Do agents always tell you they're on a fixed percentage?

[Cenobite]

Whenever I ask an agent what their deal is with the client, they always tell me they're on a fixed percentage. I've never had an agent turn round and say our profit comes from the difference between what the client's paying and what they're paying me but I'm sure this is quite common.

In fact I even had an agent who was on a fixed percentage, but it was double the percentage agreed with the client so a mixture of both there! Luckily when this was exposed, I was able to contract direct and increase my rate and actually get paid on time.

I wonder which clients prefer. On a fixed percentage the agent which will push for more money which will be good for the contractor and agent but bad for the client. Without a fixed percentage, the contractor could potentially get less which might mean they might be of a lower standard or reduce their effort which means the client suffers. This is much like Dilbert's Equilibrium Principle where Dilbert adjusts the quality of this output according to how well he's paid.

[SueEllen]

Nope. Agents try not to tell you anything if they can.

The agents who I dealt with who were on a fixed percentage I only found out through the client. Agents also know how much their clients will bear so if you ask for too much they will push you back. This is because there is more money for them putting 50 contractors on site on average market rates for that location than just 2 on a higher rate.

[northernladuk]

Have been with both. In no case did anyone give me an outright lie. The fixed percentage guys were actually very up front about their cut and it was very small.

Someone did suggest to me the other week if you ask an agent how they take their cut there is some legal situation they have to tell you the truth about some level of detail. It was also suggested if you ask directly they are obliged to reveal the percentage. I am not so sure I believe the revealing the percentage line but it would seem to make sense that there should be something that allows a certain level of transparency in the chain so not unbelievable.

Anyone heard of anything like this?

[Wanderer]

Someone did suggest to me the other week if you ask an agent how they take their cut there is some legal situation they have to tell you the truth about some level of detail. It was also suggested if you ask directly they are obliged to reveal the percentage. I am not so sure I believe the revealing the percentage line but it would seem to make sense that there should be something that allows a certain level of transparency in the chain so not unbelievable.

I don't see that they are legally obliged to reveal their margin any more than your local supermarket or car dealer has to reveal their margin.

However, if the client make it a term of business that they operate a fixed margin then they are contractually obliged to pass this on to the contractor. That doesn't mean that they won't try it on if they think they can get away with it though. With fixed margin deals, the client is often open about how much they are paying the agency and how much they expect the contractor to be on.

[BlasterBates]

Don't forget the client in this equation.

I seem to remember a situation described in the oil and gas where because there were very few big companies hiring contractors they clamped down on the agencies.

Before the clamp down agencies were extremely active and "poached" contractors and the result was competition pushed the rates of contractors up. After the clamp down (big oil companies colluding), agencies became pet poodles of the clients on fixed margin, contractors ended up stuck at the same client on lower rates and no chance of moving on.

JUst because agencies are taking percentage margins and making a pretty profit isn't necessarily a bad thing for the contractor.

[Boney M]

Not interested what they get personally, as long as I get what I want and what i am worth

[Wanderer]

Not interested what they get personally, as long as I get what I want and what i am worth

And if the client is willing to pay more than you are worth, you are happy for a middle man to pocket that even though they add no extra value?

[northernladuk]

And if the client is willing to pay more than you are worth, you are happy for a middle man to pocket that even though they add no extra value?

WWS. Picking a rate and blindly sticking to it is a bit daft really. At the end of the day it is how much you are worth to the client. You will be worth more to say and IB with an urgent project than a charity etc.

[kevpuk]

WWS. Picking a rate and blindly sticking to it is a bit daft really. At the end of the day it is how much you are worth to the client. You will be worth more to say and IB with an urgent project than a charity etc.

This, really ^^

I have a 'target' rate that I usually aim for, but have taken variation (read: less!) on occasion if the contract 'fits' on other criteria - e.g. locale, duration, client etc.
It would be silly, IMHO, to flatly refuse to budge on a nominal rate, just because......that said, my variations have not been that great!