Agency margins in "current climate" ...

[hgllgh]

Just found out from my current client that the Agency who I am tempted to name is taking a 50% margin. I am on £200 a day for ASP.NET dev work and the client is paying £300 a day for me. When I was negotiating I did my best to get the rate up but the Agent kept banging on about the "current climate".

He was obviously lying through his back teeth to get the margin the greedy b*st*rd instead of giving me a half decent rate.

I touched on this a while ago, but it seems that agents are in fact using the credit crunch to INCREASE their margins. If I ask the agent what his margin is (which I will now do) any guesses on what answer I will get? I am pretty p*ssed off. Half tempted no negotiate a better rate in the knowledge I will just be cutting into his greedy margin

[pzz76077]

Margins are the same as they have ever been - what you can get away with.

No reason why you cant ask your agent to renegotiate the rate some way down the line.

PZZ

[Pondlife]

The margin on the work they found and you accepted is 33% not 50% (pedantic I know)

You accepted the rate on offer.

Of course they will try to maxisme their profit when times are hard.
No jobs = no placements = no commission = no hair gel.

Now you know that there's £100 per day in the pot to play for at your next renewal. I would suggest that rather than getting bitter you make damn sure that a) you get a renewal and b) the client wants you and only you. This gives you some leverage to beat the slimy basket with.

It sucks but such is life.

[hgllgh]

yeh but 50% is taking the p*ss. who do they think they are taking a missive cut for doing sweet FA.... Leeches.... Worse than the (w)bankers that enabled the credit crunch in the first place

[thunderlizard]

He's on 33% margin, not 50%. You work it out as his 100/300.

Agents don't need an excuse to get a high margin, that's their job. They will be telling you that in the "current climate" you're lucky to get £200. Meanwhile they will be telling the client that ASP.NET professionals of your calibre are like gold dust.

Why are you only half tempted to negotiate yourself a better rate? and even then out of spite, not common sense?

[hgllgh]

Well OK its 33% but looking at it another way they're getting 50% of what I get.

My point is that they are playing on contractor fears of there being too much competition on the bench and the credit crunch in general but they (or many of them) are just lying so when they say that to us when negotiating a new/renewed contract we should dismiss their statements ... and maybe ask them what their margin is to get the ball rolling.

[Pondlife]

Well OK its 33% but looking at it another way they're getting 50% of what I get.

Their markup is 50%. It's worth noting the difference so that when you ask what their magin is, you understand the answer.

My point is that they are playing on contractor fears of there being too much competition on the bench and the credit crunch in general

Of course, who wants to pay more for something than they have to?

but they (or many of them) are just lying so when they say that to us when negotiating a new/renewed contract we should dismiss their statements ...

Correct. Think of them like 2nd hand car dealers and you won't go too far wrong

and maybe ask them what their margin is to get the ball rolling.

Can't hurt. Although I would ask them to confirm what their margin is without you telling them what you know.

[Spacecadet]

Agents don't need an excuse to get a high margin, that's their job. They will be telling you that in the "current climate" you're lucky to get £200. Meanwhile they will be telling the client that ASP.NET professionals of your calibre are like gold dust.

To quote myself:

Telephone call 1
Agent: Unfortunately, due to the down turn in the economy a lot of contractors have either gone for permanent jobs or are refusing to leave steady contracts, as a result we'll be unable to secure anybody for that role under £400 per day
Client: Wow are things that bad? well we really do need some one in or we're fliped. Just make sure they're good

Telephone call 2
Agent: Unfortunately, due to the down turn in the economy a lot of companies are either relying purely on permament staff they already have or are shelving IT projects, however essential, till things pick up. As things are, this client is refusing to go above £200 per day, I'm really sorry, I've tried my hardest but i can't do anything to budge them.
Contractor: flip

[malvolio]

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.

Obviously use your knowledge of the numbers to negotiate with at renewal, but be clear in your own head exactly what it is you're dealing with.

[jmo21]

Well OK its 33% but looking at it another way they're getting 50% of what I get.

My point is that they are playing on contractor fears of there being too much competition on the bench and the credit crunch in general but they (or many of them) are just lying so when they say that to us when negotiating a new/renewed contract we should dismiss their statements ... and maybe ask them what their margin is to get the ball rolling.

As much as I hate agents, this is just business, as everyone has tried to explain.

For all you know, there were another 2 contractors smarter/better than you the client wanted who wouldn't budge on the rate. So the agent told clientco they were no longer available, and lucky you got he contract.

"In this climate" agents have a huuuuge advantage over us (loads of available contractors, not many roles), and their are milking it for what it's worth.

If you were in the situation where your niche skillset was in demand by lots of clientcos then you would be pushing your rate upwards wouldn't you?