What is your opinion?

[Denny]

Denny,

Why dont you outline a model of how you think a recruitment business "should" work

I already have.

At the moment, the language, relationship between client/agency/contractors doesn't reflect the legal position or the facts.

Main things that should change in the model I've written about and been published on is:

End clients should pay retainers to recruiters to source candidates and should pay for this service. The concept of on-site mark ups should be done away with completely because it's wrong that recruiters should rely exclusively on the success contractors make of their own role on site. At the moment, clients don't actually value the work recruiters do themselves because they don't pay for it. This is bad for client, recruiter and contractor because.....

Recruiters are disincentivised from working hard to source the right candidates and many skip the legal process of carrying the right checks etc. and are understandably tempted to just shove the first five suitable CVs forward and ignore the rest.

Clients lose out because they don't get the pick of the best contractors and they treat recruiters with contempt because they don't have to pay them for their own services. That's why they can't be bothered to check that the job specs are accurate and that roles are really live - what have they got to lose? If they paid upfront for your own services, they might be less inclined to be so cavalier about their requirements.

This model also exposes contractors to greater risks that are unfair with wasted interviews, false hopes of landing a role and contractors wouldn't be treated like sub-human commodities. On UK Recruit candidates have been compared to shoes, cars and other objects.

No wonder there are so many cowboy contractors and recruiters around.

[DodgyAgent]

I already have.

At the moment, the language, relationship between client/agency/contractors doesn't reflect the legal position or the facts.

Main things that should change in the model I've written about and been published on is:

End clients should pay retainers to recruiters to source candidates and should pay for this service. The concept of on-site mark ups should be done away with completely because it's wrong that recruiters should rely exclusively on the success contractors make of their own role on site. At the moment, clients don't actually value the work recruiters do themselves because they don't pay for it. This is bad for client, recruiter and contractor because.....

Recruiters are disincentivised from working hard to source the right candidates and many skip the legal process of carrying the right checks etc. and are understandably tempted to just shove the first five suitable CVs forward and ignore the rest.

Clients lose out because they don't get the pick of the best contractors and they treat recruiters with contempt because they don't have to pay them for their own services. That's why they can't be bothered to check that the job specs are accurate and that roles are really live - what have they got to lose? If they paid upfront for your own services, they might be less inclined to be so cavalier about their requirements.

This model also exposes contractors to greater risks that are unfair with wasted interviews, false hopes of landing a role and contractors wouldn't be treated like sub-human commodities. On UK Recruit candidates have been compared to shoes, cars and other objects.

No wonder there are so many cowboy contractors and recruiters around.

So if retainers are paid to agencies, who then runs the contract?

[malvolio]

Arguably, why does it need running? You will have one between you and the client for the provision of skilled reources as and when necessary. I take on a role through you and between you and me there is only the factoring of my invoices that I'm worried about - while I'm happy to bill the client directly, I'm pretty sure most of them would much prefer to have a few monthly invoices to deal with.

You (not you personally, agencies in general) need to start separating the sales and provisoning bit from the invoice factoring bit. There is no need at all to bundle them as a single catch-all service and the wimps that need that level of support are mostly in umbrellas these days anyway. And beyond sourcing the roles, which I agree is what you are good at, and paying my invoice, which some of you struggle with, you have no further real-world value.

Finally, if you started treating contractors as businesses and not temps, then you wouldn't have to worry about charging finders fees, since I'd be selling a service, not filling a job, and I for one would be more than happy to pay you for that service. Understand??

[boredsenseless]

Arguably, why does it need running? You will have one between you and the client for the provision of skilled reources as and when necessary. I take on a role through you and between you and me there is only the factoring of my invoices that I'm worried about - while I'm happy to bill the client directly, I'm pretty sure most of them would much prefer to have a few monthly invoices to deal with.

You (not you personally, agencies in general) need to start separating the sales and provisoning bit from the invoice factoring bit. There is no need at all to bundle them as a single catch-all service and the wimps that need that level of support are mostly in umbrellas these days anyway. And beyond sourcing the roles, which I agree is what you are good at, and paying my invoice, which some of you struggle with, you have no further real-world value.

Finally, if you started treating contractors as businesses and not temps, then you wouldn't have to worry about charging finders fees, since I'd be selling a service, not filling a job, and I for one would be more than happy to pay you for that service. Understand??

I agree - I'd be more than happy to pay an agent to act on my behalf to perform introductions to clients which I then serviced. What I don't do (and therefore have to do my own selling) is engage with a resourcing consultant who takes a cut every day.

I'd love to see the situation Malvolio suggests, but its unlikely to happen in the near future. So I'll concentrate on doing it myself.

On the other hand I wish everyone would stop beating agents up! They only exist because as a breed we are traditional to inept to source our own work. Don't give me any of that crap about big companies like banks only work with agents. Some of my biggest customers are banks and there isn't and never has been an agent in place, just a lot of bl00dy hard work networking and relationship building. If you can't be bothered to put in the graft to build the opportunity don't whinge about having to sing to an agent's tune.

