Advice on renewal rate negotiation

[apb]

The agent has pocketed the extra £25.

When he was 'consulting with the Client' he was really bragging to his boss and high-fiving his colleagues. Probably rang the office bell too. I believe the phrase they use is "like taking candy from kids".

HTH

Yep -I suspect I have been had - but the rate is still good, although in the future I'll be looking to recoup!!!

[Svalbaard]

As a senior PM and unless your finance division is padlocked, surely your own project or portfolio resource plans and financials should indicate exactly what the business is paying the agency for your skills?

As a lead PM at my current client, my daily pay rate (from my agency to me) is £550 but when I do my monthly reporting, I drag all my actual costs out of SAP and use a figure of £582 which is the true cost that the business pays the agency i.e. a margin of about 6.5%. Which is pretty good.

[apb]

As a senior PM and unless your finance division is padlocked, surely your own project or portfolio resource plans and financials should indicate exactly what the business is paying the agency for your skills?

As a lead PM at my current client, my daily pay rate (from my agency to me) is £550 but when I do my monthly reporting, I drag all my actual costs out of SAP and use a figure of £582 which is the true cost that the business pays the agency i.e. a margin of about 6.5%. Which is pretty good.

What I do know is that the consultancy charge me out to the Bank for £738/day but I am sure that is not what the consultancy's agency charge. So the consultancy make a margin and then the agency do also. I've no access to the finance system to find out the true cost, so I'm not able to work it back as you've been able to, I can only guess!

[NickNick]

What I do know is that the consultancy charge me out to the Bank for £738/day but I am sure that is not what the consultancy's agency charge. So the consultancy make a margin and then the agency do also. I've no access to the finance system to find out the true cost, so I'm not able to work it back as you've been able to, I can only guess!

Heh I can beat that, being charged out at 1065 and being paid 350 in a gig a few years ago.

[oracleslave]

Heh I can beat that, being charged out at 1065 and being paid 350 in a gig a few years ago.

I hope that was a lesson learnt!

[Lewis]

Unfortunately not, don't think at this stage I'm in a position to ask the Client.

The complicating factor is that I am contracted to a consultancy and working on a Bank account. The agency is part of the overall consultancy group although I am sure they operate as a commercial entity and cross charge the cost - I presume their profit is derived from the margin.

Think I will have to accept at this stage!

Thanks.

You should ask the agent (by email so you have something in writing) what their margin is. If they are professional they will tell you, if they refuse it says something about them (I'd assume the margin is unreasonable!). At renewal is a good time to ask as they want you to stick with the gig so will act more reasonably.

I was once told verbally by an agent they were takling 15% to find later from the client they were taking 25%! if I had something in writing I would have had some come back as I was lied to. This was many years ago. As a matter of course I always ask the agent now as I would never accept an agent taking more than 15%. In 10 years an agent has never refused to tell me.

I wouldn't even be surprised if the agent got the £500 p/day from the start and then took the £25 p/day out of his marging to give you the £475 p/day, especially as this is your first contract, call me cynical but I think agents try all the tricks in the book on newbies! I had lots of tricks like this played on me in the early days and they try it again and again. Fortunately I am now wise to most of them and have no fear in asking the client the rate they are paying when I start if I need to.

And ignore all the comments about ignore the margin and just be happy or not with the rate. Margins are negotiable and I see no reason why you (and your family) should suffer an agent taking an above market rate margin (which is around 10%-15%).

[Lewis]

What I do know is that the consultancy charge me out to the Bank for £738/day but I am sure that is not what the consultancy's agency charge. So the consultancy make a margin and then the agency do also. I've no access to the finance system to find out the true cost, so I'm not able to work it back as you've been able to, I can only guess!

Shame. I did this once. Double margin is a real pain. Personally I won't do that again. I was effectively the same as every other contractor (I had virtually no further contact with the consultancy!) and cost the bank the same as the rest but got paid less! I only stayed 3 months. It was the same gig as the agent taking 25%!