Extension -- getting rid of the agent

[Ardesco]

I am not caught by IR35.I doubt very much that the agency will mess with the client as they are in their PSL and don't want to jeopardize their potential future business prospects...

Oh and secondly, agents will happily make legal noises at a company to stop this happening. They may be in the clients PSL but they have a business to protect and if all thier contractors went direct at first renewal they wouldn't get any money out of the client at all making thier PSL status moot

[ASB]

Agreed.But what i am failing to understand from responses so far to my question is how will the agency come to know at all that I have gone direct with the client...unless either me/client or other contractors squeal...

How big are your balls ?

The chances of the clause you have being enforced by court are almost nil. It is up to the agency to take action. So they say "you've gone direct". You say "yes, well stuff you. Sue me pal." This is the only way the agency can actually do anything at all - unless you negotiate.

If they do go legal then you get your legals to make a reasonable settlement figure - perhaps the agency's rate for 4 weeks (or whatever the notice period is). After all there is no further interest beyond this for the agency really anyway.

As mentioned if you haven't opted out they are on a much stickier wicket. And if you have opted out now might be a good time to opt back in.

[aj1977]

They put others contractors into the building who tell them (could come up in conversation in an innocent way, agent may ask other contractor who says yes without realising it's a prolem, etc). Agent may come into the building tho smooze with management and se you sitting at a desk when they do, they could phone up other people in the company they know and ask them. Hundreds of ways.

At the end of the day I would be very surprised if the client will back you and want to keep you on if the agency finds out and the tulip hits the fan. Companies don't want to be involved in lengthy and expensive legal battles for a contractor they can kick out of the door on Friday and have another one in doing the ame job on Monday.

If the agency is on the clients PSL the client already knows what they are paying you, and what they are paying the agent. If they want to reduce the agents cut they need to re-negotiate the PSL (quite easily done, clients do it all the time), or if they want to increase the rate they just pay the agent his extra too.

Are you sure the company will keep you on and let you go direct, or have you just had <insert random line manager who thinks he can save some money to make his budget look better here> tell you it will be all fine honest guvnor? I would suspect you are being lead up the path by some manager who doesn't understand the complications and will be given a swift talking to by HR when they find out what's going on and kick you out of the door.

No it was not any manager that gave me this idea...It was me who suggested to the line manager to go direct in order to bridge the rate gap as we both felt the agency cut was too high

[BrowneIssue]

I suspect I'm going to regret this but I'll have a go: I am looking at the problem from an ethical perspective.

The agent found you the gig. That's how they make some of their money. They make their real money once the extensions start.

If you don't like the arrangement, find another gig on more money, either through an agency or on your own.

Don't get me wrong: I hate agencies and their working practices. But I also hate contractors who give other contractors a bad name.

If you can't find a way of getting the agent out of the loop without being underhanded, personally I wouldn't do it at all. Sadly, I am burdened by ethics and apparently the NHS can't operate to remove them.

You can turn this around by looking for and getting another gig on better money. Then you can negotiate in your existing role by being able to prove you are worth more.

Also, the agency is made up of experts at selling. If they are on a fixed %age, then it is in their interests to get your rate up too. Get the agent to do the negotiating with the client. I once spent 5 years in a contract specifically because the agent was damn good at working with me to get me rate increases.

[Ardesco]

No it was not any manager that gave me this idea...It was me who suggested to the line manager to go direct in order to bridge the rate gap as we both felt the agency cut was too high

This convinces me even more that the line manager thinks it sounds like a great wheeze to reduce the amount he is paying for you and up your rate making you happy. However when he goes to HR with this idea they will shoot him down because he doesn't understand the legal ramifications and he won't have seen the contract between his company and the agency.

As good as it sounds getting yourself direct I have only heard of a handful of peopel who have managed to go direct at extension time, and this was due to unusual circumstances (e.g. agency going bankrupt).

The best way to go direct is not hassle at extension time but be professional throughout the contract, get on well with the management and make sure they have a business card when you leave so that they can contact you direct if anything becomes available in the future. If you were good at your job, highly professional and got on well with them all they will remember you.

At the moment you are at risk of talking yourself out of a gig and being remembered as that contractor who tried to cut out the middle man to grasp a bit more money but was let go because of all the tulip that got kicked up because of your actions and HR will probably make sure you never work there again.

[aj1977]

I suspect I'm going to regret this but I'll have a go: I am looking at the problem from an ethical perspective.

The agent found you the gig. That's how they make some of their money. They make their real money once the extensions start.

If you don't like the arrangement, find another gig on more money, either through an agency or on your own.

Don't get me wrong: I hate agencies and their working practices. But I also hate contractors who give other contractors a bad name.

