My life as a contractor- Day 2

[2BIT]

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.

point here is its your first contract, don't worry too much about them taking the piss- get six months worth of work and find something else or renegotiate just get that first contract! start building the war chest and you'll be in a much stronger position to deal yourself out before you start

[shoes]

Typically the agency has put forward a rate to the client before they even advertise the role. At that point they are mindful of what competing agencies might be putting forward to the same client for the work. They then advertise the role and if they specify a rate at all to the contractor it is the price put to the client less their cut.

At this point the rate you will work for is a deciding factor in whether the agency puts you forward to the client. This is where you potentially gain from working for less than other contractors after the role. Your rate discussion with the agent will never reach the client, that's already agreed. They will tell you they are discussing you in particular and your specific rate with the client but they are not, this is just how they get you for as little as possible.

The benefit for you of putting yourself forward at a low price is a greater likelihood of being put forward for the role. The client pays the same whatever.

[kempc23]

Great, thanks.

Thats exactly the answer I was looking for. And explains a few things!

[The Agents View]

Typically the agency has put forward a rate to the client before they even advertise the role. At that point they are mindful of what competing agencies might be putting forward to the same client for the work. They then advertise the role and if they specify a rate at all to the contractor it is the price put to the client less their cut.

At this point the rate you will work for is a deciding factor in whether the agency puts you forward to the client. This is where you potentially gain from working for less than other contractors after the role. Your rate discussion with the agent will never reach the client, that's already agreed. They will tell you they are discussing you in particular and your specific rate with the client but they are not, this is just how they get you for as little as possible.

The benefit for you of putting yourself forward at a low price is a greater likelihood of being put forward for the role. The client pays the same whatever.

^^ This is utter fantasy.

Each candidate is considered on the basis of whether they could secure, and complete the role to a high standard. Rate ranges are typically discussed, and so are top end budgets. If I can get someone in for less than my competition (ie charge the client less) then I will, because the chances of winning the work go up. This fantasy that we "get the charge rate and then pay the contractor as little as possible" is a fantasy dreamt up by people who don't have the quality to command a professional day rate, to explain their bench time - 30% margin of Zero, is still Zero.....

[shoes]

^^ This is utter fantasy.

Each candidate is considered on the basis of whether they could secure, and complete the role to a high standard. Rate ranges are typically discussed, and so are top end budgets. If I can get someone in for less than my competition (ie charge the client less) then I will, because the chances of winning the work go up. This fantasy that we "get the charge rate and then pay the contractor as little as possible" is a fantasy dreamt up by people who don't have the quality to command a professional day rate, to explain their bench time - 30% margin of Zero, is still Zero.....

'command a professional day rate' is a meaningless term.

I've seen it from the hiring perspective and from the end contractor perspective, from my experience what I've described is what happens. If you operate differently you're in the minority.

[nomadd]

'command a professional day rate' is a meaningless term.

I've seen it from the hiring perspective and from the end contractor perspective, from my experience what I've described is what happens. If you operate differently you're in the minority.

From my own experience, I've found that most clients have a "rough" rate in mind before they contact an agency. At that point, the agencies will let them know whether the rate is realistic based on what the market can currently supply. Usually, the client has a view that lots of cheap people are just sitting around waiting to be picked up. Most agents will correct the client of this erroneous assumption; or kid themselves that they can fill the role when they can't (which just annoys the client when junk cv's and rubbish candidates get put forward.) Obviously for "muppet" roles, there will be lots of cheap muppets around. I can't comment on such roles as that isn't my market...

There is ultimately always a "range" over which a client will operate. For some, it's low and unrealistic; for others, it's correctly reflective of the variety of candidates they are prepared to accept. I always "pitch high" because I hate working for peanuts. For many agents, that's enough for them not to want to take it any further; that's usually not a problem, as multiple agencies work on every role these days, and you'll always find one ready to put the cv across. From then on, you just have to prove to the client that you are worth the extra; that's never been a problem in my case, and I'm sure this is true for most of the "seasoned pros" on here.

[Boo]

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?

Let me explain :

Agents never put contractors forward to the client with a rate attached. They ask you your rate not because they need to tell the client (there is no client, there is no job) but because they keep a list of contractors with particular skills vs the required rate and time on the bench. When you descend the list to become the contractor at the lowest rate (disambiguated by being the longest on the bench), and only then, will you be put forward for a role. If one should ever turn up.

Welcome to the world of contracting. I do hope you didn't leave your day job for this.

Boo

[amoeba]

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.

Is there any way of knowing if there is a fixed markup beforehand? I've just accepted a contract with an investment bank, and was told by another agent that it would be (so no point haggling).

[SueEllen]

Is there any way of knowing if there is a fixed markup beforehand? I've just accepted a contract with an investment bank, and was told by another agent that it would be (so no point haggling).

If you got your contract straight through an agency and there wasn't another contractor involved then "No".

If you didn't then the person hiring you, once you are hired may tell you the rate.

[The Agents View]

Is there any way of knowing if there is a fixed markup beforehand? I've just accepted a contract with an investment bank, and was told by another agent that it would be (so no point haggling).

Unfortunately for you - no there's not, other than asking the client (which would be a petty thing to do).

FYI, Agencies don't work on Mark Up, we work on MARGIN.

If you need an explanation, there will be several around, but the simplest one, is that you take a percentage of the total rate (80% of the total charge = 20% margin - 85% to you = 15% margin - and so on)