Switching agency?? :o

[insight14]

We're talking about 20%??? 20% is not a big margin by any means - it is probably about average in the IT industry.

Something doesn't add up here. Lets work with multiples of 50 (as it easier to calculate). Lets say you get £200/day and your agent gets £50/day for your 80/20 split. You aren't likely to get another agent to put you on their books for less than 10%.

So are you telling us that the client can afford you at £225/day, but not £250/day?

[tim123]

We're talking about 20%??? 20% is not a big margin by any means - it is probably about average in the IT industry.

Something doesn't add up here. Lets work with multiples of 50 (as it easier to calculate). Lets say you get £200/day and your agent gets £50/day for your 80/20 split. You aren't likely to get another agent to put you on their books for less than 10%.

So are you telling us that the client can afford you at £225/day, but not £250/day?

I agree. The problem you have here is a cheapskate client, not the agency margin.

20% is not excessive (even if it is higher than some would like it to be) you're on a low rate AND the client wants you to go lower.

Methinks that this is not the type of client that you want a long term relationship with, unless there are very good reasons.

tim

[Dundeegeorge]

Hmnn

"20% is not excessive (even if it is higher than some would like it to be) you're on a low rate AND the client wants you to go lower."

Let me guess, you're an agent, aren't you?

"Methinks that this is not the type of client that you want a long term relationship with, unless there are very good reasons."

Good reasons like having an income perhaps. Cheapskate clients don't deserve to have people work for them (well yeah obviously it's impossible to pay both the worker and the agent), sounds like the agency are the problem here, not the client.

[tim123]

"20% is not excessive (even if it is higher than some would like it to be) you're on a low rate AND the client wants you to go lower."

Let me guess, you're an agent, aren't you?

No,

I'm a contractor and I don't think that I've ever had a contract where the margin was less than 15% and I'm rarely the lowest paid at a site.

8-10% may be the norm for PSAs in the city but for other situations 20% is the median IME.

In any case, the difference between a 10% and 20% margin does not make a rate "low". It makes 45ph become 40ph, or 33ph become 30ph. IMHO both of the first are reasonable and both of the second are low.

tim

[insight14]

Good reasons like having an income perhaps. Cheapskate clients don't deserve to have people work for them (well yeah obviously it's impossible to pay both the worker and the agent), sounds like the agency are the problem here, not the client.

And yet clients up and down the country DO pay both the worker and the agency - thus its not impossible. What is you point here George?

And why do you think the agent is the problem here? Why should it be the agent who cuts their (already reasonable) % in half when neither the client nor the contractor is willing to negotiate on their rate?

And yes, I'm a contractor too.

[BlasterBates]

...hmm I see this as actually grey. Legally you should give your agency first shot, if they fail to secure you a contract, I don´t think they can stop you working, for the same client. I think this is known as uncompetitive behaviour, in other words what you can´t do is switch agencies if your agency is offering to extend your contract, but if they are not then, they can´t expect you to sit on the bench.

Normally if they want you to sit on the bench, they should be paying you, they can´t have it both ways, sit on the bench, and replace you with someonelse (for example). As soon as the agency can´t offer you work, I would see them in breach of contract. The contracts that stipulate that you can´t work for six months after the termination of the contract are perhaps illegal if there is no compensation involved, but that is my suspicion.

[malvolio]

Normally if they want you to sit on the bench, they should be paying you, they can´t have it both ways, sit on the bench, and replace you with someonelse (for example). As soon as the agency can´t offer you work, I would see them in breach of contract

Let me guess, BB, you're not worried about IR35? Ever heard of Mutuality of Obligation?

Anyway, you are basically right, the agency should either do something to protect their revenue stream, even at a reduced level, or walk away completely. It is seriously unfair of them to fail to agree new terms with their client, and expect you to suffer as a result. But hey, this is business - it has little to do with "fair"...

Also, the very fact the agency is being so uncooperative leads me to think perhaps it's the end client that's the problem, the agency just want out, they don't care about collateral damage or repeat business but they do want their money. Personally I'd walk away from the whole mess.

[BlasterBates]

Well when I say pay, I meant a lump sum compensation, to forego a contract, if that situation arose

I did have this contractual clause and it did actually satisfy the German equivalent of IR35, so...

Anti-competitive clasues and agreed levels of compensation are quite normal between "real" businesses.

[boredsenseless]

Something doesn't add up here...

They see you as a great asset --> but they then turn round and devalue their asset by basically saying you charge too much for the work delivered.

Lets be honest 20% whilst not low isn't really high when you consider what agents have to pay for...

1. Their salaries
2. Their offices
3. Their phone bills - and boy can they rack them up
4. Dodgy shiny suits
5. Entertainment
6. Insurances
7. Factoring

If an agent is charging less then about 15% then either they have got the client tied into using them only, they aren't telling the truth or I'd be worried that if one client defaults on paying the whole stack of cards would come tumbling down and I and probably many others would be out of work.

I generally don't use agents in fact in 4 1/2 years I never have, and I can catergorically state that the cost of finding your own contracts and the extra time that takes (phoning, contract negotiations, failed bids) amount to well over a 20% if you actually look at how much your 'lost' time is worth.

Most professional services companies expect their revenue generation employees - sales, pre-sales, principle consultants - to be doing either non-charge or bid work that ultimatley does not lead to a contract for at least a third of their time, so 20% seems like a bonus to me!

The only way you will ever get agents to charge less is to stop using them, the drop in income will force them to become more competitive, whinging will never achieve the same.

As for the concept of dropping an agent and going direct or to another agent, well I can safely say I'm glad I don't do business with you, its called professional courtesy and its that sentiment that leads to repeat business.

What do you think the next agency/direct client will be thinking at the back of their heads if you do this.

1. Here is a really decent guy who is good at his job whose agent gave him a raw deal?

or

2. Here is someone its not worth building a relationship or trust with as he will just F*** off whenever he sees a way to screw us.

[tim123]

As for the concept of dropping an agent and going direct or to another agent, well I can safely say I'm glad I don't do business with you, its called professional courtesy and its that sentiment that leads to repeat business.

What do you think the next agency/direct client will be thinking at the back of their heads if you do this.

To be fair, I think the poster sees himself as stuck between a rock an a hard place.

He has a client that he want's to show some loyalty to and an agent that he thinks is stopping him from providing that loyalty, by insisting on too large a margin.

But, whilst it is clear that an agent ought to reduce their margin for a contractor who finds himself a new position at the same client, as you say, there really are good business reasons why this isn't going to go much below 15% and this difference isn't goining to be a make or break amount for a known resource. If this client really is paying a low rate, they are going to struggle to get any qualified person for the money so passing up a know person for a few percent more is silly IMHO.

ISTM that one of the following is the case:
1) Someone has lied about the margin and it isn't 20%.
2) The posters perception of 'low' is different to mine. A normal rate is: if permi job that you are doing pays Xk pa, contract rate should be X pounds per hour, so if contract rate is less than X, it is low. This is not the same as "it is low because it is a job 3 steps below the one that I am qualified to do".
3) The client is TTP big time.

I've aleady stated which I think it is and that is, the loyalty to the client is missplaced, he isn't showing any back.

Tim