Negotiating rates

[omen666]

I've got a similar situation this week....

I've been with this client 3 months. In that time I've been switched to a project that was off the rails. Its their highest value and profile project and in 5 weeks I have brought much improvement.

The client is very happy and has started to add more responsibility and is now asking me to join second interviews he his holding for his senior management team as he values my opinion.

Renewal has been offered, and its been left to me to get the ball rolling with the agent.

When I took the contract I had been lazing around for 6 months so was happy to take a 'low' rate for managing a project well within my capability/capacity.

Now I am managing a death march project and back into the swing of things I am going to push for much more.

My problem is I am convinced the agent is on significantly more than 15-20%. I've asked for confirmation of rate verbally and in writing but they won't answer the question directly. Just keep saying it was really low as they only normally do permy recruitment with the client, so this was a leader in to more business. But I know of two long standing contractors onsite with the same agency because I sign their timesheets!!!

So I smell a rat! I've told the agency the increased rate and let them I know that think they need to reassess their margin.

As I have a very good working relationship with the client I am thinking of letting them know my suspisions about the agents margin. Good idea or not?

[Lucifer Box]

I've got a similar situation this week....

I've been with this client 3 months. In that time I've been switched to a project that was off the rails. Its their highest value and profile project and in 5 weeks I have brought much improvement.

The client is very happy and has started to add more responsibility and is now asking me to join second interviews he his holding for his senior management team as he values my opinion.

Renewal has been offered, and its been left to me to get the ball rolling with the agent.

When I took the contract I had been lazing around for 6 months so was happy to take a 'low' rate for managing a project well within my capability/capacity.

Now I am managing a death march project and back into the swing of things I am going to push for much more.

My problem is I am convinced the agent is on significantly more than 15-20%. I've asked for confirmation of rate verbally and in writing but they won't answer the question directly. Just keep saying it was really low as they only normally do permy recruitment with the client, so this was a leader in to more business. But I know of two long standing contractors onsite with the same agency because I sign their timesheets!!!

So I smell a rat! I've told the agency the increased rate and let them I know that think they need to reassess their margin.

As I have a very good working relationship with the client I am thinking of letting them know my suspisions about the agents margin. Good idea or not?

As you get on well with the client and they have told you to manage the renewal yourself, just ask your client what they are paying the agency to ensure that you "secure the right price for them". I am sure they will happily tell you. Every client of mine I have asked has just told me. Don't dick around with the agent, they will just waste your time with lies and evasion. Present them with a fait accompli. If you manage this well, the client might be so impressed at what you do and so underimpressed at what the agency does there may be a possibility of removing the agent from the food chain.

Don't be bashful, just ask outright. The worst they can say is "not telling you" in which case you can legitimately ask how you are expected to arrange a renewal without knowing the costs.

[Rebecca Loos]

Have you considered going direct with the client? Would the client be happy with that? Have you opted out of the Regulations?

[omen666]

Just spoke to client. He doesn't know margin either!

I've told him my suspicisions...he thanked me, so I suggested he ask them direct. I told him that I was told he negotiated hard, he said he didn't question the rate. So I am positive this is the agent winning both ends.

We agreed he would demand their margin details and he would ask them to reduce it.

He also asked if there was another way around this....very leading....any ideas?

If we both squeeze the agent hard enough I think everyone should be happy, but are there any other 'avenues'

[omen666]

Have you considered going direct with the client? Would the client be happy with that? Have you opted out of the Regulations?

I have opted out...does that help? (apologies, last time I contracted the regs were not in place)

[boredsenseless]

Hmmm hold on - maths can come into play here - if you tell your boss what you get and he tells you what he pays out - I think unless maths has changed since I did gcse's that you have the margin.

If he's happy talking to you about the negotiations he had he should be happy to discuss the numbers too.

If he isn't then he isn't interested in you knowing the margin either cos it won't take a rocket scientist to derive this from your rate and the agnecy margin

[Rebecca Loos]

no that doesn't help - if you have opted out then you can't go direct. Well that's one avenue closed, think of others.

[omen666]

Hmmm hold on - maths can come into play here - if you tell your boss what you get and he tells you what he pays out - I think unless maths has changed since I did gcse's that you have the margin.

If he's happy talking to you about the negotiations he had he should be happy to discuss the numbers too.

If he isn't then he isn't interested in you knowing the margin either cos it won't take a rocket scientist to derive this from your rate and the agnecy margin

Agreed, but it is one thing to discuss the 'framework' of the deal that went on and another to talk actual figures. There is a degree of trust in the working relationship, but he might actually being trying to squeeze both the agent and me, so it would be a leap of faith I guess

[Lucifer Box]

Just spoke to client. He doesn't know margin either!

What? That is complete bollox. How can your client not know what they are paying for your services? Do they just tell the agency to direct debit their bank account with whatever they think is fair?

If they won't tell you, just forget stressing about it and tell the agent what rate you want and leave them to sort it out. It takes two to tango and it sounds to me as though the client is just getting you to do something they'd rather not do.

[omen666]

What? That is complete bollox. How can your client not know what they are paying for your services? Do they just tell the agency to direct debit their bank account with whatever they think is fair?

If they won't tell you, just forget stressing about it and tell the agent what rate you want and leave them to sort it out. It takes two to tango and it sounds to me as though the client is just getting you to do something they'd rather not do.

He is suggesting he doesn't know my rate and hasn't specifically asked the agent what margin they are applying otherwise he could do the maths.

I do agree with you on approach.

I've told the agent my rate requirement and that I would expect them to review their margin if the client pushes back.

I've told the client I know the agent to be on a margin that is not competitive.

Its now up to them to deal with this. If I don't get my minimum requirement I will be professional, finish my contract and move on.