Day Rate!

[Murder1]

I think that it's very easy to say charge what you are worth but how to you decide what that is?

Is there anywhere where you can see how much stuff (expertise, talent, knowledge) costs in order to work out what your worth is? A builder can give you a price per square metre but for us it's basically to do with your perception of your worth and what you understand the market is paying. Typically you can see this when people don't get the roles they go after and their warchest starts disappearing, their perception changes and they start considering less paying roles.

You might think that you are worth £400 say (based on what? it should be the highest rate you've ever had but that's not the most accurate figure there maybe higher paying roles you could have got but haven't) but there'd be no point contracting for less than £200, somebody offers you a role for £300 you shuffle along and take it.

Needless to say this suits the agents right down to the ground.

You can monitor market rates, other contracts doing the rounds as well as speaking to other contractors and what they are on for the skills/expertise etc. Just like anything else however you're only worth what someone is prepared to pay.

I just see this argument a lot from colleagues I've worked with in the past, who are all swagger and bravado when they tell you they negotiated a £50 a day rate increase only further down the line to find out the agent pocketed a £70 a day rate rise and the client had to pick up the entire increase. Be prepared to lower your rate to get the initial contract but then if you feel you are worth more and a renewal is in the pipeline try and discuss rates with both the agent and the client who may well be happy to lean on the agent to get you a better rate rather than risk losing you.

[evilagent]

If you discovered that another contractor working alongside you was getting £250 a day, would you feel aggrieved on his behalf and work to get him a better rate, or would you strut around in smugness at being on a better deal?

I favour the margin being a defined percentage of the day rate, thus introducing clarity, and thus agents can focus on finding new work.

[Scrag Meister]

Conversation with a friend. …

Agent pays £300 , found out gig pays agent £400.

Will you rant ? or chill

You signed the contract and were happy with the rate prior to knowing the full picture.

IMHO, wait til renewal and then try and negotiate with the agency to reduce their margin and increase your rate.

25% isn't unheard of, but is rather high.

Margin depends on a lot of things, size of client, agency relationship with client (PSL or not).

[PEEL]

Knowledge is power. You ought to be much more likely to have a successful negotiation at renewal stage if the agent is taking a 25% margin.

[rurffy]

Knowledge is power. You ought to be much more likely to have a successful negotiation at renewal stage if the agent is taking a 25% margin.

The question now is, what would be the ideal margin that doesn't seem like a rip off.

[PEEL]

The question now is, what would be the ideal margin that doesn't seem like a rip off.

The ideal margin from your point of view is the lowest possible amount you can negoiate at renewal without him telling you to do one.

The ideal margin from his point of view is the maximum he can get from you (ie. pay from client - pay to you) without you telling him to go and do one.

Equilibrium would put the answer somewhere in the middle.

If you would just about accept a margin of 25%, and he would just about accept a margin of 10%, then maybe the margin should be 17.5%?

[Eirikur]

Agree with others if you were happy with 300 per day why to rant about it. The good thing is now you know in case of an extension you can go up at least to 350

[northernladuk]

The ideal margin from your point of view is the lowest possible amount you can negoiate at renewal without him telling you to do one.

The ideal margin from his point of view is the maximum he can get from you (ie. pay from client - pay to you) without you telling him to go and do one.

Equilibrium would put the answer somewhere in the middle.

If you would just about accept a margin of 25%, and he would just about accept a margin of 10%, then maybe the margin should be 17.5%?

I think that is a far too simplistic approach. You have to look at the return for effort and the agent does not put in 17.5% of the day rate effort whatsoever so the margin is still grossly skewed in his favour. Bearing in mind fixed margins are around the 6% area it shows what is possible. Yes that is for quick and repeat business instead of having to do a lot of legwork with a client but still... a sanity check between 6% and 17.5% still shows there is a lot of squeezing that can be done.

[rurffy]

having done a little calculation - If an agent is taking up to 25% of £400. which is £300 for the contractor.

Example :
In a month (21 days) ,agent is making
£100 x 21days = £2,100

Free easy money just from one contractor . Imagine if they did same for 10 more contractors -That is £21,000/PCM

sweet! i think i want to own a recruitment agency

[BigRed]

If the agent is looking after you properly, providing feedback from the client, putting out feelers for extensions, taking them out for a business lunch, keeping you aware of other possibilities as you have a good relationship with them, then they might be worth 10-15%

If you know they won't bother contacting you for a similar role once the contract is finished despite having a glowing recommendation from the client and they have minimal understanding of your skills then they should only get a lump sum up front. The ones who try to get you to opt out, tell you there's an excellent chance of renewal when the client tells you otherwise, take your CV but don't forward it because you aren't on the bench/might get a renewal should suffer from DoS attacks from a group of contractors on a forum until they learn their lesson.