Paying the double agency wammy

[DodgyAgent]

Dodgy, you make me laugh.

26 years ago I was working on a contract in Holland for Hfl36.60 per hour, they were paying another contractor Hfl 37.50 an hour, the Client told me they were paying the same rate for both of us (but did not tell me the rate).

I went to the agent and said I wanted the same, the Agent said no way.

I told the Client I was walking, they said no way, and they would pay me direct the same as the Agent a wopping Hfl 102.50 per hour.

The Client kept me on for another six years, until I decided I wanted to do something else.

Especially these days if I am working on an IR35 caught contract I want to know EVERYTHING about margin and who is getting what.

Market rates are crap, and I personally would not work for a "market rate".

You may not like it, but the Contractor population are slowly getting wise to Dodgy Agent practices.

Keep feeding off and exploiting the young and naive.

I will refrain from using some more appropriate words.

NBo wonder you need agents, your ability to look at anything with any objectivity is pathetic. You are describing a situation that happned quite a bit in the past, and you are now whining about Alex Mann gaining sole supplier status, and subbing difficult jobs to other agencies creating two sets of margins.
What I said (which you completely failed to understand) is that many clients nowdays are using companies like Alex Man as an interim supplier who bridge the gap between hiring managers and agencies. Their job is to save line managers from having to communicate with agencies and at the same time select and manage a small group of prferred suppliers.

Because Alex mann understand (supposedly) the business of recruitment they are well versed in how to carry out this service. They implement and manage a suitable procurement/management system that functions as anything from a CV database to a payment system to a system that measures the performance of an agency to maybe even a blacklist of contractors.

Now the client may (with your permission of course) decide to pay them a percentage of each contract as their fee AS Well as a similar percentage to whatever agency is supplying.

That is Alex Mann ("solutions" as it is called) business that I believe you are complaining about. If you dont like it then apart from it not being any of your business how a client sets up its supplier relationships, it is the reality of how clients nowadays manage their suppliers.

If you are talking about two agents taking 30% margins each then maybe there is a cause for grievance. However if the client is happy about it and you are getting your market rate then I dont see what your problem is. If the margins are to be reduced it is most likely that the client (not you) willl get the discount rather than you the increase.

I sometimes wonder when I hear these "I insist" and "I demand" and the me me attitude of some of you whether you really understand the customer/client concept. It is no wonder so many companies have rushed headlong into putting as much of their work to India as they can

[ancient]

Dodgy, I am not complaining about anything, and the market works the way it does. There are genuine reasons for why the market works the way it does some of which you have explained (thank you).

All I am trying to do is understand the relationships and why they exist, and potential implications of working through agency a or agency b.

I know nothing about AM's margins, I would suspect they are quite low say 10%

Most of us want to know what the margins are, is that unreasonable?

I have worked for a few 'Agents' over the years, where the margins have been anything from 15 to 66 percent and this has only surfaced after the fact.

It is alot better relationship all round if there is an open book arrangement.

Many large customers mandate what the maximum margin is to the supplying agent, but it is possible that the first agent in the chain is not constrained by these rules.

There is nothing wrong with Contractors trying to shorten the value chain and increase their revenue stream.

[privateeye]

Most of us want to know what the margins are, is that unreasonable?

It's not IMHO unreasonable to want to know what the margins are, equally its not unreasonable for an agent to withhold that info as it may be commercially sensitive info. I would not like for an excessive amount of the money to be purely for commission either that is why in true business manner I am able to have a pretty good guess from ads on Jobserve etc see which agents are actually working on the same job and what rate each is paying - I would then of course go to whoever is offerring the most. If I know an agent generally charges high commission I will via interview try to get the client to offer me the contract - from then on the ball is in my court. The agent either lowers the commission or we both lose the job - I think they call it business.

Most clients know that if the agent is seen by the contractor to be charging too much commission then they will lose that contractor so there is a tendency for the larger clients to specify the max commission rate. We may currently just have to trust these clients but I do know from one interview the interviewer had on his desk a piece of paper stating what I would be paid with the remark next to it "+ commission" so I was comfortable for that job the commission rate capping was being enforced. That was for an NHS project.

At the end of the day we have to negotiate a rate that we are happy with and do some research into what the market rate is and what other agents are offerring for the same contract. That is the way we can currently get rid of those charging higher commission.

[Not So Wise]

Going to shock myself here and agree with DA. You should not care as long as you are getting what you want and if you are not getting what you want either renegociate or leave. That simple.

You are not "supporting" the agencys, you would not have the job without them. They are entitled to make money for the sevice they provided, even if that service is little more more than a "introduction". Don't want to pay them? Find the clients direct yourself.

Now, looking at this from another angle, the clients point of view, it's an entirely different matter.

If a agencys is takeing a large margin that means the end client is paying over the odd's for your services. The client would be paying far more for your services (or services of someone like you) than they could have got elsewhere and i think we all can agree that is not a way to run a buisness

And as to this agency that is a sole supplyer and who is then subcontracting this work out to other agencys, if i was the client for this, that first agency would not be the sole supplyer the instant i found out. They obviously are unable to give me the service i would be paying them for at reduced cost (Like why agree, in the first place, to a "sole supplyer" unless you were getting a good deal from them, aka reduced margins?) You definatly would not be making that saving if two agencys are taking a cut. Only other reason i can think for taking on a sole supplyer is for improved level/quality of service and how would they be getting that if the agency is subcontracting the work?

