Agency margins

[ladych]

Before sending my CV to an agency I ask their position on commission disclosure. In my experience, the one's that don't mind disclosing their standard rates seem to charge between 9 and 14 %.

I reckon if they're honest about commission they're more likely to be straightforward about everything else and as it's often the case that 3 agencies advertise the same job I use their reaction to the question to decide which one gets my CV.

[mailman]

Well, I disagree too

"No it's not your money. You haeva contract with the agency, not with the client."

If you want to believe its NOT your money...then you are the one who will be losing out

"In theory, they could take 90%, as long as they pay you the rate they promised, what's the problem? So what if the client is a sucker and pay over the odds. "

In theory they could take 99% of your rate...however...whether you would be prepared for that is a different thing. Having said that...Id settle for 1% of 100,000,000 as my daily rate

"If I was a client, at renewal time, I'd try to get the rate down (not the contractor rate, but the rate that the client is paying the agency), and of course if the agency tries to pass on that decrease to the contractor, then the contractor is perfectly entitled to refuse - in which case, in all probabilities, the agency will accept to earn less and pay the contractor as much as they were paying him for the initial contract."

I guess this would depend on the kind of client you are working for. If they want to drive down the cost of employing you then you are probably better off not working for them or the agency.

At the end of the day the power is in your hands. If you dont like your rate being cut then you can walk and they can try and replace the knowledge that has just walked out the door with you.

"But the "cut" is nothing to do with you, the contractor. In theory."

The cut has everything to do with you as you are the one having to carry the work out at the sharp end...and now for less money.

If you settle for less money then you only have yourself to blame.

However, at the end of the day it is YOUR money and not the agencies.

Mailman

[rebeccaloos]

Re: Well, I disagree too

Right,

I am a company. I want a contractor. I go to agent, and tell them "find me someone good and I'll give you £750 a day"

Agency looks for contractor. Finds one. Tells him/her: do the work and I'll give you £500 a day.

Contractor accepts. Gets his/hers £500 a day. Happy. No idea how much the company pays the agency. Not his/hers problem. Not his/hers business.
Client pays £750 a day to the agency. Doesn't know how much contractor is getting. No problem. Don't want to know. Not their business.



Now I know that by talking to the client, the contractor can find out how much the client is paying the agency - and by talking to the contractor, the client can find out how much the contractor is getting. But that's irrelevant to the contractual arrangements, where client pays agenciy who then pays contractor.

[Vetran]

Re: Well, I disagree too

yes but using your example if the contractor asks for £600 and gets £500 because 'the client can't afford to pay more' then there is a problem.

I had this situation, it was most annoying, unfortunately because of the market I couldn't walk.

[oaksoft]

Oh dear Vetran

yes but using your example if the contractor asks for £600 and gets £500 because 'the client can't afford to pay more' then there is a problem.

The only problem is that you don't feel able to negotiate. If I were you I'd spend a little money on getting that fixed by going on a one-day course. That's not meant to be patronising it is just good business sense.
Business is business and there is no concept of fairness or unfairness.

We get the perks of being in business (low tax) so we must be prepared to accept some pain (needing to negotiate).

I had this situation, it was most annoying, unfortunately because of the market I couldn't walk.
On any other day I'd be laughing now and shouting "Awww diddums did the nasty man tell you a wee lie?" at the screen but I'm feeling good today

[oaksoft]

RebeccaLoos, I'd go further....

In agreement with you but I'd add the following:-

9 times out of 10 I can assure you that a smartass contractor who thinks it is clever to go squawking to a client about the rate differential will:-

1)Look like a total loser for allowing himself to be stitched up.

2)Be considered a whinging pseudo-perm and attract guffaws of laughter from "his line manager" who is probably earning less than him anyway.

The client might negotiate the agent downwards but THIS WILL NEVER RESULT IN THE CONTRACTOR GETTING MORE MONEY. i.e. no matter what you do you, as a contractor, will never directly benefit from talking to a client about rates! There is no cost benefit so why do it?

[rebeccaloos]

Re: RebeccaLoos, I'd go further....

I completely agree, Oaksoft. That's why I was arguing the point earlier - it's none of my business what my client is paying the agency.

In fact, I have no idea what my current client is paying my current agency - I am not really interested! I am happy with my rate and, when/if I am not, I'll talk to the agency about revising it, or I'll change contracts.

I got a rate rise during my first renewal, and to this day, I have no idea if the client paid the agency more, or if the agency decided to pay me more regardless. OK, I doubt it, but it's not my problem!

If I want more money, I'll ask my agency, and it's none of my business whether they increase my rate thanks to their charging the client more, or taking it out of their cut!

Obvouisly by doing a good job at the client's, I increase my bargaining position but not directly.

[tim123]

Re: But Rebecca

What if the client uses the rate that he is paying to guage his expectations of the worker.

In what I do this is what happens, there are clients who pay below average rates and who expect little more than the contractor to turn up and look busy (I've worked with a few eho do exactly this), and there are above average paying clients who expect perfection (and more) for their money.

I've been doing this long enough to know which is which, but there are many who don't know. If they are used to the practices of a client in the former set and they are offered the same rate from another client they will expect the same type of environment, but if the agent is creaming the rate they will find that they have to work their ***** off just to keep up.

Is this fair?

tim

[oaksoft]

Tim

There is no fairness in business!

It is perfectly simple.

If you want to use an agency you must accept that you'll lose some control over your T+C and rate. Period.

No-one is forcing anyone to use agencies.

If you want to control rates and T+C then go direct and start pestering SME's but it's hard work, you'll wait longer before being paid if at all and work won't be continuous.

Why are you looking for fairness?

The client has no expectation of a contractor based on his rate. He needs a warm bum on a seat. The agent tells him it'll cost X. They negotiate and settle on Y. The agent then screws as much as he can out of the contractor because traditionally a contractor is not a genuine businessman and has no concept of negotiating and no real sense of how to fight for his own business without feeling personally involved and emotional.

Clients do not give a stuff about you.
Agents do not give a stuff about you.

Both just want to do business and get a job done whilst making as much profit as possible.

Only contractors end up getting emotional.

Also to answer your other point - clients don't care about how much you cost. The client person who pays will be totally unrelated to the client person who you report into so why would your rate make any difference to how they treat you?

Contractors must stop expecting to be able to have their cake and eat it at the same time.
No other business gets everything they want, why should we expect any different?

[tim123]

Re: Tim

Oaksoft.

Sorry you are wrong. The type of clients that I work for DO have an expectation of output which is related to the billing rate. I and many of my peers have experienced this and at least one client has told me it is the case. As to the 'project' not knowing what I cost, then this is incorrect too. IME all of my PMs have know exactly what I cost (or rather, what the billing rate is).

As to "Fairness", perhaps this was the wrong word. The discussion is about the concept of "is this my money"? I firmly believe that if the client is paying an enhanced rate for enhanced expectations then that extra belongs to *me*. I think that this is a simple concept and is unconnected to the discussion on now I actually negotiate or not so that I get it. I accept that some people negotiate better and will achieve a higher personal rate from a similar billing rate, but don't accept that the concept that this isn't my money.

tim