How much do agents take?

[malvolio]

I could be wrong but I think what Mal is saying you get 100% of the rate the agent is offering. You shouldn't look it is as a lump of money the agent is taking something fromm. The client charge is none of your business. He's talking about looking at it properly from a commercial and contract chain perspective I think.

Exactly that. You don't ask Tesco how much they pay for their asparagus spears, you accept the price on the ticket at the checkout. Unlike Tesco's you should (indeed must) argue for the best rate that you want/need/will accept, and make sure you know what will come out of that before it reaches you, but you are only ever arguing against the agent's budget for the role, not what the client is paying.

Your job is being a contractor, not performing the service you provide. Get to be good at doing that - and that means understanding all sides of it.

[vwdan]

Exactly that. You don't ask Tesco how much they pay for their asparagus spears, you accept the price on the ticket at the checkout. Unlike Tesco's you should (indeed must) argue for the best rate that you want/need/will accept, and make sure you know what will come out of that before it reaches you, but you are only ever arguing against the agent's budget for the role, not what the client is paying.

Your job is being a contractor, not performing the service you provide. Get to be good at doing that - and that means understanding all sides of it.

Mmmm, I don't really see the comparison. Tesco are a shop - they've purchased the asparagus already, and it's a take it or leave it affair. It's also backwards, I'm the customer of Tesco - not a supplier.

There's plenty of scope in negotiating a contract, and I think it's a bit daft to pretend like the two sides of it are completely exclusive. If I push back on a rate, if the agent is fixed margin, then they're going to go back to the client and say "VWDan want's £x. I don't think your assertion about budgets is true at all - certainly not in my experience.

I'm just not sure your POV is particularly helpful really, because it's not really as simple as is made out

[vwdan]

I could be wrong but I think what Mal is saying you get 100% of the rate the agent is offering. You shouldn't look it is as a lump of money the agent is taking something fromm. The client charge is none of your business. He's talking about looking at it properly from a commercial and contract chain perspective I think.

But the client cost is an inherent part of the negotiation - I'm sure in some/many instances the client has a fixed budget, and the agent gets to play with the rest. But there's also plenty of time when the agent is simply on a fixed margin and the client budget is flexible - at that point the agent truly is just a middle man. And that's fine, I don't mind them, I just think it's a little silly to pretend that the fundamental purpose of them isn't to secure an agreement between the client and ourselves.

And, indeed, I've been engaged direct after agency introductions where presumably they took some kind of finders fee

[eek]

But the client cost is an inherent part of the negotiation - I'm sure in some/many instances the client has a fixed budget, and the agent gets to play with the rest. But there's also plenty of time when the agent is simply on a fixed margin and the client budget is flexible - at that point the agent truly is just a middle man. And that's fine, I don't mind them, I just think it's a little silly to pretend that the fundamental purpose of them is to secure an agreement between the client and ourselves.

And, indeed, I've been engaged direct after agency introductions where presumably they took some kind of finders fee

The fundamental purpose of an agent is to find a candidate willing to accept the contract the client is offering.

We are a separate but parallel part of that purpose - but that does make as interchangeable..

[malvolio]

Mmmm, I don't really see the comparison. Tesco are a shop - they've purchased the asparagus already, and it's a take it or leave it affair. It's also backwards, I'm the customer of Tesco - not a supplier.

There's plenty of scope in negotiating a contract, and I think it's a bit daft to pretend like the two sides of it are completely exclusive. If I push back on a rate, if the agent is fixed margin, then they're going to go back to the client and say "VWDan want's £x. I don't think your assertion about budgets is true at all - certainly not in my experience.

I'm just not sure your POV is particularly helpful really, because it's not really as simple as is made out

OK, so among various roles over the years I've been a Head of IT, a director of a contracting body, worked with three major and a few very small agencies, I've hired teams of up to 50 people (and hired many more individuals than that) and managed both project and revenue budgets from £100k up to £70 million, with clients ranging from small consultancies up to multinationals. My perspective on budget management and the cash flow across the hiring process may be wrong in your view, but at least it it is well informed. And yes, it is complex even when I was doing it, it is even worse now with all the cowboys out there.

The agent is not handling the client's budget, he is managing his own budget funded by the client's money. The client will know the margin the agency is taking and will know pretty much what the market rate is for any given role (and if he doesn't then someone in the chain does) but what the contractor gets is not his concern. The client sets an overall budget that will have been agreed with his financial management or he will be working to a rate card, or he will have agreed a rate for the role in discussion with the agency Either way the final decision on what the contractor gets is between the contractor and the agency. And always remember that the contractor is rarely dealing with the agent the client is dealing with.

I wasn't trying to write a thesis on the subject, merely correct the erroneous view that the contractor is the arbiter of the cost to the client and everyone else is an overhead.

