Agency commission

[DaveB]

Excuse the 'obvious' question from a first timer...

A position is advertised at say £40/hour.

Is that what I get paid from the agency i.e. they add commission on top of this and charge the client £50 or whatever... or
Do the agency take their commission out of the £40 so I get less.

Or does it depend on the agency/contract?

One agency said they were 'transparent on their rates which were between 18% and 21%'. This means nothing to me but obviously it should.

Can anyone enlighten me please

The advertised rate ( X ) is the rate you will get, subject to haggling. If you run your own ltd you will invoice the agency for X + VAT.

The agency will add their margin ( Y% ) to this amount. They will then invoice the client for ( X * Y ) + VAT.

If you are happy with the rate you are getting then dont worry too much about what the agency is getting. If it turns out the agency are getting a very large margin then there may be issues with the client expecting a certain amount of value from you based on what they are paying and you delivering something less based on what you are getting.

[Moose423956]

Very good! I think we may have someone here who 'gets' the video.

Do I?

[Churchill]

threaded, what is your avatar? Is it a load of sumo wrestlers bending down?

It's his elevenses. Then he has his twelveses and his oneses, all that cycling and shagging of diplomats wives really takes it out of him.

[arthur_cider]

alpacafeet

The agent would have a fixed rate offered by their client, the agent then skims-off their ‘wack’, therefore the rate offered to you is the rate that you get

You may then 'haggle' with the agent way before your CV goes over to the client remembering that (s)he is also 'haggling' with other contractors

Forget what the agent makes out of the contract, its what your happy with, the agent is there to make money too so a contractor(s) CV(s), with a lower rate, will be put forward

In my early days of contracting (20 years now) I lost a long term role with GSK at Brentford for a miserable fiver, sitting at home counting my loss, since then I’ve let the agent tell me what the rate is, if its ridiculously low then I voice my opinion and if they stick at that rate then the jobs not for me

Good luck with contracting

[TheFaQQer]

Excuse the 'obvious' question from a first timer...

A position is advertised at say £40/hour.

Is that what I get paid from the agency i.e. they add commission on top of this and charge the client £50 or whatever... or
Do the agency take their commission out of the £40 so I get less.

Or does it depend on the agency/contract?

One agency said they were 'transparent on their rates which were between 18% and 21%'. This means nothing to me but obviously it should.

Can anyone enlighten me please

There are two ways that an agency can work. Either they work on a percentage commission, or they work on a fixed budget. This sounds like to former - you get £40+VAT and they bill the client £40+commission+VAT. Therefore, it is in their interest to get you the biggest rate that they can. This is typically the model used for preferred supplier lists.

If they are working on a fixed budget, then they are given (e.g.) £100 an hour + VAT to find someone. If they can find someone at £10+VAT an hour, then they keep the rest and do very well. If they have to find someone at £90+VAT then they don't. In this scenario, it is in their interest to find the lowest paid contractor so that they make the most money.

[hugebrain]

If they are working on a fixed budget, then they are given (e.g.) £100 an hour + VAT to find someone. If they can find someone at £10+VAT an hour, then they keep the rest and do very well. If they have to find someone at £90+VAT then they don't. In this scenario, it is in their interest to find the lowest paid contractor so that they make the most money.

So 20 grand a year for making four phone calls and doing some simple paperwork is not doing very well? No wonder people like you get ripped off so much! If they do that once a week, it's a million squid a year.

[TheFaQQer]

So 20 grand a year for making four phone calls and doing some simple paperwork is not doing very well? No wonder people like you get ripped off so much! If they do that once a week, it's a million squid a year.

I don't think I said that working on a percentage basis was not doing well. Maybe it's in the tiny invisible writing, but I've just re-read it, and I can't see it there.

I'm sure that you're right though, whatever your point is.

[TheFaQQer]

I don't think I said that working on a percentage basis was not doing well. Maybe it's in the tiny invisible writing, but I've just re-read it, and I can't see it there.

I'm sure that you're right though, whatever your point is.

Nope - just read it again, and it doesn't say that a percentage basis isn't doing well.

[NotAllThere]

In order to get one client for you, they may well have to make over 200 calls. And to get the candidates for the client, they may have to make a fair few calls as well. Maybe 0.5% of the calls make actually produce a result. Having said that, they're still all lazy, greedy, stupid, untrustworthy scum.

[TheFaQQer]

Having said that, they're still all lazy, greedy, stupid, untrustworthy scum.

Apart from DA, who we love.

And is obviously still recovering in a Paris gutter somewhere.