Negotiation: What cut of my wages do agencies get?

[heyya99]

Is asking for a rate increase upon renewal time after only being onsite 4.5 months cheeky/waste of time?

[TheFaQQer]

Hence in permie scenario, the client has paid the commission. In contractor scenario, the contractor has paid the commission. Thats why contractors get miffed about agencies!

In the contractor scenario, the client pays the agency the rate that they agreed; the agency then pays the contractor a percentage of that rate, which they agreed. The client pays the agency the rate agreed for finding someone appropriate; the agency pays the rate agreed for finding someone appropriate. The commission is paid by the client.

And what do you think would happen in this situation...client wants a "senior developer", paying £500/day agent "find" candidates (search on cwjobs really), contacts them and "joe" will do the role for £300/day but his skills are average. "fred" will only do the role for £400/day but his skills are great and a 100% match to what the client wants. You and I know what will happen when the agency picks someone to put forward to the client...Fred would be perfect and enhance the clients projects...but the agency will put "joe" forward because they can make more money off him. Happens all the time folks.

The person who is vetting the contractors has a responsibility to make sure they are up to the task. If the client looks at the candidate, checks their CV and interviews them to find something about their skills, and they choose an unsuitable candidate then they need to review their recruitment process.

I did a project a while back where at the start of the project, I was told I was too expensive and they had found someone who was £150 a day cheaper than me. They wanted me, and if I'd come down to that level, then the role was mine. I walked away. Two years later, same client came back to me, and offered more than my original rate because they needed someone to rescue the project from the mess they now found themselves in. They deliberately chose to underpay, and suffered the consequences. Happens all the time.

[TheFaQQer]

Is asking for a rate increase upon renewal time after only being onsite 4.5 months cheeky/waste of time?

Justify your existence and you might stand a chance. Asking for an increase just because you've done what was expected of you wouldn't get a look in as far as I'm concerned.

Why should anyone offer you more money - is the role different? Have you got extra responsibilities in the role that you didn't know of before? Basic things like "the commute is worse than I thought" or "the cost of living is higher" or even "I've been caught by the 24 month rule so I can't claim expenses" aren't good enough, IMHO - they are things you should have been aware of.

Make a good enough case, though, and you might get what you want.

[heyya99]

Justify your existence and you might stand a chance. Asking for an increase just because you've done what was expected of you wouldn't get a look in as far as I'm concerned.

Why should anyone offer you more money - is the role different? Have you got extra responsibilities in the role that you didn't know of before? Basic things like "the commute is worse than I thought" or "the cost of living is higher" or even "I've been caught by the 24 month rule so I can't claim expenses" aren't good enough, IMHO - they are things you should have been aware of.

Make a good enough case, though, and you might get what you want.

I see what you're saying but for all the renewals and rate rises I've had, the need for justification has never come up. The agent has never asked for a reason why the client should pay more for my service. It's always been a yes to a rise and negotiation as to what that rise is. A friend of mine, 6 months into contracting, got a rate rise without any justification.

What I'm saying, your point makes sense but is it fitting with the real world.

[PerfectStorm]

I think if you're going into any sort of pay negotiation with a "justification" then you're immediately putting yourself on the back foot. Go in with a price, be prepared to haggle or walk out. Justifying it says that you're there to have the justification declined.

You're a business, would you look for the plumber's justification for an increased rate?

[TheFaQQer]

I see what you're saying but for all the renewals and rate rises I've had, the need for justification has never come up. The agent has never asked for a reason why the client should pay more for my service. It's always been a yes to a rise and negotiation as to what that rise is. A friend of mine, 6 months into contracting, got a rate rise without any justification.

What I'm saying, your point makes sense but is it fitting with the real world.

It depends on who is going to give you the rise. When I've had people ask for an increase, just because, it's always been knocked back.

Your experience obviously varies, though, so ask for the increase and get it.

[TheFaQQer]

You're a business, would you look for the plumber's justification for an increased rate?

Yes - I'd ask why he needed to charge more. Would you just accept it?

It's a question of supply and demand. If my plumber asked for an increase just because he was mid-way through a job and wanted more money, then I'd fire him and get another plumber - there are plenty around. Conversely, he can probably afford to take the risk (in the short term) because there is work for plumbers and he can easily change client - until he gets the reputation for trying to hold his customers over a barrel each time, of course.

If you know you can walk away from the role straight into something which pays an equivalent or better rate, then asking for an increase because you can is certainly one strategy that your business could adopt. This becomes potentially more viable if you know that the client cannot replace you easily - you can demand something and they pretty much have to pay or suffer the consequences. Again, this only works while people don't know that you try to shaft them at every opportunity, at which point you may find that your business model suffers.

[colinrobinson]

Yes - I'd ask why he needed to charge more. Would you just accept it?

It's a question of supply and demand. If my plumber asked for an increase just because he was mid-way through a job and wanted more money, then I'd fire him and get another plumber - there are plenty around. Conversely, he can probably afford to take the risk (in the short term) because there is work for plumbers and he can easily change client - until he gets the reputation for trying to hold his customers over a barrel each time, of course.

If you know you can walk away from the role straight into something which pays an equivalent or better rate, then asking for an increase because you can is certainly one strategy that your business could adopt. This becomes potentially more viable if you know that the client cannot replace you easily - you can demand something and they pretty much have to pay or suffer the consequences. Again, this only works while people don't know that you try to shaft them at every opportunity, at which point you may find that your business model suffers.

I had a client once that thought I was mission critical, would not let me take holiday in contract fair enough id contracted to be there, I took holiday on renewal said id be back in 3 weeks. On the monday I got back they said they have learned i wasnt Mission critical and served notice. you take the same risk when negotiating rate they will look to see if you can be easily replaced before agreeing to increase.