Agency rates

[DodgyAgent]

I just landed a bit of work that an agent missed out on because of his greed.
I was contacted by the agency before Xmas, for a role, I told him my rate excluding expenses. He kept pushing and pushing that the client wanted an all-in rate. After a bit of research I added £150 to my daily rate to cover expenses (flights and city centre hotels). He came back to say my rate was too high.
Through a network of contacts, I was offered the same contract direct, without the agency, at my original rate, plus all expenses. The consulting firm have no problem booking and paying for all my travel and accommodation.

The agent must have felt he wasn’t making enough off my rate, so wanted to bump it up with an all-in rate to increase the value of his margin. His greed got the better of him, the client is more than happy with me and my rate, I am happy too!!

It is interesting how one person's earnings are "greed" yet another person's earnings are apparently legitimiate. If you want to use emotive words such as "greed" then maybe you could take a look at yourself first.

The point is nothing to do with "greed" it is to do with negotiation skills. I would far rather be satisfied with the feeling that I had outwitted the agent than calling ghim greedy. It could be quite easily argued that you yourself are the "greedy" one here.

[tim123]

Pedro's comments on all-in rates are very interesting - I'd never thought about it like that. Obvious now, really! I get a lot of calls for EU jobs and there's been a recent trend towards an all-in rate versus 'plus expenses'. Now I know why!

(yes, I'm a bit naive sometimes)

My first Euro gig was 15 years ago and I have done several since. They have always been based upon an "all in rate" as you call it. No-one has ever offered me, rate plus expenses. (And no, I wasn't ripped off, everyone that I worked with paid their own expenses).

[tim123]

The agent must have felt he wasn’t making enough off my rate, so wanted to bump it up with an all-in rate to increase the value of his margin. His greed got the better of him, the client is more than happy with me and my rate, I am happy too!!

I don't get this greed comment.

You seem to be saying that the client is more than happy to pay, "your rate plus expenses" direct, but wasn't happy to pay "your rate plus expenses plus agency margin" to the agency.

How does this prove that the agency were being greedy? Do you expect the agency to work for nothing?

tim

[DodgyAgent]

I don't get this greed comment.

You seem to be saying that the client is more than happy to pay, "your rate plus expenses" direct, but wasn't happy to pay "your rate plus expenses plus agency margin" to the agency.

How does this prove that the agency were being greedy? Do you expect the agency to work for nothing?

tim

Quite. but I didnt want to put it like that as I am an agent myself

[gables]

I don't get the problem with the all-in-1 rate;

presumbly you'd quote your original (rate+expenses) = all-in-1 rate, so you're no worse off.

If you're worried by variable expenses how about quoting:

original rate + (original expenses + 10%) = all-in-1 rate - of course you'd need to manage the expenses but that's all part of being in buisness.

Seems to me by going direct you've now exposed yourself to a potentially far longer payment period, again part and parcel of being in business but I don't see how you're any better off, although it probably helps IR35.

[Bluebird]

All in One's sound good, you can always live cheaper than the expenses show...

[pedro]

Expenses were never an issue with the client. They would have happily taken me at my rate, plus the agency margin, and the client would have booked and paid for my travel & subsistence.
The client didn't request an all inclusive rate, they have a travel desk and discounts with several hotel chains, they could probably cover my expenses for £100 a day.

I would have needed approx £150 a day to cover weekly flights, hotel etc, and my small company could not negotiate the corporate discounts that the client could.

The agent was pushing for an all inclusive rate, and then adding his margin. Say an extra £37.50 a day on the £150 on the expenses part alone (at a 20% margin).

So the client is faced with paying my rate + margin plus nearly £200 a day expenses.

The agent wasn't straight with me about expenses, and was trying to increase his margin further. I don’t expect an agency to work for nothing, but trying to make a profit out of my company’s or the client’s operating expense, strikes me (and my client) as greedy.

[Newby]

Maybe its just that I am in a horrendously bad mood, but I find that attitude really frustrating. It sounds like you are an employee, moaning that you didnt get a promotion, rather than a business that got beat on price for a piece of work.

The agent wasted his time in working with you, so he is running at a loss not you. But that is clearly his choice, and if he wants to run his business that way, then so be it. He felt that he could justify charging the client more, the client disagreed. It dont see how you can be in the slightest bit frustrated by this. It is just normal business practice.

Sorry if that is a bit of a personal attack, but i just dont get it and it stinks of a permie doing a contractors job.

[tim123]

Expenses were never an issue with the client. They would have happily taken me at my rate, plus the agency margin, and the client would have booked and paid for my travel & subsistence.
The client didn't request an all inclusive rate, they have a travel desk and discounts with several hotel chains, they could probably cover my expenses for £100 a day.

I would have needed approx £150 a day to cover weekly flights, hotel etc, and my small company could not negotiate the corporate discounts that the client could.

The agent was pushing for an all inclusive rate, and then adding his margin. Say an extra £37.50 a day on the £150 on the expenses part alone (at a 20% margin).

So the client is faced with paying my rate + margin plus nearly £200 a day expenses.

The agent wasn't straight with me about expenses, and was trying to increase his margin further. I don’t expect an agency to work for nothing, but trying to make a profit out of my company’s or the client’s operating expense, strikes me (and my client) as greedy.

You seem to be saying that:

The client was happy with a deal of 500pd to you, plus an agency margin of 100, plus paying 150 in expenses directly (to someone): equals 750 per day.

But the agent wanted a deal of 650 to you, plus an agency margin of 130 quid pd: equals 780 per day.

and they couldn't reach agreement.

So, the client risked not filling his position and the agency risked their margin, over the 30 quid pd that the agency wanted to 'payroll' your expenses, which the client was happy to pay direct if asked.

Sorry, don't buy it.

tim

[pedro]

Tim,

I'm not trying to sell it.

The client would have accepted (at £500pd and a 20%):
£500 + £100 margin + expenses that they book and pay for say approx £100 a day = £700 a day


The agent offered: £500 + £150 + £140 magin = £790

The last project I worked on that involved hotels, the hotel would have cost my company 280EURO per night, the client paid 120EURO corporate rate


I will not go into detail on how my company operates or the services we offer here, but I can assure you I am not a permie doing a contractor job. Nor am I frustrated, quite the opposite.

I was merely posting this to share the fact that when an agent is pushing for an all-in rate it may not be a requirement from the client, and the £X that a contractor adds to cover expenses is passed on to the client at £X+Margin. This could result in missing out on the work.