Agency margins in "current climate" ...

[hgllgh]

Said it before, will no doubt say it again. They are not getting a cut of your anything, you're getting a cut of theirs. They did all the hunting around and found the work, plus you accepted the rate on offer. You want to set the margin rules, find your own work and negotiate your own rates.

Highly debateable. In this particular case the agent didn't do any searching around for the work at all. they have an agreement with this particular client as do most other agencies and are just filling existing roles with cvs.

Who is doing that actual work? .. the contractor. The cut is being taken from the revenue generated from the work the contractor carries out, not the other way around. So I would argue it is a cut of my rate.

"Find your own work" ... well, a large part of the problem is that client companies seem to rely too much on agencies instead of sifting through a few cvs themselves. So there isn't really much scope for finding your own contract. In 4 years of contracting I have not found one credible website dedicated to direct contracts that companies actively use...

[thunderlizard]

Who is doing that actual work? .. the contractor. The cut is being taken from the revenue generated from the work the contractor carries out, not the other way around. So I would argue it is a cut of my rate.

If you really want to work yourself up, work out how much benefit your end client is getting from whatever it is you're doing. Say they're generating £0.5m business from a 6 month project at your £200/day (=£24k to you): that's (500000-24000)/24000 = 1983% markup.

[Ruse]

Highly debateable. In this particular case the agent didn't do any searching around for the work at all. they have an agreement with this particular client as do most other agencies and are just filling existing roles with cvs.

Who is doing that actual work? .. the contractor. The cut is being taken from the revenue generated from the work the contractor carries out, not the other way around. So I would argue it is a cut of my rate.

"Find your own work" ... well, a large part of the problem is that client companies seem to rely too much on agencies instead of sifting through a few cvs themselves. So there isn't really much scope for finding your own contract. In 4 years of contracting I have not found one credible website dedicated to direct contracts that companies actively use...

Totally agree, the agent has shafted you good and proper. Any margin more than 20% is too high IMO. In the majority of cases where you are dealing with a large client and established agents the agent does bugger all work in terms of finding the business. Even if the agent did have to trawl up the business it doesn't mean they should be entitled to a 1/3 cut of the cash you are toiling hard every day to earn whilst they sit in their offices making the odd call.

I just can't comprehend the posts from other "contractors", I am presuming there must be some "under cover" agents on here.

[malvolio]

Somethimes I really despair...

If you don't understand the business you're in and the way the supply market works - which some of you clearly don't - then you're not in a position to argue. Go to an agency and say "You're making 33% out of me, I want some" and their first question will be "Why?". All that carp about "I'm the one doing the work" won't make a scrap of difference; they spent a few years building a business and getting ongoing realtionships established so things just "happen" to fall in their lap. You haven't. Go figure.

And no, I'm a freelance, not an agent - most of the ones on here identify themselves as such anyway.

But never mind, most of the market will be gone in about five years time... see my latest blog as to why.

[George Parr]

I do wonder how agents margins are still holding out at 33% whilst contractors rates are being cut to the bone. Okay, they are getting 33% of a lesser amount but there still seems to be more agencies than jobs and the agencies are still doing fine (certainly they don't have enough time on their hands to return or even take calls so that is my inference). The recession isn't cutting both ways.

[Jeebo72]

Look, you accepted £200 a day. That's it.

You can however, make yourself invaluable over the next month or two. Then, assuming you are clever enough to make sure your release is no more than 1 week, hand in your notice...

Otherwise stop whinging about contracts you've freely signed up to ...

[hgllgh]

they spent a few years building a business and getting ongoing realtionships established so things just "happen" to fall in their lap. You haven't. Go figure.

So because of this you think it is justfied/fair that I am here 8 hours a day to get £200 and they are here 0 hours a day and take £100?

I fully understand the supply market for contractors. I am auguing that there is a certain amount of exploitation of contractors especially "in the current market" by agencies taking undeservedly large margins.

As a freelancer and PCG stalwart I am surprised by your stance on this

[Spacecadet]

Somethimes I really despair...

If you don't understand the business you're in and the way the supply market works - which some of you clearly don't - then you're not in a position to argue. Go to an agency and say "You're making 33% out of me, I want some" and their first question will be "Why?". All that carp about "I'm the one doing the work" won't make a scrap of difference; they spent a few years building a business and getting ongoing realtionships established so things just "happen" to fall in their lap. You haven't. Go figure.

And no, I'm a freelance, not an agent - most of the ones on here identify themselves as such anyway.

But never mind, most of the market will be gone in about five years time... see my latest blog as to why.

I totally disagree with you on that

The agency are middlemen, they are reselling a service to a client and making a profit on the difference between what they charge and what they pay.
The contractor is the one doing the work that generates the profit and is what the end client is paying for.
The agency is entitled to make a profit, as you say, they have done plenty of leg work to get the work. But still, they are getting a cut on what the client wants to pay for the service and would pay direct to the contractor if circumstances allowed.

However, contractors should be prepared to either walk away from crap rates or take it and shut up. The agents are not forcing you to work through them
Agencies being middlemen will take advantage of the market and up their cut when they can. Thats how they make their money

[Ruse]

As a freelancer and PCG stalwart I am surprised by your stance on this

I'm not, half of his comments come across as anti-contractor in any event, not to mention patronising and condescending.

You are unlikely to be able to re-negotiate after signing on the dotted line.
However I would make sure your direct line manager is aware of the situation if they are not already. A few years ago myself and another contractor in my team both approached the team leader for a raise just before renewal. She agreed, but didn't want to have to get added budget, she went to the agency and told them she was reducing their cut by 7.5% and giving it to us instead. Admittedly this was before the recession hit, but if the client wants to keep you they won't complain about giving you a raise form the agency cut.

[swamp]

It is no surprise to hear that agents have moved to a high margin business model. The S3 group of agencies have been doing this for years. Car companies and many other businesses are doing the same right now. Putting prices up in a recession is a sensible tactic for many.

There are ways round this as a contractor, to get a bit of that fat margin for yourself, but you have to have a bit of business acumen. Remember though that agents negotiate all day long and can run rings round even the most experiences contractors.