Agency Percentage. Does it matter or not?

[mavster07]

You have no "Right" to see the contracts. End of - it's a Business to Business relationship, in the same way that the client has no right to see the terms of your contract with us (although, we'd be stupid not to have the same terms back2backed on the contracts!)

The fact is, that you provide a product - your limited company sells that product at wholesale - agents sell that product at resale - the wholesaler never asks what the reseller is making - they can guide them, but not dictate to them.

How many times do people need to be told? YOU ARE A BUSINESS, YOU ARE NOT AN EMPLOYEE.

Interesting argument. Its just a pity that agencies don't understand that a contract means exactly that - a contract - and yet we see countless agencies providing lop-sided contracts that basically give all the rights to the agency and none to the contractor. By this I mean things like - Defining the Scope of the Engagement (so if it changes it can be deemed a change in the contract terms), Termination clauses (which are often so in favour of the agency its not funny), Damages (where are our clauses to claim damages if the agency doesn't pay / changes the terms / terminates early / etc.


I also think the 'back2back' argument is a weak one. Typically when things go wrong, commercially we have the 'right' to enforce the agency to uphold terms in the contract. And yet we see many agencies, when challenged on such issues (e.g. payment terms) to use the excuse its the client's fault and we should take it up with the client. But they are not technically our client !

[DodgyAgent]

Interesting argument. Its just a pity that agencies don't understand that a contract means exactly that - a contract - and yet we see countless agencies providing lop-sided contracts that basically give all the rights to the agency and none to the contractor. By this I mean things like - Defining the Scope of the Engagement (so if it changes it can be deemed a change in the contract terms), Termination clauses (which are often so in favour of the agency its not funny), Damages (where are our clauses to claim damages if the agency doesn't pay / changes the terms / terminates early / etc.


I also think the 'back2back' argument is a weak one. Typically when things go wrong, commercially we have the 'right' to enforce the agency to uphold terms in the contract. And yet we see many agencies, when challenged on such issues (e.g. payment terms) to use the excuse its the client's fault and we should take it up with the client. But they are not technically our client !

spoken like a permie not like a businessman. by the way do you expect your builder to be able to give notice halfway through a contract because he has got another better paid job elsewhere. Business is not about reciprocal rights it is about providing a service. Payment terms fine, it is right that agencies should be challenged. personally I wouldnt deal through any agency that I had'nt credit checked beforehand.

[monobrow]

Dont let my esteemed colleague hoodwink you into thinking it costs a lot of money to run a contract. The cost is 1.5% including factoring and assuming you have over 30 contractors out (if less you can do it yourself) that includes the "girlie in accounts".

As far as agency margins are concerned there are no rules moral or otherwise. They are set according to business agreements and can be changed. The only rules that apply are the laws of the land. If contractors have a morality issue with what an agent makes then maybe they should try looking at the morality issues of the companies paying their wages (betfair, The banks, M&S, BP etc)

For contractors to whine about agencies making "too much" then they are clearly not business people. The world is full of "twitchers" who spend their lives worrying about what everyone else is making. The contracting industry has more than its fair share of theses people which is why they have been so comprehensively muscled out by the business focussed Indian software companies.

^This - I can work with. A refreshing honesty - at last. thank you.

For the record I have a good friend who owns a mid sized agency, it's made him a multi millionaire, and I know exactly what it costs to run any contractor and its about £50 a week - everything on top is gravy. Granted there are overheads and I fully understand that, but the point here is... what is "fair"? (from a contractors point of view)

And don't tell me it's "business" so anything goes. There is no way anyone would pay £200 for a McDonalds nor 125% margin on a contractors day rate. But as most of the costs in our game are hidden (purposely) from both contractor and client (in my opinion to the agents gain) this breeds mistrust and the general apathy that contractors feel for agents.

[DodgyAgent]

^This - I can work with. A refreshing honesty - at last. thank you.

For the record I have a good friend who owns a mid sized agency, it's made him a multi millionaire, and I know exactly what it costs to run any contractor and its about £50 a week - everything on top is gravy. Granted there are overheads and I fully understand that, but the point here is... what is "fair"? (from a contractors point of view)

And don't tell me it's "business" so anything goes. There is no way anyone would pay £200 for a McDonalds nor 125% margin on a contractors day rate. But as most of the costs in our game are hidden (purposely) from both contractor and client (in my opinion to the agents gain) this breeds mistrust and the general apathy that contractors feel for agents.

If overcharging takes place then the market will sort it out. As for "apathy and mistrust" this will always be felt between permies and contractors and contractors and agents-so no point worrying about it.

[d000hg]

For the record I have a good friend who owns a mid sized agency, it's made him a multi millionaire, and I know exactly what it costs to run any contractor and its about £50 a week - everything on top is gravy. Granted there are overheads and I fully understand that, but the point here is... what is "fair"? (from a contractors point of view)

And don't tell me it's "business" so anything goes. There is no way anyone would pay £200 for a McDonalds nor 125% margin on a contractors day rate. But as most of the costs in our game are hidden (purposely) from both contractor and client (in my opinion to the agents gain) this breeds mistrust and the general apathy that contractors feel for agents.

You realise that to most people, what contractors earn as a day rate is probably more outrageous than an agent taking their 20%.

[javadude]

You realise that to most people, what contractors earn as a day rate is probably more outrageous than an agent taking their 20%.

Well said. I earn more in a day than a friend does in a week.

[Wanderer]

spoken like a permie not like a businessman. by the way do you expect your builder to be able to give notice halfway through a contract because he has got another better paid job elsewhere. Business is not about reciprocal rights it is about providing a service. Payment terms fine, it is right that agencies should be challenged. personally I wouldnt deal through any agency that I had'nt credit checked beforehand.

Do you get your builder in and pay him a day rate? No? Then it's the wrong analogy.

A better comparison would be a labourer working on an hourly or daily rate. If he gets a better offer then he's off.

As for credit checking, I've got agency failure insurance so I don't bother.

[DodgyAgent]

Do you get your builder in and pay him a day rate? No? Then it's the wrong analogy.

A better comparison would be a labourer working on an hourly or daily rate. If he gets a better offer then he's off.

As for credit checking, I've got agency failure insurance so I don't bother.

Smartarse

[The Agents View]

Do you get your builder in and pay him a day rate? No? Then it's the wrong analogy.

A better comparison would be a labourer working on an hourly or daily rate. If he gets a better offer then he's off.

As for credit checking, I've got agency failure insurance so I don't bother.

Is it not a pre-requisite to credit check every agency you work with for the insurance to be valid?? If not, congratulations, and good luck - I don't know of an insurance company in the world who would think that's an acceptable risk level!!

[filthy1980]

just to add my 2 pence worth in and without meaning to commit sacrilege . . . but i kinda agree with the agents in principle, they are going attempt to make the highest margin possible, whether that’s by screwing the contractor or the client company

its a free market (well sort of) as a self employed contractor you have to look after your own interests and get the best possible deal for yourself

just because an agent it making 25% of your daily rate, does not mean the client co would give you that 25% if the agent wasn't there, they are also a business and would screw you down as much as possible

if you negotiate the rate that you're happy to accept don't grumble too much because someone is making a bit for themselves too

fundamentality all three parties are suffering from the same problem . . . greed!