negotiating greater cut of agents % at renewal

**Wanderer** · 27 September 2012, 23:47

Originally posted by SeaBass View Post

My contract is being renewed, but have discovered the agent is taking a 30% cut. The client thought they were on 15%.

You just have to talk to them and negotiate.

If they won't budge then tell them that the game is up and you know exactly how much margin they are taking. Tell them you know the client is paying £450/day and you want £420/day. They may be making £100/day now but if you walk then they will make £0/day so they need to be realistic about this.

They will say that they will just get another contractor in to replace you. The answer to this is that you will put the word around to every other agency in town before your agent even knows you are leaving and secondly, the client isn't going to be inclined to do business with your agency again once they find out the agency has been screwing you both on the margin. Press the point home to them that the chances of your agency getting someone in to replace you are almost zero unless they sort their margin out.

If you didn't opt out then you could take an 8 week contract somewhere else and then come back to work for the client direct or through another agency who will take a bare minimum like 7% for factoring the payments. Even if you did opt out, it's probably not valid so perhaps an option anyway.

Decide now if you have the balls to do all this because it's going to get nasty. And remember, if you don't ask, you don't get. Don't go there asking for the £380 you want, ask for £420 (quite a reasonable margin in any case) and go for it. These guys do this stuff all the time and they have a skin as thick as a rhino's, when they start having to refer the deal to their finance director to approve, you know you are getting somewhere.

Good luck and don't let them shaft you any more than they already have.

**kingcook** · 28 September 2012, 07:55

Originally posted by Wanderer View Post

The answer to this is that you will put the word around to every other agency in town before your agent even knows you are leaving

WWS.

Except possibly the bit above. Be careful that you are not introducing someone else (either directly or indirectly) to replace you if your contract forbids this (whether for monetary gain or not).

**lukemg** · 28 September 2012, 08:58

WTAS - You are getting turned over. Agent has had a good run on getting extra cash but some of that could be yours without bothering the client. Forget the will speak to client line, they wont and will just tell you they said no.
Time to front him up, listen - you have been getting 30%, thats over the top and I want 400/day from this new contract (Dont make threats, just leave that on the table).
If you still get push back and are certain client really wants to keep you, tell the agent that the client is under the impression he is taking 15% and maybe its time you all sat down to discuss this.
You will upset him but WGAS give me the 'kin money.

**SeaBass** · 28 September 2012, 09:54

Ok, thanks guys. I'm a bit new to this game as you can probably tell! I'll tell you how I get on

**BlasterBates** · 28 September 2012, 12:09

I would steer clear of the John Wayne tactics that is less likely to work. The agency knows full well what the score is, just be firm about a rise at renewal. If you overdo it the agency might well say f*** off then, and then you have a problem because you have a handcuff clause.

**MyUserName** · 28 September 2012, 13:36

There is no need to get too confrontational about things. Speak to the agent and tell them that after examining the market place you feel that your skills are worth £400 per day.

They will laugh\be horrified etc and will have no idea where you got those numbers from - they will ask the client but they are unlikely to be happy about it. The will also mention how tough the market is right now and what a sweet deal you have.

They will come back to you (if you chase them) and explain that the client said a flat NO. Maybe they can wangle 5 or 10 pounds per day increase.

Offer to speak to the client on their behalf and let them know that you know they are on a 30% margin. Say something like:

If it is easier I can speak to them here? ISTR you are on a £30% commision on my day rate which is 350 which means they are paying 455 so I will speak to them about raising the day rate to 520 so you still get your %30.

Phrase it as if you honestly believe you are doing them a favour and give them a deadline of an hour or two to sort it (say that that is when the meeting has been timelined for).

They will stonewall you but keep saying that unless they come back with 400 you will speak to the client to 'help out' and get them their extra commision - again, talk like you are doing them a favour.

Either they will bottle it at the idea of you spilling the beans to the client or they will take their chances and hope it is all okay for them. I would guess the first.

**Wanderer** · 28 September 2012, 21:07

Originally posted by kingcook View Post

Be careful that you are not introducing someone else (either directly or indirectly) to replace you if your contract forbids this (whether for monetary gain or not).

Good point, of course we would never do such a thing quite so blatently! No way. Not deliberately anyway. But point out that you will be speaking to a large number of agents and as we all know they they will need two references, won't they! Play them at their own stupid games.

Originally posted by MyUserName View Post

Offer to speak to the client on their behalf and let them know that you know they are on a 30% margin.

Ha, that one will make them scream.

It's a good way to up the pressure on them.

The other thing I have found that works well is playing the waiting game with them. When they get you on the phone they try their best to make it a high pressure situation. Need an answer in the next 60 seconds or the deal's off etc. Don't take the bait, you can afford to accept at the 11th hour if you want. If the agency loses a contractor then they are dumped in the tulip trying to find a new one quickly.

Take your time, sleep on it. Tell them you will call back tomorrow. Stall as much as you can, it will make them sweat because at the end of it they want their money just as much as you do. In fact, they have done their hard work and now they are getting money for nothing so they will be desperate not to lose you. Keep your ear open to what the client is saying though, you need to keep them happy though out this. If necessary, tell them that you will extend but it's just a matter of the rate to be settled and they may go and give the agency a rocket.

**psychocandy** · 1 October 2012, 08:59

Originally posted by SeaBass View Post

Hi!

My contract is being renewed, but have discovered the agent is taking a 30% cut. The client thought they were on 15%.

I'm keen to make their percentage of the contract 15%.

Contract ends tomorrow. I've asked the agent for a rate increase. he gave me the usual spiel about market rates, that's the contract rate, the client has no extra money. I couldn't think of a brilliant counter argument, so just suggested he have a think about it and get back to me...

He's claiming he'll ask the client for more money (who will say no!), and who are aware that the agent is on a higher rate than they thought, but are happily remaining neutral for the time being.

Total day rate is £450. I'm getting £350 of that, but after £380.
Any hints on negotiation strategy that is better than my "give me a better rate or I'm not there on Monday"?

thanks

Out of interest - how did you find out the agents cut?

**SeaBass** · 2 October 2012, 19:53

Out of interest - how did you find out the agents cut?

I was tidying some of my files on the server, and saw some with my name on and thought "oh, don't remember leaving those there but I'll move them anyway". Turned out they were the purchase order things to the agent.

Anyway, bottled it a bit (my wife didn't want me calling the agents bluff). Well, I say a bit. A lot! I'm still on the same rate but taking the positive of that I'm slightly more experienced (though not necessarily better) at rate negotiations.

It didn't help that the end client are happy with the margin that they are paying. F*** knows why!

negotiating greater cut of agents % at renewal