Ditching Recruitment company and going direct?

[SC23]

Hi all,

Pretty new to the world of contracting. I started in February 2023 and went through a recruitment agency (RA) and got my first contract. This was very short term (2weeks), but has been extended various times and is now due to finally end next week. I've developed a pretty good relationship with the company/client I've been providing services for, and they have suggested they would be very happy to work with me again for future projects.

The recruitment company have told me that if that client comes forward again with future contracts they wouldn't favour me, they'd just put me forward with a bunch of contractors for re-consideration for the new contract with the client (which I guess makes sense for them). It also turns out they're taking quite a sizable chunk of change for this contract (in my opinion) - they charge the client £350 a day and pay me £250 a day.

There is obviously a clause in the original contract i signed with the RA that says something along lines of, I cant go direct to the client and offer the same services for a period of 6 months after the end of the contract without their consent, or they can seek the funds they've lost out on from me.

How often (if at all?) do people ignore these sorts of clauses and go direct to clients they've established good relationships with? How would a RA even discover this sort of thing was taking place?

Just to clarity the set up;

Current: Client - RA - LTD - me
direct: Client - LTD - Me

I'm not saying I'm going to do this by the way, and I understand RAs need to take their cut. I know this cant be a new discussion so I'm just wondering what more experienced peoples views are on this?

Apologies if a similar topic has been posted before and i've missed it!

[eek]

Hi all,



Apologies if a similar topic has been posted before and i've missed it!

It's been posted a lot of times with the same answer - unless your end client ends all relationships with the agency it will only end in a world of very expensive pain for you and the end client.

Think the agency isn't paying you enough - take it up with them and be prepared for the agency to replace you with someone willing to work for £250 heck even £200 a day.

[JustKeepSwimming]

Hi all,

Pretty new to the world of contracting. I started in February 2023 and went through a recruitment agency (RA) and got my first contract. This was very short term (2weeks), but has been extended various times and is now due to finally end next week. I've developed a pretty good relationship with the company/client I've been providing services for, and they have suggested they would be very happy to work with me again for future projects.

The recruitment company have told me that if that client comes forward again with future contracts they wouldn't favour me, they'd just put me forward with a bunch of contractors for re-consideration for the new contract with the client (which I guess makes sense for them). It also turns out they're taking quite a sizable chunk of change for this contract (in my opinion) - they charge the client £350 a day and pay me £250 a day.

There is obviously a clause in the original contract i signed with the RA that says something along lines of, I cant go direct to the client and offer the same services for a period of 6 months after the end of the contract without their consent, or they can seek the funds they've lost out on from me.

How often (if at all?) do people ignore these sorts of clauses and go direct to clients they've established good relationships with? How would a RA even discover this sort of thing was taking place?

Just to clarity the set up;

Current: Client - RA - LTD - me
direct: Client - LTD - Me

I'm not saying I'm going to do this by the way, and I understand RAs need to take their cut. I know this cant be a new discussion so I'm just wondering what more experienced peoples views are on this?

Apologies if a similar topic has been posted before and i've missed it!

Way too many unknowns. What the contract is between the RA and client. What their relationship is. How willing client is to stand up to RA or how aggressive the RA will be.

It's the client's fault that they did no agree fixed margins with the RA, it's very bad practice as it can easily sour client/contractor relationships if it ever comes out the RA is taking the piss.

The RA would be an absolute mug to not 'favour' you if the client came forward with a similar role. People like to hire people they know can do the job and are reliable, working for the client previously shows that.

[northernladuk]

Hi all,

Pretty new to the world of contracting. I started in February 2023 and went through a recruitment agency (RA) and got my first contract. This was very short term (2weeks), but has been extended various times and is now due to finally end next week. I've developed a pretty good relationship with the company/client I've been providing services for, and they have suggested they would be very happy to work with me again for future projects.

Every client ever will say that. Don't get too giddy about it. The chances of you being out of work just when they want someone is going to be slim to nil. They are just being polite. Be prepared to move on and never work with them again.

Contracting101, don't fall in love with the client or the gig. You are an expendable resource.

