Negotiation

[Churchill]

During our negotiation stage the agent had the gall to suggest that I could increase my rate by £1 an hour for every one of his contractors that I place here.

I told him that as I was responsible for recruitment that it would be unethical to accept.

I feel that as I have secured the extension and the agent merely needs to factor my invoices for the forseeable that £320 per week should be sufficient remuneration for their services.

[interested]

OK, I never thought I'd see the day but...

Advice wanted.

My current contract ends on 26/05/06.

The client wants to extend.

I've told the agency that I want £45 per hour.

The agency have told the client that they want £55 per hour.

The client has told the agency and myself that they will pay £50 per hour.

The agency has told me that they can only pay me £40 per hour.

I've told the agency that I will drop my expectation to £42.

The agency have told me "No dice, £41 and I'm cutting me own froat G'vnor!"

I've told the agency that they'd better tell the client to make alternative arrangements.

Did I do the "right" thing?

Feel free to respond helpfully or otherwise. Failing that use this as an opportunity to abuse Chico/Franko, whoever...

Pay £40, charge £50 is 20% margin
Pay £41, charge £50 is 18%
Pay £42, charge £50 is 16%

Depending on how long you've been there, 16% is a pretty decent margin for the agency to make given that all they have to do is to pay your invoices.

I'm not sure you've done the right thing in giving the agency this message so soon. I would definitely get the client on board asap and tell them you're happy and want to extend, but drag the negotiations out with the agency right up to the end of your current contract; this then puts the pressure on the agency because they can't bluff you into thinking the client might replace you if you don't move on the rate they (the agency) want because you've hopefully got the client on your side. Ask the client to help you out - they'll be fed up with the agency, all they've got to do is tell the agency there's no chance of them being used to get your replacement if they don't drop their margin by a couple of % to accomodate your rise.

[Churchill]

The client are on board. They expressed concern a few months ago that we were being charged out at £45 originally but only receiving £33.

In fact, when I originally took this project, the agent told me that he "couldn't get me £38 but had managed to negotiate £33 per hour."

Anybody want to know who this agency and agent is?

[kramer]

The client are on board. They expressed concern a few months ago that we were being charged out at £45 originally but only receiving £33.

In fact, when I originally took this project, the agent told me that he "couldn't get me £38 but had managed to negotiate £33 per hour."

Anybody want to know who this agency and agent is?

it has to be S3 ... no doubt in my mind..

[IT contract agent]

The problem is that I quite like working here at my current client! I can't continue working here because the agency is tied into the equation.

...and the small fact that you want more money - you want 45 and the client isn't paying enough for you to get 45......

[BlasterBates]

If you're not happy with the rate you're right to look around, the only thing I would say is keep it amicable, as £42 is better than £0 and until there's a signed contract from elsewhere £0 is exactly what you'd be on, and if you're on the bench for a month and then you get £45, you won't be any better off after a year than if you'd taken the 40 whatever, cos you lost a month's earnings. Stll the market is pretty good at the moment so it might work out for you.

[hyperD]

...and the small fact that you want more money - you want 45 and the client isn't paying enough for you to get 45......

Not as I see it: the original setup was contractor getting £33 from agency, client paying agency £45. Now contractor wants £45, agency potentially getting £50 as client has fixed the price.

Seems fair to me if it's simply factoring - down to B2B negotiations - I think Churchill now has the advantage if he's been doing a good job: the agency has been rewarded for the placement, any future extensions is down to the contractor and the margin should give the agency a good profit if he's covering the factoring costs + agency operations.

[Churchill]

...and the small fact that you want more money - you want 45 and the client isn't paying enough for you to get 45......

Which is why I lowered my expected rate to £42. It is this that the agency was objecting to.

OK, just to let you chaps know that the agency has agreed to taking the 16% margin and I will now be receiving what I requested.

It was an S3 agency BTW.

[Alf W]

The client has told the agency and myself that they will pay £50 per hour.

The agency has told me that they can only pay me £40 per hour.

That's a 25% commission for the Agent (commissions are added on, not subtracted) which is excessive, especially for repeat business.

Ultimately if you go along with the renewal but at the last minute refurse to sign because the Agent is trying to 'rip you off' it's the Agent who will look a c**t. You're on-site with the Client after all so you should win the mud-slinging event.

[Churchill]

That's a 25% commission for the Agent (commissions are added on, not subtracted) which is excessive, especially for repeat business.

Ultimately if you go along with the renewal but at the last minute refurse to sign because the Agent is trying to 'rip you off' it's the Agent who will look a c**t. You're on-site with the Client after all so you should win the mud-slinging event.

As it turned out there was no need for mud-slinging, I telephoned the agent to let him know that I was about to discuss my renewal with the client and was he (the agent) willing to give me £42 or not. The main point was I wanted a "yes" or "no" there and then. The agent said yes.

Thanks everyone for helping me get things sorted as I really thought I'd dug a hole for myself.