Agency margins in "current climate" ...

[pzz76077]

Sounds like another case of buyers remorse to me.

You have an easy choice to make - use agents or don't use agents. What do you wanna do??

Personally, I have not used agents for many years now, but miss some of the services they provided like the credit buffer that they are between the client and me.
The last client co (30Bn t/o) I worked for via an agent had a policy of not paying anyone for 6 months if they could help it. Imaging the number of bull tulip excuses the agent had to chase knowing that he had to pay me weekly (I only work on weekly terms) and not see a penny for anything up to 6 months- would you be able to stand not being paid for that length of time, how much would that be worth to you not to have to spend an hour a day chasing payment??
I would say that you are not getting too bad a deal - the average top 5 consultancy would charge you out a 1200 a day and still only pay you a couple of hundred quid for your trouble.

PZZ

[malvolio]

See, you really don't understand.

Agencies are run by accountants. Their interest is the bottom line. They set sales targets for all their staff, that's how the agents earn their income. You are a commodty item they are selling to their clients. You don't generate any sales, you don't drive the market, you don't do any of the sales effort, nor do you have any influence at all over the client untill you've been on-site a while. If you think you do, go get some direct work.

They will have sold the role to the client at a sensible market rate, which is simply the one the client is prepared to buy at. They also sell a whole package of comfort factors and support that you never see. Then they sell the work itself to you at a rate you are happy to accept. There is no mandatory linkage between the two prices. If you're underpricing your work, who's problem is that?

[Spacecadet]

They also sell a whole package of comfort factors and support that you never see

I'm starting to think you are an agent

The only extra added benefit is for larger clients with quite a number of contractors.
In these cases the presence of an agency streamlines the billing process

You are a commodty item they are selling to their clients.

In most cases the agency hasn't got a client untill they have successfully placed a contractor with them.
Any client with their head screwed on will not be loyal to an agency

[hgllgh]

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

How can we walk away from crap rates when they are being systemically pushed on to us by agencies? i.e. if there are enough agencies with this business ethic and there are no viable routes to bypassing the agency then they are forcing us to work through them aren't they.

Agencies being middlemen will take advantage of the market and up their cut when they can. Thats how they make their money

I rest my case.

The system of supplying contractors through agencies is fundametally flawed as it leaves both the worker and the client open to whatever margin the agency can extract from the current market for doing (lets be honest) not an awful lot

[Spacecadet]

How can we walk away from crap rates when they are being systemically pushed on to us by agencies? i.e. if there are enough agencies with this business ethic and there are no viable routes to bypassing the agency then they are forcing us to work through them aren't they.

What I do is I turn down roles until an agent comes to me with a rate which is acceptable.
If they tell me a rate and its lower than I can accept I tell them what they'll need to get it up to then end the conversation.
I'm still getting 50% more than I was when I started contracting over 3 years ago

There are ways of bypassing the agency. Its not difficult just time consuming.

[SameOldStory]

How can we walk away from crap rates when they are being systemically pushed on to us by agencies? i.e. if there are enough agencies with this business ethic and there are no viable routes to bypassing the agency then they are forcing us to work through them aren't they.



I rest my case.

The system of supplying contractors through agencies is fundametally flawed as it leaves both the worker and the client open to whatever margin the agency can extract from the current market for doing (lets be honest) not an awful lot

If you believe the agencies get money for doing not a lot, then why don't you become an agent and undercut them, making slightly less than them for doing "not a lot".

PS - what do you want out of this? Legislation to fix/limit the margins of agencies? or just to force them to tell you.

Or is this just a "It's not fair" rant?

[jmo21]

How can we walk away from crap rates when they are being systemically pushed on to us by agencies? i.e. if there are enough agencies with this business ethic and there are no viable routes to bypassing the agency then they are forcing us to work through them aren't they.



I rest my case.

The system of supplying contractors through agencies is fundametally flawed as it leaves both the worker and the client open to whatever margin the agency can extract from the current market for doing (lets be honest) not an awful lot

how is that "resting your case"?

it's business.... clients want to use agents, it keeps us at arms length.

[George Parr]

how is that "resting your case"?

it's business.... clients want to use agents, it keeps us at arms length.

But our Ltd companies keep us at arms length. In the 21st C world of jobs boards I cannot understand why more companies don't advertise directly. It would be a small additional overhead for HR and would save the company thousands. If they want a plumber or a re-wire do they employ directly or go through a plumbers agency and pay a third extra? We are only 'commodities' after all.

[hgllgh]

But our Ltd companies keep us at arms length. In the 21st C world of jobs boards I cannot understand why more companies don't advertise directly. It would be a small additional overhead for HR and would save the company thousands. If they want a plumber or a re-wire do they employ directly or go through a plumbers agency and pay a third extra? We are only 'commodities' after all.

here here!

It also creates issues and complications with regards to employment contracts. e.g. upper contractual issues not under the control of the contractor

[Wirefan]

As a recruiter, I think any MARGIN over 25% are outrageous especially in the contract world. (In this case we are dealing with a margin of 33.3% and a markup of 50%) whichever way you look at it is ludicrous in my opinion. The agency is laughing all the way to the bank with that one. As is the recruiter who is probably taking home c£220 a month just off that one contract.

Of course there is business development work which has gone on and it's extremely tough to gain new business in a dog-eat-dog market like recruitment, but for the work you put in on the actual recruitment side, margins of that amount are not justified in most, if any situation. Certainly not in the SW Engineering space and again, not in the contract world.

Jonathan
Morson International