Agency Commission / Markup

[northernladuk]

In most cases the client will give the agent a set rate to get a contractor. The agent does not get the contractor cheaper and pass the cost back to the client.... They should, as that should be whole point of getting an agent to get the best person for the best rate on your behalf.... but they don't. The money you are negotiating about with the agent is all his. What you fail to secure will go back in his pocket.

[AnotherGuy]

In most cases the client will give the agent a set rate to get a contractor. The agent does not get the contractor cheaper and pass the cost back to the client.... They should, as that should be whole point of getting an agent to get the best person for the best rate on your behalf.... but they don't. The money you are negotiating about with the agent is all his. What you fail to secure will go back in his pocket.

Then, If I'm understanding what you say, most of the roles advertised with ranges, really means if you were to go for the top of the range you are reducing the money the agent is profiting, and if another candidate goes for the bottom, that would be the ideal candidate for the agent, right?

I thought the usual was the agent getting a % of the rate he puts you forward, so being this as high as possible to what the client is willing to pay, would be more profitable for both, agent and contractor.

[northernladuk]

It can be the case. Some agents are on a fixed rate commission. The trick is trying to find out if they are. I always get them to confirm in email if they are which means there isn't much point negotiating.. But I've had an agent lie about that even via mail.

I wouldn't read too much in to the advertised rate. They will often be high to attract the best candidates and suddenly be a lot lower when an offer goes out.

[LondonManc]

It can be the case. Some agents are on a fixed rate commission. The trick is trying to find out if they are. I always get them to confirm in email if they are which means there isn't much point negotiating.. But I've had an agent lie about that even via mail.

I wouldn't read too much in to the advertised rate. They will often be high to attract the best candidates and suddenly be a lot lower when an offer goes out.

That's one good thing about banking - all agencies are on fixed percentages as far as I know, meaning that it's in their interest to get you as much as they can.

[psychocandy]

I've found out my agency is making a 100% markup. Ive seen the PO's to prove it.

Beat that!

Thats excessive

[SlipTheJab]

Thats excessive

It's more than excessive, I would be on to the agency about that and and would be kicking up a major fuss. If there was no joy I would walk and make sure the client knew why (but then again for the kind of rate I work at a markup like that would mean the client was paying well over the odds)!

[psychocandy]

Agree mostly with the comments about the agency margin being something between agent and client. After all, Tesco are not obliged to tell you how much they pay for the cornflakes they sell you.

BUT, its the underhandedness and lying that gets to me. Theres way too much of it. If all agencies were on a fixed margin, and the margin was clear for all to see there'd be much less hassle.

I've seen some right stunts played by agencies. Best one was new contractor who got told day before that client had 'budget' problems and £50 would have to come off day rate. Year down the line this guy went perm and mentioned it in passing. Of course, client knew bugger all. For a year, the extra £50 a day had been going in agents back pocket. This sort of thing is just wrong.

[LondonManc]

Agree mostly with the comments about the agency margin being something between agent and client. After all, Tesco are not obliged to tell you how much they pay for the cornflakes they sell you.

BUT, its the underhandedness and lying that gets to me. Theres way too much of it. If all agencies were on a fixed margin, and the margin was clear for all to see there'd be much less hassle.

I've seen some right stunts played by agencies. Best one was new contractor who got told day before that client had 'budget' problems and £50 would have to come off day rate. Year down the line this guy went perm and mentioned it in passing. Of course, client knew bugger all. For a year, the extra £50 a day had been going in agents back pocket. This sort of thing is just wrong.

Spot on. But if there's a rate reduction outside of banking I'd always check with the client. Something along the lines of "My agent has said that you intend to cut my rate - are you not happy with the standard of work?"

[SlipTheJab]

Agree mostly with the comments about the agency margin being something between agent and client. After all, Tesco are not obliged to tell you how much they pay for the cornflakes they sell you.

BUT, its the underhandedness and lying that gets to me. Theres way too much of it. If all agencies were on a fixed margin, and the margin was clear for all to see there'd be much less hassle.

I've seen some right stunts played by agencies. Best one was new contractor who got told day before that client had 'budget' problems and £50 would have to come off day rate. Year down the line this guy went perm and mentioned it in passing. Of course, client knew bugger all. For a year, the extra £50 a day had been going in agents back pocket. This sort of thing is just wrong.

That's a difficult one, if the rate suddenly drops at offer stage do you take the hit or stand firm, I have a decent warchest behind me now so would tell them to shove it (followed by notifying the client why I was turning it down), slow market or small warchest puts a different spin on it I guess (agent is still a twunt if he's pocketing the difference regardless!)

[psychocandy]

Spot on. But if there's a rate reduction outside of banking I'd always check with the client. Something along the lines of "My agent has said that you intend to cut my rate - are you not happy with the standard of work?"

Yes but this was before he started. (It wasnt me BTW!) So I guess its difficult to check with the client whether this is true or not.

I guess 99.9% would be straight to the client in an existing gig if the agent said rate cut to clarify whats going on.

Thing is this agent got away with it too even after this all came out. Turned out he'd also told client he used a fixed margin - which he didn't.

But big company and it all got a bit lost between departments and agent knew this. Fair play to him I guess he was confident is his ability to blag his way out too.

Never met such a crook in my life. But then again this probably made him a successful agent...