Agency Taking Large Percentage of Daily Rate

[Wanderer]

What does it say in the contract? If it doesn't say what might happen, then it's all mouth and no teeth. If it says that the contract can be terminated, that does tend to bite the agent as well as the contractor, so it may not happen.

Yep, standard agency bluff and bluster. Just ignore it.

[lukemg]

It DOES matter for a few reasons.
1 - The worst of all is if the agent has bounced you down at the last minute claiming client is lowering rate, nothing I can do etc. This is headbuttable.
2 - Client will expect different performance and skills at diff price levels so if they are coughing 600 up they expect a lot more than 300. You might be looking expensive and wondering why they expect all sorts.
3 - It's more than possible that if you are on a higher rate than others doing same job, you are first chopped if the squeeze is on, even tho you are all netting similar.
4 - Put simply, either they get the cash or you get it, I know which I prefer.
Most of mine are with big co's that have fixed pref supplier cuts so not a concern but also less opportunity to push for more at renewals ! knowledge is power so use it to your advantage but try not to annoy the whole chain during the process....

[BlasterBates]

Well having been a permie "consultant" where the consultancy takes a huge cut not a problem. I never felt under extra pressure, just did the job.

Internal staff are often charged out to departments at higher rates than the contractors, and sometimes paid peanuts.

I have to say I used to believe this about expectations and rates but my experience is once a contractor has his position the PM doesn't give a monkeys about the rate, they just try and get the best out of you. I've never felt under less pressure than higher paid contractors. In the end a dead line is a dead line and no-one differentiates contractor workload between "easy" and "hard" there ae just jobs that need to be done, estimation is done quite independently from whoever is selected to do the work. The main criteria is "are you busy" or perhaps a skill they've seen on your CV.

I could imagine if someone owned their own company they might care about different rates, but a PM isn't a profit centre, he usually has a "head count" that's it.

I personally prefer agencies with higher margins because they do a lot better job at negotiating my rate and conditions. Low margin arrangements in my experience do not benefit the contractors they benefit the client. When the client co forced contractors through a preferred supplier at my last place we were very quickly subjected to 10% cuts.

Agents on high margins are very active they poach people move them around jacking up contractor rates. I believe that happened in the oil and gas industry so the clients conspired carved up the market and drove contractor rates down.

The point is agencies are more powerful than indivdual contractors so they are better at jacking up contractor rates in a bouyant market than indivdual contractors are through immasculated preferred suppliers.

In conclusion don't worry about the agencies margin it's not your problem it's the client's and on the whole it's the client who will be forking out extra.