Agency rates

[DodgyAgent]

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.

well if the agent is having to fund the cash flow for payment of expenses (ie, paying you before getting paid himself) then it is not unreasonable for him to charge for doing so. My own agency does not charge for factoring expenses although if the margin was small anyway we would do so. We prefer that the contractor deal directly with the client on expenses anyway.

[tim123]

Tim,

I'm not trying to sell it..

Yes you are. You've come back and pitched again.

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

Your comment about the fact that the local client can get a better deal on accommodation than a remote agency (which everyone in business knows to be the case) makes it all the more unlikely IMHO that the deal floundered on the insistance of the agency to charge an inclusive rate.

I've been in the position before (more than once) where I knew accommodation would be difficult and expensive and I've asked for client help. The response that I get is "you're a contractor, they expect you to fend for yourself"

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 didn't make this point.

tim

[Agent_Orange]

In my opinion, the percentage an agent takes is irellevent. Neither the client nor the contractor should concern themselves with it. As long as the contractor is happy with his/her rate, and the client is happy they are paying a reasonable ammount for a capable worker, then it shouldn't be an issue.

No one on this bored goes to a pub and buys a pint of Stella for £3.00, then throws a wobbly because the brewery have only paid £1.50 for it. Its all part of a business transaction.

Besides, agents that work well and do their job properly more than justify there percentage.

[DodgyAgent]

In my opinion, the percentage an agent takes is irellevent. Neither the client nor the contractor should concern themselves with it. As long as the contractor is happy with his/her rate, and the client is happy they are paying a reasonable ammount for a capable worker, then it shouldn't be an issue.

No one on this bored goes to a pub and buys a pint of Stella for £3.00, then throws a wobbly because the brewery have only paid £1.50 for it. Its all part of a business transaction.

Besides, agents that work well and do their job properly more than justify there percentage.

"board"

"bored" is what people need to be to post here. The difference is that a pint of Stella is a **** site more useful than a contractor

[MarillionFan]

"The difference is that a pint of Stella is a **** site more useful than a contractor"

Exactly. And a contractor is a lot less likely to beat his wife Dodgy unlike you, you one pint of Stella pimping lightweight!

[tim123]

In my opinion, the percentage an agent takes is irellevent. Neither the client nor the contractor should concern themselves with it. As long as the contractor is happy with his/her rate, and the client is happy they are paying a reasonable ammount for a capable worker, then it shouldn't be an issue.

But here we have an example where it IS important.

The claim by Pedro is that he didn't get the job purely because the agent's margin was too high.

I'm sorry (actually, no I'm not) but I really cannot agree with agent's dribble that "margins are not important to the contractor".

It is bad enough you running this "if you're happy, they're happy" line when you've got the job [1], but where you have a case of not getting the job because the cost is too high, then *by definition* the margin IS important in that equation.

[1] I will continue to argue that the client's/contractor's expectations are driven by the absolute amount that they are charged/paid. Where the margin is high, those expectations don't match. Having personally been given notice on a contract because of such a mis-match, I am not inventing this concern.

tim

[Magnus]

I did a contract in London quite a while ago, in 1998. The agent's advertisement said they work on a fixed rate for all contractors: 20%. Also, they had a deal with the client, a fixed rate of %15.

At first I was getting £40/hr. Some weeks into the job, I saw a copy of my contract on my boss's desk (completely out in the open, open plan office, nothing sneaky and no snooping around): I was being charged out at £55.55/hr. A margin much higher than %15 or %20.

So I phoned my agent straight away, he ummed and aahed and said he'd have to call me back

Several hours later, he came back with a voice which was all hesitant and unsure, telling me that after we agreed on my rate of £40, instead of adding on the margin they should have to calculate what they would charge the client, they goofed and took a figure the client had given them as the maximum they would pay (which was £50k/6 months, or £55.55/hr). At the end, he even asked, "How does that story sound to you?"

I was able to get my pay up to £44.44/hr, which was a margin of 20%. He claimed the %15 deal with the client was only binding on one site of theirs where most of the IT staff were, and I was on another site. Maybe I should have disputed this too, but I was happy with my pay rise which as far as I was concerned came out of the blue. They even backdated it.

[padinka]

Margins *are* important

Because we work in an increasingly competitive market.

If the agent is putting too high a markup on your agreed rate then you will be uncompetitive in the long term. (Of course most agents don't think beyond their month-end bonus so the whole concept of 'long-term' is lost on them.)

Padinka

[mlawren]

I find all this talk of "what the agency makes" very amusing. Do we care what profit margin tescos make on our food shopping, or what British Gas make on your gas or electric bill? It's all about who's doing the selling? Every business exists to make profit for providing products or services to customers. If you don't like agencies, don't use them. Call clients and sell services to them directly. Too hard you say... Then pay the agent to do it for you. Simple really. Nothing for nothing in this world and as long as all parties are in agreement with the pricing, and terms. Then all should be happy, harse but fair as I see it.

[tim123]

See my post three before you.

It's because we are the shopping.

If I'm a supplier of apples, I don't care what mark up Tesco put on my apples *provided* that the mark up is the same for all my competitive products.

But if Tesco mark up my apples 300% and mark up oranges 10%, I am going to sell less of my apples because the end customer is going to buy oranges.

Now do you understand why it is important?

tim