potentially interested. Hiring manager has highlighted it can't be on the same rate, and gone off to work out what they can do and come back to me. If it doesn't work out, I'm confident there'll be no hard feelings either way.

I'm better off than many right now: I'd been planning a break after this contract which I planned financially for. However I'm realistic/ pessimistic about the market for the next.. well, N years. There'll be opportunities for contractors because there always are when times are volatile - but lots of us are going to be out of work for periods, I think. And rates will likely (on average) be depressed. So, I'm totally open to continuing same organisation for a lower rate in a different role. (sidenote: IR35 is irrelevant to me as I choose to operate inside and always have done, so if anyone thinks of any aspect of this that's IR35-relevant, it isn't!)


Question/ help

How best can I approach negotiating with the agent to reduce their commission to soften the blow of an extension with a rate cut?

I'm currently through a large agency, who have done nothing on this contract other than invoice for me. They did nothing to 'find' me as I had the prior relationship with the hiring manager, so they've had a lucky break and good deal throughout with me. Hiring manager already knew me and I'd been interviewed by 2 people, offered the role and accepted before the agency even knew I existed. So all they've done is onboard me and obviously provide the admin. Whatever fee they're on, they're not earning it much! (although it has to be said they've generally been good and I've nothing against them).

Assuming hiring manager comes back to me with something I'm prepared to go with, I want to tell the agent I'll take it if they'll effectively increase my rate by splitting the difference with me on their fee/ commission.

I have no idea in this contract whether the agent is on a fixed daily fee or a percentage. As a hiring manager I've had contractors on a percentage or a flat fee of somewhere under £100 a day on top of the contractor's day rate, but it's been a few years since I've been in a role where I had that visibility and I've no idea what's happening in this organisation (where I'm one of the only contractors to the point where I don't know any others).

Anyone ever done this and got any thoughts? My start point is I'll simply have the conversation with the agent but wondering if there's anything else I should be thinking about.

I would ask if the client if the agent has a fixed fee arrangement with the client, if not I would see if there are other agencies, if so, I would basically bid them against each other.

Barring that I would just ask the agency and see if they will take a lower commission, it doesn't hurt to ask.

[rootsnall]

Before you haggle with an agent about money ask yourself are you prepared to walk. If you aren't I wouldn't bother.