If you can't find a way of getting the agent out of the loop without being underhanded, personally I wouldn't do it at all. Sadly, I am burdened by ethics and apparently the NHS can't operate to remove them.

You can turn this around by looking for and getting another gig on better money. Then you can negotiate in your existing role by being able to prove you are worth more.

Also, the agency is made up of experts at selling. If they are on a fixed %age, then it is in their interests to get your rate up too. Get the agent to do the negotiating with the client. I once spent 5 years in a contract specifically because the agent was damn good at working with me to get me rate increases.

Agree with you on the ethical front..But I already have a offer which offers the market rate(twice of what iam on now)..so the very fact i ended up with tulip rate is due to the agent's markup....

[Ardesco]

Agree with you on the ethical front..But I already have a offer which offers the market rate(twice of what iam on now)..so the very fact i ended up with tulip rate is due to the agent's markup....

Or the fact that the client doesn't want to pay market rate because they think they can get the work done on the cheap. If an agent is taking 1/5 of your pay and you are on half the market rate the client is only paying the agent about 60%~ of the market rate.

This also raises the question, why are you considering staying and going direct if you can get double your pay elsewhere? The end client is not going to increase your rate by 100% if you go direct......

[Denny]

I suspect I'm going to regret this but I'll have a go: I am looking at the problem from an ethical perspective.

The agent found you the gig. That's how they make some of their money. They make their real money once the extensions start.

If you don't like the arrangement, find another gig on more money, either through an agency or on your own.

Don't get me wrong: I hate agencies and their working practices. But I also hate contractors who give other contractors a bad name.

If you can't find a way of getting the agent out of the loop without being underhanded, personally I wouldn't do it at all. Sadly, I am burdened by ethics and apparently the NHS can't operate to remove them.

You can turn this around by looking for and getting another gig on better money. Then you can negotiate in your existing role by being able to prove you are worth more.

Also, the agency is made up of experts at selling. If they are on a fixed %age, then it is in their interests to get your rate up too. Get the agent to do the negotiating with the client. I once spent 5 years in a contract specifically because the agent was damn good at working with me to get me rate increases.

I disagree with your starting premis' here.

First of all, the EB does not 'find the contractor the gig.' This is a typical recruitment industry, well marketed misconception that leads contractors up a blind alley in trying to understand the nature of the EB to contractor relationship. It serves no other purpose but to exploit and deceive. So don't be deceived.... The truth is this:

The EB introduces the contractor to the client who has themselves generated or found the gig from within their own organisation for the EB to advertise or source for. The EB doesn't magic wand a requirement that wasn't there. It's not their job to generate roles or gigs for contractors, only to source for existing requirements.

The gig is won by the contractor themselves who uses their past experience on their CV (business profile), business accumen and knowledge at the interview (business meeting, call it what you will) to generate a contractual arrangement for a negotiated fee paid directly to the EB who then pays a proportion to the contractor.

Once you look at it like this, there is little justification for renewal percentage mark ups based on the initial work undertaken to source and negotiate the rate the contractor can make. True, there is the continued payroll service the EB is responsible for, but is that worth the same mark up as the initial mark up? I would suggest not.

Also, your second premis is wrong: you say the EBs are 'experts in selling.' But what exactly are they selling, when they are dealing with contractors? They have no product, they have no service either. That's why clients don't value the work they put in which is simply residual admin tasks all businesses undertake. They surely can't be providing contractors' services either because they haven't paid for the right to do this. We have our own limited cos, so we must be providing the service, not the EB. We can't both be doing it.

If there was some produce or service the EB is 'selling' there would be some obvious value there that the client would pay for as a one off fee (for advertising, sourcing etc.) Instead, alll their revenues are wholly generated from the work put in by the contractor once the gig begins leading to familiar complaints on here and other forums that the contractors are being diddled out of money they should have got instead - particularly when the mark ups are regarded as unreasonably high.

"If an agent is taking 1/5 of your pay" [Adesco]
Thanks Adesco. That's the second useful thing you have added, that help shore up my answer considerably. Mainly because it highlights the anomolies I have already given.

[aj1977]

Or the fact that the client doesn't want to pay market rate because they think they can get the work done on the cheap. If an agent is taking 1/5 of your pay and you are on half the market rate the client is only paying the agent about 60%~ of the market rate.

This also raises the question, why are you considering staying and going direct if you can get double your pay elsewhere? The end client is not going to increase your rate by 100% if you go direct......

Logical question..why do I look to stay with the current gig?...simply because it is top end stuff of work and there is a potential of long term work and location is 55 miles from home compared to 200 miles and in londonistan

[BrowneIssue]

I suspect I'm going to regret this...

I disagree with your starting premis' here... Also, your second premis is wrong...

Kewl! I was right about something!