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How much do agents take?

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    How much do agents take?

    Apologies if this has been asked before.

    I assume many people on this forum are working for large companies through an agency.

    The agency makes some amount on top of the contractors day rate - is this a fixed percentage or does the client offer a flat rate and it is in the agents interest to fill the role with the cheapest candidate?

    I ask because I am thinking of asking for a raise renewal time and I am cynical enough to believe agents wouldn't bother passing the request on if it comes out of their end.

    #2
    It depends on the agency, the agreement between the agency and the end client and the end client.

    Being blunt unless you see the invoice from the agency to the end client you won't know...

    However, I was chatting with someone yesterday who was asking about a similar issue and I pointed out an agency supplying an outside IR35 worker is now taking on a significant risk - and that risk costs a significant amount of money...
    merely at clientco for the entertainment

    Comment


      #3
      It depends.
      The agents may have a fixed deal with the client, or they have their own % cut. This could be anything from 5% to 25% - it's not a single figured used by all agents for all contracts.
      …Maybe we ain’t that young anymore

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        #4
        The agents don't take anything, you do. They win the business, they have overheads to cover, they set their price, then advertise the role at a rate the market finds agreeable. And if you think about it, you will see that the margin they need may vary with the rate for the role, since their costs (not their own income, which is the gap between their rate and yours less costs) are pretty much static, so a lower rate will attract a higher percentage to cover the costs.

        There are further complications with assignment rates, umbrella rates, PAYE Agency rates, outside IR35 rates and all the various pretendy agencies trying to rip you off.

        As for a raise on renewal, the people with the money are already paying you to do the best job you can, if you want a rise you will need to prove some added value to the work you're doing already. You can argue that they've recovered their costs by now so can afford to give you a slightly higher cut of course. Good luck wit that one in the current market...

        It's as well to understand how your market works. Raises are always possible but it's up to you to justify them.
        Blog? What blog...?

        Comment


          #5
          Are you happy with the rate or not?
          If not find something else and don't take the extension.
          Former IPSE member
          My Website

          Comment


            #6
            Depends on the size of the agency, the size of the client and the number of contractors they have on site.

            Larger set ups who are contractor heavy will be on a fixed rate, usually (and it's a bit of a guess and a bit of evidence) it will be between 8 and 10%. They don't need more to make the margins due to scale.

            Small client with small agency and a few contractors you could be looking at up to 25% due to the amount of effort the agency has to put in to get each contractor on site.

            First question every contractor should ask, and it bemuses me why the don't, is if the agency is on a fixed percentage. If they are there is absolutely no reason to lie and will, in my experience, always tell you. Not the percentage but just they are on fixed rate. It's an essential piece of information as it means you can't go in asking for rate rises from the agents cut. Any rise would have to come from the client which is highly unlikely. Knowing that you are ready to negotiate if they aren't.

            It's not often hard to find the charge rate to the client if you know where to look. In the old days it would be on the printer somewhere so having a root through all the old paperwork people didn't claim got you what you wanted to know. Nowadays it's just a matter of digging through their shared drives. The project charge sheet is a pretty good start. The project will often be charged the full rate the client is paying so you can work out from there etc.

            And Mal's point is a good one. You need to stop thinking of it as a cut from your money. It's not.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

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              #7
              Too much.

              Comment


                #8
                Originally posted by cannon999 View Post
                Too much.
                Seen how much a salesman cost / earns.
                How many phone calls it takes to set up a meeting that may or may not lead to a sale.

                When you start looking at things that way, agents start looking cheap.
                merely at clientco for the entertainment

                Comment


                  #9
                  Originally posted by eek View Post

                  Seen how much a salesman cost / earns.
                  How many phone calls it takes to set up a meeting that may or may not lead to a sale.

                  When you start looking at things that way, agents start looking cheap.
                  A standard rate for a contractor in my industry is 500, agents add 15% on top. 75 quid per day * 252 working days = 18,900 a year per placement for making a few phone calls? I honestly don't know why companies don't do their own recruitment it seems much cheaper and effective given that every agent I have ever dealt with was useless.

                  Comment


                    #10
                    Originally posted by cannon999 View Post

                    A standard rate for a contractor in my industry is 500, agents add 15% on top. 75 quid per day * 252 working days = 18,900 a year per placement for making a few phone calls? I honestly don't know why companies don't do their own recruitment it seems much cheaper and effective given that every agent I have ever dealt with was useless.
                    Yeah, because the only time an agency is ever incurring costs is during those few phone calls, right?

                    OP, the rate can also change too, eg, once, a contractors renewal puts them past, eg, the 2 year period at a client, the agency commission could drop from 10% to 5%.

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