What Is A Normal Agency "Cut"?

[jmo21]

But snake oil salesman also needs to make sure he does not cut off his fangs to spite his tail.....if he puts forward lowest-rate candidates all the time, he may find that they are not of sufficient calibre for client and then lose out on filling the slots to another agent etc. Could even result in dropping from PSL if continuing theme.....

AND, he doesn't know who the bulltulipers are, rate is not always indicative of quality.

[malvolio]

Hi Gents,

I've recently started a new contract, and during the interview, the client mistakenly revealed the amount the agency would be getting per day... It was higher that I imagined, at 21.8%

Is that regarded as high, low, or in the middle?

Not a bad deal for the agency, as the project is expected to go on for about 2 years!

Just remember, the agency doesn't get a cut of anything; you do. The actual percentage is 18% or so, so you are getting 82% of the fees the agent has agreed with the client.

Otherwise, what everyone has said so far is right. You focus on your earnings, nobody else's. You want a rise, it's up to you to prove it's warranted, either by redistributing the agency margin or proving to the client you're worth more.

[BlasterBates]

There is no correlation between margins and rates.

If a client is cost concious he will drive both margins and rates down. If a client is looking for good people to get something done that makes them a fortune, money is no object and they 'll pay whatever it takes, under those circumstances the agencies that dig out the right people get their man regardless of cost.

My personal experience in banking was a high margin meant a high rate.

Low margin means tough client putting the boot in.

This idea of a "rate for the job" is very Trade Union way of thinking.

[Wanderer]

I've recently started a new contract, and during the interview, the client mistakenly revealed the amount the agency would be getting per day... It was higher that I imagined, at 21.8%

Is that regarded as high, low, or in the middle?

That's in the middle but after a few months you should try to negotiate this down to 10% or less. If you haven't signed the contract or started work then try and negotiate now. If they won't budge then tell them you are going to tell the client that they are robbing you with their huge margin.

Remember, it's YOUR money and THEY are taking a cut of it for doing very little so don't let them get away with it.

[malvolio]

Remember, it's YOUR money and THEY are taking a cut of it for doing very little so don't let them get away with it.

Wrong, but hey let's not let facts get in the way...

[evilagent]

That's in the middle but after a few months you should try to negotiate this down to 10% or less. If you haven't signed the contract or started work then try and negotiate now. If they won't budge then tell them you are going to tell the client that they are robbing you with their huge margin.

Remember, it's YOUR money and THEY are taking a cut of it for doing very little so don't let them get away with it.

I never fail to be amazed at the utter drivel that some contractors come out with.
(I am currently contracting!)

If you think that "giving the agent/pimp" a cut of your oh-so-valuable skills, you might want to consider the cut the clientco gets.

Consider, for a moment, the clientco paying you a £1000 a day for some software.
Contract last 100 days, you pocket £100K. And walk away.
Agent/pimp get nothing. Hurray!!

Now, the clientco uses that software, that cost them £100K, and the savings to the company by using the software are £300K, per year, EVERY year that goes by.

You got a piddling £100K for something worth £300K to the company. Every fricking year.

So, whilst you pontificate on the talent you consider yourself to be, the extraction of value of a mere 20-30% by agent/pimp pales into insignificance to the value extracted by clientco.
Agents can only get margin as long as you work at clientco; clientco benefits year after year after year after year.

You target the agent as its an easy shot.

Moaning over a poxy 20%, when the true discount of your "value" could be several hundred percents.

[kingcook]

I never fail to be amazed at the utter drivel that some contractors come out with.
(I am currently contracting!)

If you think that "giving the agent/pimp" a cut of your oh-so-valuable skills, you might want to consider the cut the clientco gets.

Consider, for a moment, the clientco paying you a £1000 a day for some software.
Contract last 100 days, you pocket £100K. And walk away.
Agent/pimp get nothing. Hurray!!

Now, the clientco uses that software, that cost them £100K, and the savings to the company by using the software are £300K, per year, EVERY year that goes by.

You got a piddling £100K for something worth £300K to the company. Every fricking year.

So, whilst you pontificate on the talent you consider yourself to be, the extraction of value of a mere 20-30% by agent/pimp pales into insignificance to the value extracted by clientco.
Agents can only get margin as long as you work at clientco; clientco benefits year after year after year after year.

You target the agent as its an easy shot.

Moaning over a poxy 20%, when the true discount of your "value" could be several hundred percents.

So, the contractor stops receiving money after his bit of work is complete, i.e. they get paid their £100K and then the client saves every year (as it should be).

An agency's business model is to carry on being paid once they have done their piece of work, i.e. they have got their CV keyword searcher to find a few CV's, then make a few phone calls for interviews, then carry on being paid every single day that a contractor is working while they sit on their asses believing they're the mutt's nuts providing some sort of value to the situation.

A much better idea would be for the agent to charge a one-off fee for introducing a contractor to a client. Do you think that could work?

[MyUserName]

Remember, it's YOUR money and THEY are taking a cut of it for doing very little so don't let them get away with it.

Personally, I would advise you not to remember that.

[kal]

I never fail to be amazed at the utter drivel that some contractors come out with.
(I am currently contracting!)

If you think that "giving the agent/pimp" a cut of your oh-so-valuable skills, you might want to consider the cut the clientco gets.

Consider, for a moment, the clientco paying you a £1000 a day for some software.
Contract last 100 days, you pocket £100K. And walk away.
Agent/pimp get nothing. Hurray!!

Now, the clientco uses that software, that cost them £100K, and the savings to the company by using the software are £300K, per year, EVERY year that goes by.

You got a piddling £100K for something worth £300K to the company. Every fricking year.

So, whilst you pontificate on the talent you consider yourself to be, the extraction of value of a mere 20-30% by agent/pimp pales into insignificance to the value extracted by clientco.
Agents can only get margin as long as you work at clientco; clientco benefits year after year after year after year.

You target the agent as its an easy shot.

Moaning over a poxy 20%, when the true discount of your "value" could be several hundred percents.

You're right in fact why does the agent even bother to get a third party in to fulfill the contract, why not just do the work yourself and keep 100% of what the client is paying...oh hang on they cant = they need us more than we need them. For my current role the pimp rejected me outright and refused to send my CV on to the client = I applied direct and am now on my 4th extension, well done

[evilagent]

A much better idea would be for the agent to charge a one-off fee for introducing a contractor to a client. Do you think that could work?

That is an entirely viable method.
What you need to assess is what that fee should be.

But, the clientco will have to pay the same fee whether it's a 3-month contract or a 12-month contract, right?
After all, the work to find a contractor remains the same, right. I mean, you don't do 4 times as much work to find a contractor for a 12-monther than a 3-monther.

Who pays, the clientco, or the contractor?