Best agency margin if the agency has been gifted the role and the candidate?

[HeadOfTesting]

No doubt my inability to find anything about this despite searching through lots of threads reflects badly on me but here goes....

I'm looking for anecdotes from either clients or candidates (preferably naming agencies and individual recruitment consultants - PM me if you prefer) showing how low people have been able to negotiate an agent's margin in circumstances where the agent is only providing the payroll function. I would imagine many anecdotes will come from contractors that have tried to go direct only to be told they must bill through a PSL agency albeit on a reduced margin.

Any takers?

I know of one investment firm in the city that claims to pay £10pd to payroll contractors that they've found themselves. This seems incredible to me and is no doubt only possible because the agent gets enough proper business from the account to make it tolerable to them.

Thanks in advance for any replies.

HeadOfTesting

[craig1]

No doubt my inability to find anything about this despite searching through lots of threads reflects badly on me but here goes....

I'm looking for anecdotes from either clients or candidates (preferably naming agencies and individual recruitment consultants - PM me if you prefer) showing how low people have been able to negotiate an agent's margin in circumstances where the agent is only providing the payroll function. I would imagine many anecdotes will come from contractors that have tried to go direct only to be told they must bill through a PSL agency albeit on a reduced margin.

Any takers?

I know of one investment firm in the city that claims to pay £10pd to payroll contractors that they've found themselves. This seems incredible to me and is no doubt only possible because the agent gets enough proper business from the account to make it tolerable to them.

Thanks in advance for any replies.

HeadOfTesting

Here's what I'd expect an agency to go down to if pushed hard:

Money-in, money-out payment: 3-5%
Monthly invoicing with 7 days payment terms: 5-10%
Weekly invoicing with 7 days payment terms: 10% ish

And that's with a 100% reliable client that isn't going to stop paying invoices. The agency is taking on a risk paying you before they receive any money from the client and that's reflected in the rates I mention above.

[Wanderer]

My current agency is on a PSL and they keep about ~7% of the rate.

[Pondlife]

Here's what I'd expect an agency to go down to if pushed hard:

Money-in, money-out payment: 3-5%
Monthly invoicing with 7 days payment terms: 5-10%
Weekly invoicing with 7 days payment terms: 10% ish

And that's with a 100% reliable client that isn't going to stop paying invoices. The agency is taking on a risk paying you before they receive any money from the client and that's reflected in the rates I mention above.

I'd say that's about right IMHO.

Mine takes about 7.5% on 7 days payment terms, invoiced monthly. (one condition is that I must invoice each month otherwise I screw their cashflow )

They did get me the original gig but for various reasons I now hold all the cards.

[Moscow Mule]

0%.

But then, client co are very good customers of said agency.

[Pondlife]

0%.

But then, client co are very good customers of said agency.

Good work indeed.

[The Agents View]

No doubt my inability to find anything about this despite searching through lots of threads reflects badly on me but here goes....

I'm looking for anecdotes from either clients or candidates (preferably naming agencies and individual recruitment consultants - PM me if you prefer) showing how low people have been able to negotiate an agent's margin in circumstances where the agent is only providing the payroll function. I would imagine many anecdotes will come from contractors that have tried to go direct only to be told they must bill through a PSL agency albeit on a reduced margin.

Any takers?

I know of one investment firm in the city that claims to pay £10pd to payroll contractors that they've found themselves. This seems incredible to me and is no doubt only possible because the agent gets enough proper business from the account to make it tolerable to them.

Thanks in advance for any replies.

HeadOfTesting

If it's any help, assuming credit check is all clear for client, I can do this for 6% for you.

PM me if you want more details etc.

TAV

[TestMangler]

0%.

But then, client co are very good customers of said agency.

Bloody hell man, get negotiating. At least 2.5% lower than that should be possible

My current gig has agency on 5.25% but it's a 'payroll only' thing, meaning that the agency didn't source the bodies and the contract is direct between myco ltd and clientco.

[HeadOfTesting]

Thanks for the replies – I should probably have given more context.

The situation is that I'm undertaking due diligence for a plan b which is a testing services company (perm & con staffing, consultancy, training etc).

So in this case I'm the client (although not the end client).

I've made contact with an invoice factoring agent (Touch Financial) and they seem very on the ball but the percentages being quoted (which to be fair are very preliminary with an action on me to provide more detailed revenue projections etc) make the factoring of contractor invoices very marginal - unless I'm missing a trick. The preliminary advice was that Lloyds might be an appropriate option.

I've got several hundred thousand in reserve so getting started isn't a problem (subject to me running a credit check on my own company) but the issue is scaling the business going forward - my reserves won't go far at all on, say, 90 day terms so I need some sort of factoring facility for the contract staffing element of the business.

This led me to wonder whether it might be possible to go to one of the big boys like Spring or Reed to payroll contractors/roles that I've found on a commoditised pricing model. I have previously done this with Reed as a hiring manager - I think it was about 3% although I accept it was part of a big account for them.

I appreciate this may not be feasible since it appears reliant on at least the following:

- Being satisfied that the payroll provider won't nick the clients (or having my company accepted as a credit worthy client which is unlikely as this facility could quickly run in to millions and surely no payroll provider would tolerate being blind to the identity of the end clients).

- Having payment terms with the payroll provider that are at least as long as those that I have with the end client or that enable me to settle with the payroll provider out of the 80% (or whatever) that I would be advanced by a factor in respect of my company’s outgoing invoices.

Anyone been in a similar situation before or got any suggestions?

Thanks again,
HoT

[The Agents View]

Bloody hell man, get negotiating. At least 2.5% lower than that should be possible

My current gig has agency on 5.25% but it's a 'payroll only' thing, meaning that the agency didn't source the bodies and the contract is direct between myco ltd and clientco.

So...errr....what are they payrolling??