So in summary - Agents why don't you look at ways to represent us based on a success fee payable by the contractor. Contractors go on a sales course and learn to market yourself.

[DodgyAgent]

Arguably, why does it need running? You will have one between you and the client for the provision of skilled reources as and when necessary. I take on a role through you and between you and me there is only the factoring of my invoices that I'm worried about - while I'm happy to bill the client directly, I'm pretty sure most of them would much prefer to have a few monthly invoices to deal with.

You (not you personally, agencies in general) need to start separating the sales and provisoning bit from the invoice factoring bit. There is no need at all to bundle them as a single catch-all service and the wimps that need that level of support are mostly in umbrellas these days anyway. And beyond sourcing the roles, which I agree is what you are good at, and paying my invoice, which some of you struggle with, you have no further real-world value.

Finally, if you started treating contractors as businesses and not temps, then you wouldn't have to worry about charging finders fees, since I'd be selling a service, not filling a job, and I for one would be more than happy to pay you for that service. Understand??

I accept that factoring the contractors is no big deal, but it still has to be done; although we are mainly dealing with "blue chips" they still need a proper payment service to deal with this. Factoring through an agency at say 3% is one such option but for many infrequent users of contractors splitting the "supply chain" like this would be of little interest. I will concede that we gat paid disproportionate amonts for the service.

Treating contractors as businesses is fine provided that a service is what a client actually wants. If the client effectuively wants a few bums on seats or someone to sort out problems (that he may not understand) then producing a project plan, scoping it pricing it etc is a shag they dont really want (not always I concede). Nor do they want to do the same or even write an SLA for a few programmers or desktop support people.

The reason why the existing model remains unchallenged is because it offers all parties the most effective way of buying and selling contractor services. That is not to say there are not opportunities for more "project/sla" work, because there is. It is just that agents and contractors like everyone else just want to get on with "what they know", and cannot be shagged to go through the process of identifying and doing proposals (time consuming) for such work. I have tried it myself, and it has turned out to be costly and time consuming. It needs determination, planning, patience and hard cash to start such a business off.

In quite a few instances contractors have seized opportunities to group together and ring fence work (sometimes with the help of an agency even). many have succeeeded in building succesful software businesses on the back of it; I just dont think most contractors really want to do any more than park their arses, insult the likes of myself and get on with a bit of work.

I am interested in how you (Denny) are going to develop the fee payment terms for us agencies though, if we are not going to be factoring contractors pay.

[DodgyAgent]

I agree - I'd be more than happy to pay an agent to act on my behalf to perform introductions to clients which I then serviced. What I don't do (and therefore have to do my own selling) is engage with a resourcing consultant who takes a cut every day.

Well if my fee was say £10,000 what would be the best way for you to pay it?
At the end of the contract (dont think you would find many agents prepared to wait that long)?
At the start of the contract? (dont think you would find many contractors prepared to shell that out at the start)

Why not pay me in equal payments during the tenure of your contract, so if the contract gets cut short then so do the fees you pay your agent?
How about that for a novel idea

Oh and by the way I will manage your pay and contracting terms at the same time

[Mordac]

>In quite a few instances contractors have seized opportunities to group together and ring fence work (sometimes with the help of an agency even)

I've even had an agent suggest this to me in the past. He was happy with the arrangement as long as I put the recruitment business through them, splitting the margin. Sometimes contractors are in a better position to spot potential business that the agent.
I'm sure everyone who's been contracting for a decent length of time knows a few good agents. Use them wisely, and things can be substantially better for both parties. Thanks to a bit of smart thinking, I now have a few freelance clients (usually too small to justify taking on contractors but still potentially lucrative short-term) for those annoying gaps, and quite a good IR35 defence if the need arises.

[malvolio]

Oh and by the way I will manage your ... contracting terms at the same time

Careful - that's the bit you consistently get wrong and the bit tha causes all the grief...

Finders Fees are easy - x days at starting rate, payable on commencement. Factoring charges are as you say; 5% is more than enough to cover the overhead. You make roughly £3.5K for the average three month contract, knock off the ongoing factoring costs, and you're looking at £2k-ish. I'll happily pay you that on my standard 30-day terms against your invoice.

[DodgyAgent]

Careful - that's the bit you consistently get wrong and the bit tha causes all the grief...

Finders Fees are easy - x days at starting rate, payable on commencement. Factoring charges are as you say; 5% is more than enough to cover the overhead. You make roughly £3.5K for the average three month contract, knock off the ongoing factoring costs, and you're looking at £2k-ish. I'll happily pay you that on my standard 30-day terms against your invoice.

Could be a runner malvolio make it £4k and I will chuck a lunch in

[DodgyAgent]

make it £4k and I will chuck a lunch in

I forgot to ask:

With fries?