Negotiation: What cut of my wages do agencies get?

[expat]

Negotiation: What cut of my wages do agencies get?

My main question is, what margins do the agencies work with? Is 10-20% a fair guess?


I assume when an agency looks for a contractor, they take the max rate the employer has specified and subtracts VAT and the agency margin to arrive at the suggested rate a contractor will take. If you are asking for more than this rate, they say they need to ask the employer for more money and will get back to you... I sometimes wonder if the agent is just going to his own manager and asking if the agency is willing to accept a smaller margin. Is this how it might work?

What is the minimum % margin the agency will accept before refusing to send a cv to the employer for being too expensive?

What cut of your wages do agencies get?
-- None! It is the agency that pays you. They don't take anything off that.

They will certainly pay you less than the client pays them. But what the client pays is not your wages.

As for the minimum margin, obviously that depends on the agency, the agent, and any other factors that you might have in your favour (I'd guess none in your case). But generally if you have found the client yourself and then need the agency for some reason, they are likely to tell you that it's not worth doing it for less than 5%. If you actually get the contract through the agency, 10-20% is normal. How much do you think it "should" be? Bear in mind that an agent is himself working in a market: if he doesn't get paid enough he won't do it. Divide what he is willing to work for, by the number of contractors that he has in place at a given time: there's the rate that he needs, work out that as a % of the contractor's rate. You might be surprised at how few working contractors each agent has. Not to mention how little of the agency margin goes to the agent.

Anyway, I'd better stop now, I'm becoming too sympathetic to agents. Now look what you've done!

[smiff]

Anyway, I'd better stop now, I'm becoming too sympathetic to agents. Now look what you've done!

Nurse!

[TheBigYinJames]

Anyway, I'd better stop now, I'm becoming too sympathetic to agents. Now look what you've done!

Next you'll be telling us what a fine lot of fellows estate agents and used car salesmen are.

[TheBigYinJames]

You might be surprised at how few working contractors each agent has. Not to mention how little of the agency margin goes to the agent.

Typical OTE for a junior agent working for a large company: £17k. Remember that next time you feel like tearing a strip off one.

[expat]

Typical OTE for a junior agent working for a large company: £17k. Remember that next time you feel like tearing a strip off one.

even that is too much for a worthless parasite ........ ah, I'm feeling better now!

[QueenElizabeth]

What cut of your wages do agencies get?
-- None! It is the agency that pays you. They don't take anything off that.

They will certainly pay you less than the client pays them. But what the client pays is not your wages.

As for the minimum margin, obviously that depends on the agency, the agent, and any other factors that you might have in your favour (I'd guess none in your case). But generally if you have found the client yourself and then need the agency for some reason, they are likely to tell you that it's not worth doing it for less than 5%. If you actually get the contract through the agency, 10-20% is normal. How much do you think it "should" be? Bear in mind that an agent is himself working in a market: if he doesn't get paid enough he won't do it. Divide what he is willing to work for, by the number of contractors that he has in place at a given time: there's the rate that he needs, work out that as a % of the contractor's rate. You might be surprised at how few working contractors each agent has. Not to mention how little of the agency margin goes to the agent.

Anyway, I'd better stop now, I'm becoming too sympathetic to agents. Now look what you've done!

Thank you for the straight answer.

I consider what the client is willing to pay the agency for my services my "potential" rate. As I become informed about how agencies operate, I can begin to approach the potential. Especially, the info also helps me to gauge what to charge when I negotiate a contract directly with a client without using an agency (I have just done that, and didn't do a very good job at it).

[QueenElizabeth]

You've moved from one country to another without doing any research, you don't even know how the tax system works, were just given work by being placed in a role which pays over twice the national wage, the agent did you a favour and paid you above what you asked, you've got work in one of the depressed parts of the country, you've got a second role paying more than the first, in a country where about a quarter of the adult population has no work,

AND YOU'RE MOANING ABOUT IT.

****off back home then if you're not happy you ungrateful tulip.

Thank you Mr. Negative.

One reason among many why I am a contractor is because I'm interested in maximizing income. Therefore I can't just take the advice that many are offering here: Accept whatever rate I'm offered by the agency and be done with it.

The fact is, the agencies rarely propose a rate to me - I have to cook up a figure, and that is without knowing what is fair in this market... until I ask questions like what is normal for agencies to get.

I would think it more likely that an inexperienced contractor would undersell his worth to the advantage of the agency than the other way around - they are the professional negotiators.

[NickFitz]

Not to mention how little of the agency margin goes to the agent.

If any...

I was placed on a three month contract that ended up being renewed repeatedly and lasting two years. Towards the end of that time, the agent mentioned that he was only paid commission on the original three month placement - he didn't personally make a single penny from the renewals

[LittlestHobbo]

he didn't personally make a single penny from the renewals

sh*****TTTTT that pig nearly hit me on the head, and i'm on the 11th floor..

[NickFitz]

sh*****TTTTT that pig nearly hit me on the head, and i'm on the 11th floor..

Given how hard the agencies work to shaft us, why are you surprised that they also shaft their own staff? As I said, he personally made no further commission - the agency was still taking the same cut, but he didn't see any of it.