Agency margin increase

[js123]

I’m fairly new to the contracting world so any advice would be appreciated…

I’ve been contracting at a client site for three months. The client wants to extend my contract for another three months at the same rate, however the agency has told me that they will only continue with the extension if they (the agency) increases their margin by 50%, therefore reducing my day rate.

As you can imagine, I am not a happy bunny.

Has anyone heard of this happening before?

[The Agents View]

I’m fairly new to the contracting world so any advice would be appreciated…

I’ve been contracting at a client site for three months. The client wants to extend my contract for another three months at the same rate, however the agency has told me that they will only continue with the extension if they (the agency) increases their margin by 50%, therefore reducing my day rate.

As you can imagine, I am not a happy bunny.

Has anyone heard of this happening before?

Firstly, that is absolutely insane business sense from the agency. I can understand the agent not negotiating on the margin (ie keeping it the same) as times are tough - revenue maximisation/protection is the name of the game, but that should NEVER be at the expense of the people who are out there doing it for us.

Secondly, if they want to increase their margin, they should be doing it with the client, not by taking money off of you.

Thirdly, I guess it depends on your contracts, but if they're talking about a lower rate, then they're talking about a different job. There may be some scope for getting out of your handcuff clause, at which point, go direct.

And finally - speak to the end client - tell them what the agency has said, and explain to them that you believe they are not representing their business in a positive light - I would suspect there would be a rocket up the jacksie of the agent pretty dammed quick.....

Hope that helps - good luck

TAV

[TykeMerc]

I’m fairly new to the contracting world so any advice would be appreciated…

I’ve been contracting at a client site for three months. The client wants to extend my contract for another three months at the same rate, however the agency has told me that they will only continue with the extension if they (the agency) increases their margin by 50%, therefore reducing my day rate.

As you can imagine, I am not a happy bunny.

Has anyone heard of this happening before?

Yes and I happily told them that if they tried it then they could urinate up a rope.
If the end client is happy to extend you then there is a reasonable argument that the Agent is not doing any more work since they don't have to go to the effort of locating a new bod and they're just trousering easy money, for that matter they should be getting a lower margin as they've already covered the cost of recruiting you.

Ask client co if they have another Agency on their PSL that they would be happy to hire you through. If you have the client happy enough with you that you can get them to exert pressure via the "mess with the margin and you're not welcome to supply any more staff from day x" then the current agent will retreat rapidly.

In short kick the Agent very hard and repeatedly in the nuts with spiked running boots, you have the upper hand.

[centurian]

I’m fairly new to the contracting world so any advice would be appreciated…

I’ve been contracting at a client site for three months. The client wants to extend my contract for another three months at the same rate, however the agency has told me that they will only continue with the extension if they (the agency) increases their margin by 50%, therefore reducing my day rate.

As you can imagine, I am not a happy bunny.

Has anyone heard of this happening before?

Personally, I would call their bluff. They agency will be afraid that if you don't extend then ClientCo will either

a) Not bother to replace you. You will have built up business knowledge and any replacement will be less efficient, so it might not make business sense to do so.

b) Use a different agency for the replacement

In either case, the agency will lose all of their revenue. 50% of nothing is still nothing.


Dropping a subtle hint to ClientCo might also do the trick. They will be pissed off if they lose someone because the agency wanted more money out of them in a recession. However, I would only do that as a last resort.


Of course, you have to weigh up the risks. There is always a chance that the agency will say "bye, bye then..."

[BrowneIssue]

been contracting ... extend my contract ... increases their margin by 50%, therefore reducing my day rate.

Taking.

The.

Piss.

Unheard of. Utterly outrageous. Worst story I've heard in a long time.

I bet the agent is frequently changing their underpants because they are laughing so much they are wetting themselves at the prospect of pulling this off.

We can safely assume the agent already has a HUGE margin on you and is now just taking the piss.

Talk to the client and tell them what the agent has said to you. Apologise really, really nicely and tell the client you will have to find another contract as it will not be financially viable for you to stay. Also, tell the client what the agent is giving you and watch the client's face.

In 95% of cases, the first extension on a 1st contract should result in a significant %age increase in your rate. Both the client and the agent took a risk on you because many contractors walk away in the first few days of their first contract. To compensate for this risk, the client will be paying a low rate to the agent and the agent will be taking a large margin, quite possibly over 40%. Because you have proved your worth, it is now normal for the client repay you and the agent by increasing the rate, and the agent to reward you by significantly dropping their margin to something more realistic, like 25%.

As you get wiser and more experienced, both the rate will go up and that margin come right down.

If in doubt, just email them this on Monday: "I have posted the question on a number of contractor boards and mailing lists and EVERYONE says you are taking the piss and that you should be rewarding me for loyalty. They are also saying I should 'name and shame' you whatever that means. So I demand at least another 25% to extend this contract." And they will still be quids in even if they agree.

Oo, I'm outraged on your behalf, I really am.

[BrilloPad]

Surely they now should be reducing their cut?

Even at a reduced cut they are making easy money : you have the upper hand. I hope you give them a good kicking.

Best of luck and let us know how you get on.

[trsisko]

I am to mad to even respond to this thread, give me their address i'll send the goons down to tell them not to mess with your wages...

[NotAllThere]

I am to mad to even respond to this thread, give me their address i'll send the goons down to tell them not to mess with your wages...

[Ivor Bigun]

.......Firstly, that is absolutely insane business sense from the agency.............

......I can understand the agent not negotiating on the margin (ie keeping it the same) as times are tough - revenue maximisation/protection is the name of the game, but that should NEVER be at the expense of the people who are out there doing it for us......

.........Secondly, if they (agency) want to increase their margin, they should be doing it with the client, not by taking money off of you............

..............There may be some scope for getting out of your handcuff clause, at which point, go direct............

...........speak to the end client - tell them what the agency has said,
Hope that helps - good luck........

LOL - "The agents View" - What a fraud - The OP is probably a sockpuppet of this wierd idiot!
Why would anyone want to pretend to be an ethical agent?

[Archangel]

I’m fairly new to the contracting world so any advice would be appreciated…

I’ve been contracting at a client site for three months. The client wants to extend my contract for another three months at the same rate, however the agency has told me that they will only continue with the extension if they (the agency) increases their margin by 50%, therefore reducing my day rate.

As you can imagine, I am not a happy bunny.

Has anyone heard of this happening before?

troll