[NowPermOutsideUK]

Agents take zero risk. It’s not like they will be stuck with a warehouse of asparagus spears.

they prostiute out the contractor to a bidder. And the margins are insane for the work done

I also have the same gripe about estate agents and Foxtons. They advertise your property. Any problems with tenants and they put you in touch with a lawyer who will bill £300 an hour to help

zero skin in the game. Pure cash machine

[eek]

zero skin in the game. Pure cash machine

Not in the new world of outside IR35 contracts - a sane agency would only be doing inside contracts with fully audited umbrellas

An outside IR35 contract going wrong is a bankruptcy level event for a small even a medium size agency

[vwdan]

The agent is not handling the client's budget, he is managing his own budget funded by the client's money. The client will know the margin the agency is taking and will know pretty much what the market rate is for any given role (and if he doesn't then someone in the chain does) but what the contractor gets is not his concern. The client sets an overall budget that will have been agreed with his financial management or he will be working to a rate card, or he will have agreed a rate for the role in discussion with the agency Either way the final decision on what the contractor gets is between the contractor and the agency. And always remember that the contractor is rarely dealing with the agent the client is dealing with.

I wasn't trying to write a thesis on the subject, merely correct the erroneous view that the contractor is the arbiter of the cost to the client and everyone else is an overhead.

I still feel like you're exaggerating the disconnect between the two. Yes, there's a legal one and it's absolutely critical for a contractor to remember it. But you're talking about agencies more like one would talk about a professional services company.

It's not that they manage your budget, it's that there's clearly a very close relationship between contractor and client. If it was all delegated to the agent then they'd be interviewing me and the first time I was introduced to a client would be the day they start.

But its not, we have a chat about rate, I go and speak to the client and an offer is made. If I push back, then that may well and often does prompt the agent to go back to the client and give them the choice to either pay more or lose me, or call my bluff.

Last client I had had a clear dashboard with all of the agency contractor submissions outlining contractor rate, and margin. I'm sure that's far from unique.

They're an intermediary and I think it's unusual to see them as the product. Especially contrasted to, say, a professional services company supplying resources.

I appreciate your experience and I'm not disputing it, it's just not really my experience or at least how I would phrase it. But my world is quite special and I'm probably a but more ad hoc and headhunted than most, so I do sincerely accept that my experiences may not be indicative of rank and file programmer or whatever

[gazelle]

I'm going through this right now.

First inside contract.

There is a reason why these agents are called Pimps - as that is exactly what they are - the scummy ones that think they have a right to screw you over. The good ones are transparent and say there are on a fixed margin and often tell you as such 8-10%.

This particular agent said the max they could offer was £450, when I tried to push for £500 (- ideally, I was after £550), he said he would if he could, but that's the max the client is willing to offer.

My options were either to reject and keep looking - you don't know when or if you would find a better contract - I thought it is better to have some money coming in rather than nothing.

Soon after starting, I found out client is paying agency £550 - so agency are making £100 per day for doing diddly squat.
My view is that they should just get paid a lump sum - how can it possibly be justified they can take a proportion of each hour/day you work.

The whole recruitment industry is rife with exploitation - have heard so many stories of workers being ripped off, financially exploited across all sectors - think it's especially rife in the lower paid sectors

The agency cut should be completely transparent or at the very least a separate fixed margin. Otherwise it just leads to bitterness and resentment as well as low morale. Also, if this is how little they value you, then why should give your best to the end client or even help them improve. You'll just do the bare minimum.

The agency only putting forward contractors that agree to their low rate, so even though there could be higher calibre contractors, but because they don't play ball with the agency's low rate, the client doesn't get to interview them and thus get the best value for the money they are giving to the agent.

Client obviously wants to have the highest calibre contractor for the money they are paying. Whereas the agency is interested in maximising profit foremost and will overlook higher calibre contractors. Conflict of interest ensues.

I won't name this current agency, but I've since looked at this agency's track record and they have been derided on here and even on glassdoor by former employees.

In my case, I've now found a contract paying £550 with fixed margin. I will be emailing the client and not mincing my words as to what I think of the agency they have hired and giving my reasons as to why I'm handing in my notice. Suffice to say the client will not be best pleased with someone leaving mid-way through a project and then having to go through the process of hiring someone else.

These greedy agents have a very myopic view.

[lecyclist]

It's fair to say that the experience of feeling ripped off is more obvious on the lower rates. gazelle, I had similar experiences earlier in my career when my rate was £300-500. At those levels skimming £100 really stings. Even more so these days if we are talking inside IR35 rates.

It's also fair to say that one of the fundamental human characteristics is laziness. Why shouldn't contractors, agents, car salesmen, estate agents get paid for doing nothing if they can get away with it? Especially if each trade is viewed through the lens of a zero sum game.