Are recruitment agency fees excessive?

**Paralytic** · 24 November 2022, 16:32

I suspect you already know the answers to all your questions. Your options: if you're 100% sure the agent margin is £200, ask for an increase, and make it clear that you'll be prepared to walk if you don't get it. If they refuse, walk. If you don't, prepare to never get an increase in future.

Don't concern yourself as to whether any increase you get comes out of the agent margin or whether they try to increase their rate with the client.

Only you can decide if you want to take that risk. How much would the client miss you?

**northernladuk** · 24 November 2022, 16:40

Is it excessive an agent is taking £200 a day for doing absolutely F all? You really want an answer to that? The problem is the only chump in the chain is you for letting them do that as it's your money they are pocketing.

Agents comission rates vary depending on how many contractors they have on site. Obviously an agent with only a few contractors onsite is going to need a higher commission to cover their costs, a large agent embedded with the client needs lower. Looking at threads we've had in the past then for your few contractor agents don't be surprised if they are 15-20+ plus. A large agent could be as low as 7-10% and a world in between.

That said, they are snakes in the grass and do their best to pull your pants down. We call it newbie tax. You didn't negotiate hard enoug so the agent is taking more than they are due. They won, that's the way of a negotiation. What you have to do now is wait until an extension and then make it very clear to them you are going to leave unless they pay you X and then negotiate. If you ask you'll never get. You have to threaten their commission and if they believe you they'll fold. They've made some good money out of you and covered their onboarding costs so anything after an extension is pure profit and they will be more willing to move on that to keep you onboard.

As you see you 'asked' and they fobbed you off. You are the problem there not them. You don't ask. You tell them what rate you want or you are off. And sound like you mean it.

They do this full time and they are very good at it so they'll sniff a noob out a mile off. The fact you asked and the fact you called it a 'Pay Rise' makes you a very easy target so they will have given you the absolute minimum and the drove off in their Bentlys laughing all the way home.

What the agent get's isn't the problem. It's whether you are going to be a push over and let them.

Could this be because he doesn't think he could increase his own cut enough? Is his share of the cut preventing me from getting a pay increase?

It's because you aren't doing your job properly.

**northernladuk** · 24 November 2022, 16:42

Is it only me that thinks there is a big dose of irony in your username? IR35equalshateoflittleguy? IR35 is for companies not guys. Guys go inside

**IR35equalshateoflittleguy** · 24 November 2022, 17:11

Good advice, thanks. I'll ask for a rate and I know the client will pay it because they are already paying it. Then it's up to them to either ask for more from the client or reduce their cut. Still feels like high. Honestly I thought they made about £50 per day.

**WTFH** · 24 November 2022, 17:13

How do you know the client is paying £750 a day for you?
And does that include VAT?

Also, if you've been at a client for 5 years, you're not really a contractor, you're firmly inside IR35 and should be PAYE.

**northernladuk** · 24 November 2022, 17:31

Originally posted by IR35equalshateoflittleguy View Post

Good advice, thanks. I'll ask for a rate and I know the client will pay it because they are already paying it. Then it's up to them to either ask for more from the client or reduce their cut. Still feels like high. Honestly I thought they made about £50 per day.

OMG no. HugeBrain said something similar yesterday. How can contractors not understand how this works? It's our bread and butter.

The client has a rate card. They are willing to pay that amount. An agent comes on and takes on the work to find someone and pay them. For that work they get a cut. The agent has nothing to do with the rate teh client pays. They do not go back and ask more from the client. We are a service industry. We service the need of the client who is willing to pay X. The rest is between you and the agent.

That single post shows how little you understand about contracting and I haven't mentioned the last sentence. You need to start understanding what you do as a business and where you are in the pecking order. Like I said, agents prey on the bad contractors, you going in asking for what the client pays will just have them rolling in the aisles.

On a big client with tons of contractors they do. It's all about scale of econonmy like any business.

**northernladuk** · 24 November 2022, 17:32

I also pay employer NI and employee ni out of that, not sure if it comes out of my pay or the 750 day rate.

Missed this. How the hell have you been there a year and you don't know? You are saying you don't know how or what you are paid? That's unforgivable.

Are you inside or outside? As WTFH says for that long you should be inside and to have such a poor grasp of what you do is not running a business so even though the contract might be outside you are putting yourself inside by not having a clue.

**WTFH** · 24 November 2022, 17:35

Originally posted by northernladuk View Post

How the hell have you been there a year and you don't know? .

A year?

Try...

Originally posted by IR35equalshateoflittleguy View Post

I've been there almost 5 years,

**northernladuk** · 24 November 2022, 18:11

Originally posted by WTFH View Post

A year?

Try...

Ugh yeah, getting too giddy to reply.

Are recruitment agency fees excessive?