The recruitment company have told me that if that client comes forward again with future contracts they wouldn't favour me, they'd just put me forward with a bunch of contractors for re-consideration for the new contract with the client (which I guess makes sense for them). It also turns out they're taking quite a sizable chunk of change for this contract (in my opinion) - they charge the client £350 a day and pay me £250 a day.

Yeah that's a bit of a chunk by any standards. It's that big because you didn't understand the market rates and got suckered. Call it Noobie tax. The agent has pulled your pants down because you didn't negotiate hard enough. Rule of thumb is that if the agent has a lot of contractors the cut could be anything between 8 and 11%, medium number could be up to 15% and just for a few it could easily be pushing 20%. Also depends on the rate. The agent has to make X amount to make it worth their while so they are likely to take a higher % from lower rates. 100 from a rate of 500 is more around 20% which could be in line if the client has very few contractors.
First question you have to ask the agent is if they are on a fixed rate. If they say no then it's negotiation time. They could of course be lying but I don't think they would about that as much as other things.

Either way, negotiate harder next time.

There is obviously a clause in the original contract i signed with the RA that says something along lines of, I cant go direct to the client and offer the same services for a period of 6 months after the end of the contract without their consent, or they can seek the funds they've lost out on from me.

How often (if at all?) do people ignore these sorts of clauses and go direct to clients they've established good relationships with? How would a RA even discover this sort of thing was taking place?

It just won't happen (usually). The client has offloaded it's resourcing so they won't breach contract with the agent and go looking for someone direct. Very occassionally people will get poached from a consultancy or something like that but it's very infrequent. If it does happen it's down to the client to negotiate with the agent, usually by telling them if they don't drop the penalty they will lose their contract.

Again I think you are a bit too in love with this role. It's over, move on. If it happens it happens. Don't go looking for ways to stay with your client that aren't there.

[SC23]

Thanks very much for your replies. I think I'm probably being a bit naïve here, but then it is my first contract role. I will certainly pay a bit more attention when it comes to negotiating now I know what kind of numbers they go up to!

I'm also assuming they will have more work, they might not have anything on the table for months - and even if they do, who says they will ask me to work with them again...

oh well! I can only hope another one comes along soon...

Thanks again all

[northernladuk]

Clients will make some very strange decisions. Won't ask you back, bin you in the middle of the work and whatever. There will be reasons you don't understand or don't make sense. Could be as simple as your face doesn't fit, the budget ran out, your performance. You've just got to go in do the work and leave it's as simple as that. You've got to get out of your permie thinking that you are much liked valuable resource. It's hard and fast in contracting.

Also remember being a business owner/contractor is your job. The bit at the client is easy, even the perms can do it. Learn and understand all things around engaging. IR35, agency regs, how the LTD works, chain of engagement and all sorts. Also understand every single word of your contracts as well. Do you know the difference between and fettered and unfettered right of substitution? You know they can bin you on the spot using the paid when recieve timesheet clause and your notice period is irrelevant etc?

Different world so needs a totally different mindeset.

[SimonMac]

Agents work for the clients not the contractors, why would a client want to bypass a part of the process that makes their life easier?!

[JustKeepSwimming]

Agents work for the clients not the contractors, why would a client want to bypass a part of the process that makes their life easier?!

Not really. An agents usefulness is finding a worker. In this case they have done that. They don't really provide any on going benefits to the client, beyond perhaps consolidating payments.

[jamesbrown]

Agents work for the clients not the contractors, why would a client want to bypass a part of the process that makes their life easier?!

They wouldn't. Agents are for mass-market contracting, things like Java devs or BAs where there's the volume and money and the model works adequately well and, therefore, hasn't been overturned, despite some belated attempts by contractors and others to "unionize" the supply. For niche skillsets, it's a different story because traditional agents are useless at finding these and there isn't the volume or desire, especially from the contractors who hold a better balance of power.

[SimonMac]

They wouldn't. Agents are for mass-market contracting, things like Java devs or BAs where there's the volume and money and the model works adequately well and, therefore, hasn't been overturned, despite some belated attempts by contractors and others to "unionize" the supply. For niche skillsets, it's a different story because traditional agents are useless at finding these and there isn't the volume or desire, especially from the contractors who hold a better balance of power.

If OP is on £250 a day I wouldn't consider them to be niche