The client should be the one really concerned here, not you. It's no one else's falute but your own if you are underpriceing yourself so much that the agency get the ability to make a large margin.

[n5gooner]

my pimp take 16.x % from me each invoice - now I feal it is high - but he has to take somthing I guess.....on my next renewal I will be pushing for more money - or I will walk.....

[ancient]

So - you work an hour per day for the Agent - Does he work an hour per day for you - I doubt it.

[n5gooner]

So - you work an hour per day for the Agent - Does he work an hour per day for you - I doubt it.

I doubt it too, and when they can't even pay me on time !!!! But he did introduce me to the posistion.....prehaps there should just be a one off payment bit like permies......good for the contractor, good for the client......and prehaps that one off payment happens on each renewal....

[ancient]

Going to shock myself here and agree with DA. You should not care as long as you are getting what you want and if you are not getting what you want either renegociate or leave. That simple.

You are not "supporting" the agency's, you would not have the job without them. They are entitled to make money for the sevice they provided, even if that service is little more more than a "introduction". Don't want to pay them? Find the clients direct yourself.

Now, looking at this from another angle, the clients point of view, it's an entirely different matter.

If a agencys is takeing a large margin that means the end client is paying over the odd's for your services. The client would be paying far more for your services (or services of someone like you) than they could have got elsewhere and i think we all can agree that is not a way to run a buisness

And as to this agency that is a sole supplyer and who is then subcontracting this work out to other agencys, if i was the client for this, that first agency would not be the sole supplyer the instant i found out. They obviously are unable to give me the service i would be paying them for at reduced cost (Like why agree, in the first place, to a "sole supplyer" unless you were getting a good deal from them, aka reduced margins?) You definatly would not be making that saving if two agencys are taking a cut. Only other reason i can think for taking on a sole supplyer is for improved level/quality of service and how would they be getting that if the agency is subcontracting the work?

The client should be the one really concerned here, not you. It's no one else's falute but your own if you are underpriceing yourself so much that the agency get the ability to make a large margin.

Whilst I respect everyone’s view here on this, I am not too sure.

Most Clients have a budget for a role.

If there is one agent involved and a fixed margin then everything is very clear.

If there are multiple suppliers to the end Client it is a competive situation and the agent will bid in line with the customer budget and try and be competitive.

If there are a chain of agents between the contractor and the client then the Contractor holds the thin end of the wedge.

Sometimes the rate is not known until after the interview, so the Contractor has already invested in the opportunity and is locked-in to a degree (with the front-end Jobserve Agent who may be sub-contracting via a preferred supplier).

If the Contractor knew the lay of the land up front, he could choose the shortest value chain and avoid any surprises from the first Agent in the chain, like yes, the rate is x, and take it or leave it.

Very often, it is simple, e.g. specify what you want in terms of rate and then progress from there. There also situations were the rate is not agreed up front as there may be a number of roles to be filled at various levels. This can leave the Contractor exposed in terms of the final negotiation and who is involved.

[bfg]

Rates

Ask for what you want, if you get it all is good if not walk away from it.

It is AMAZING how many times when you do this that you get a call soon afterwards saying "I've worked hard on this and managed to get you the rate you wanted after all" very funny indeed when you know the client better than the agent does - for example by having worked with the hiring manager before.

If you REALLY want to know the margin beforehand ask for it, in writing if you like, if you don't get told then walk away from it. If you want to check the margin later then just look in the purchase ledger database and work it out, if it's "too high" then don't whinge, celebrate - you're getting a rate rise next renewal!

Agents need us, we need agents work with them the same as you would with any other provider of any kind of service and you will not go far wrong.

[mcquiggd]

Alexander Mann also emply such practices as requiring a contractor to invoice for a months period by 12 am Tuesday, then process it the following Monday, then pay 30 days later - now, I doubt they wait that long to be paid by their client. The consultancy that employs Alexander Mann takes their share of profit. In addition a rate is paid to the agency on top of Alexandar Manns cut - for a public sector project that increases the amount of money you pay to these people as part of your taxation, and they are just a waste of money.

Now, Im sorry, but surely it would be cheaper to do that in house for many organisations. For gawds sake if they can afford an HR department, can cope with payment of permanent salaries, pensions, sick pay, holiday entitlement, promotions, disciplinary action, and redundancies, then they have the nouse to recruit and pay a contractor direct without adding an additional level or three of cost to themselves.

I have noticed more and more companies are advertising permie positions directly on job boards. Why they dont do the same for contracts is really a suprise.

Ive also noticed more and more ridiculously expensive projects funded by taxation.

Oh, and most of the stories on the front page of CUK seem to be scare stories of the results of surveys by 'Consultantancies' who funnily enough offer a 'solution' to such problems. One of the latest is the 'versatalists' story. PMSL. Trying to find an agent who understands how to spell ASP and SQL is hard enough - try finding one who also understands regulatory compliance, etc...