My life as a contractor- Day 2

[Pondlife]

How does the conversation with clients about rates work exactly?

So, an agent calls me and says, for example, I have a role paying between £400-500. I then say, for example "I am looking for £500". Does the agent then send the CVs across, explaining contractor A wants £450 and contractor B wants £500? Or does the agreed rate discussion not happen until AFTER they decide who they want?

You don't have the discussion about rates with the client, you have them with the agent. In your example above the agent has said to the client they will find someone for £550 and is therefore looking to get someone for <£500 to cover their margin. If they can get someone for £450 then that's an extra £50 a day in their pocket as it were.

£550 is the prize that is ultimately up for grabs. How much of that you get is down to how good your hand is and your negotiating skills.

[kempc23]

You don't have the discussion about rates with the client, you have them with the agent. In your example above the agent has said to the client they will find someone for £550 and is therefore looking to get someone for <£500 to cover their margin. If they can get someone for £450 then that's an extra £50 a day in their pocket as it were.

£550 is the prize that is ultimately up for grabs. How much of that you get is down to how good your hand is and your negotiating skills.

I understand that, but what im really trying to understand is, is the rate the client pays to the agency agreed first, or is that in a range too? so lets say the role is advertised at £400-500, do the client pay £500-600 (for example), or do they agree £600 say, regardless of what the contractor is getting paid?

And lets say the agent gets 10 suitable CVs they want to forward for a role paying £400-450, but 9 of them would work for £400, but I say I want £450. Does this mean my CV wont get put forward at all?

As mentioned above, its hard for me to balance saying that I will work for a lower rate as its my first contract, with the fact I dont want agents to take the p!ss.

[Pondlife]

There maybe some negotiation between the agency and the client but you won't be party to it because as far as the agent is concerned, it's not really any of your business.

As for you wanting more than other potentials. If your CV is strong enough then it'll get put forward. If the client really likes you (head and shoulders above the others) then 1) the agency will say "sorry, client will only pay £400..." 2) they'll have to reduce their margin or 3) they'll have to get more off the client. Whether it's 1, 2 or 3 is all about negotiation again.

[SueEllen]

As mentioned above, its hard for me to balance saying that I will work for a lower rate as its my first contract, with the fact I dont want agents to take the p!ss.

The agency probably won't put anything in writing so it will be verbal on the phone.

The most important things for you to do are:
1. Get in front of the client.
2. Make sure the client likes you.
3. Get the clients details.

Then if the client wants you negotiate with the agency for the rate you want. If the agency seems to block you get in touch with the client and say how much you would like to work for them blah blah then see what happens.

[kempc23]

Ill put my question another way....

If I say I will work for £400, when the range is £400-500, does this make me more attractive to the client, or do the agency just keep the margin?

Thanks all for advice so far.

[Pondlife]

Ill put my question another way....

If I say I will work for £400, when the range is £400-500, does this make me more attractive to the client, or do the agency just keep the margin?

Thanks all for advice so far.

It means the agent will be eyeballing a new tub of brylcreem and an extra 30 mins at the self tanning centre.

The Client will never know. It's worth repeating as you seem to be asking the same question each time. If you offer to work at the lower end of the advertised range, you are lining the agents pocket. This is their job... to maximise the amount they make on each placement. Every extra £1 you get, they lose.

[SimonMac]

The way I see it is there is always some room for negotiation, although the amount of wiggle room varies, until you have the contract offer in writing that is the time to do the final negotiations imo, up until then I usually say in the region of £xxx, but it would depend on location and details of what the client is expecting which I wont really know until I have had a chance to sit down with them.

[jmo21]

Welcome to contracting!

This is one of the downsides of contracting, dealing with agents who are trying to get more money out of a role.

They have the upperhand when there are loads of decent people applying for a role they advertise.

You only really have a "good hand" when you actually have got in for the interview, and the client wants you.

You gain real advantage when you are by far and away the best candidate they have seen, but it's difficult for you to know that, unless the client has mentioned it to you in the interview.

[Wanderer]

Ill put my question another way....

If I say I will work for £400, when the range is £400-500, does this make me more attractive to the client, or do the agency just keep the margin?

The agency aren't going to price themselves out of the job if they can avoid it. You have to decide what the market rate is for your skills and how much you want the job.

As for what the agency takes, will the rate cut you accept be passed on to the client? There are a number of scenarios, worst to best case:

1. Client offers £500/day, agency offers contractor £300. Contractor reluctantly accepts. Client doesn't know why his £500/day contractor can't be bothered working too hard and is always looking to jump ship mid contract. Everyone gets pissed off if they find out what they agency has done but the agency tries their best to keep it a secret.


2. Client offers £500/day, agency offers contractor £300. Contractor refuses. Agent goes to "consult with the finance director (eg, makes a cup of tea and smokes a fag). Comes back with a final offer of £350 which the contractor accepts. Client doesn't realise that the agency is taking a massive margin for doing bugger all and both the client and contractor are getting ripped off.

3. Client offers £500 to the agency who agrees to take £50 and offer the contractor £450. Agency actually offers the contractor £400 and quietly pockets the rest.

4. Client and contractor negotiate directly and settle on a rate of £450/day. Client employs a lot of contractors so their agency is on the preferred suppliers list and takes a fixed margin. They speak to the agency and tell them what the contractor is getting and the client and agency agree the agency's markup between them.

In scenarios 1,2 and 3 it's in the client and contractor's best interests to know what the agency is taking because you can avoid misunderstandings and unpleasantness. Unfortunately some clients and contractors are intimidated by agency bully boy tactics saying that they mustn't ever discuss this. I always try to tend towards scenario 4 or at least understand what the client is paying so that both the client and contractor get a fair deal.

Don't listen to anyone who tells you that you should never discuss your rate directly with the client. You DO need to be careful about it though, some clients are open about it, some will discuss it if you ask, others are reluctant and a few will get very stroppy and refuse point blank.

Good luck!

[nomadd]

Don't listen to anyone who tells you that you should never discuss your rate directly with the client.

This^