Reply to: Agency excessive margin

[Platypus]

I have just discovered that my agency is netting 25% on my daily rate.

Well I do have some sympathy. I've just discovered that my agent is taking 32% of the gross value of my contract. Mind you it's a cushy WFH role and the agent pays me (monthly) within a week of invoice despite waiting 60 days for the client to pay them. Another issue is that the agent is one of the few on the client's PSL and I have a clause in my contract that stops me switching agents. So to keep my cushy job I've decided I'll have to suck it up. But I'm still peeved. Even the client told me I was being screwed

[redlorry]

Just get a gig with Hays. At some point they will mail everyone all the contractors rates again...

Brilliant.
So the agency I was working through isn't the only one who does this then.
They're bloody useless. Every couple of months said agency sent me an email with the invoice requesting payment from the Client.
That's how I found out they were skimming a very healthy chunk for themselves, well above their agreed percentage with the Client. I used it as leverage to increase my day rate without affecting what the Client paid.
After that I still got the odd email from the agency with the invoice by mistake. They still weren't charging their agreed percentage, but it was a lot closer

[meridian]

No, you are including the perm introduction fees which are effectively 100% as we have no direct cost of sale.

Ah, of course.

So from p95, perm revenue is 85k. Take that off both the revenue and the gross profit, and you have 661k revenue and 133k gross profit from contracting, so around 20% on average then.

[Andy Hallett]

So assuming that Revenue is the gross you receive from clients, and Gross Profit is the difference after paying the contractors (I.e it's your margin), then you're averaging 30% off the clients.

Averaging.

No, you are including the perm introduction fees which are effectively 100% as we have no direct cost of sale.

[meridian]

My honest answer.

http://www.sthree.com/images/reports...ments-2014.pdf

So assuming that Revenue is the gross you receive from clients, and Gross Profit is the difference after paying the contractors (I.e it's your margin), then you're averaging 30% off the clients.

Averaging.

[DaveB]

Just get a gig with Hays. At some point they will mail everyone all the contractors rates again...

Current agent did that ona smaller scale. Sent me some poor sods aggent/client Ts&Cs by mistake detailing what he was getting paid and what the client was paying.

Suprisingly little considering.

[tractor]

.....

The farmer invested a lot of money in feed, veterinary bills, and cared for the cow for a number of years. The agent phoned someone up.

The farmer usually collected CAP payments for not farming.

[SpontaneousOrder]

The farmer invested a lot of money in feed, veterinary bills, and cared for the cow for a number of years. The agent phoned someone up.

Agency invested in an office & telephony & agents.

Agent invested his time in sitting at his desk every day, when he could be doing something more fun, before he landed the role.

[d000hg]

I just had steak for dinner. Cost about £7 from tesco. Have to say I'm annoyed about that because when it was born as a bit of a cow, it cost the farmer nothing. Bloody shysters.

The farmer invested a lot of money in feed, veterinary bills, and cared for the cow for a number of years. The agent phoned someone up.

[Andy Hallett]

She showed you hers, now show her yours, what are your margins? Not that we expect an honest answer.

We are not debating recruitment agencies profit margins, just the cut they take out of what the client is paying and Lisa already told you how much her Umbrella is charging.

My honest answer.

http://www.sthree.com/images/reports...ments-2014.pdf

[northernladuk]

Yep, totally agree. You run your own business, every else's is their concern.

Interesting side comment I read somewhere else a while back. If you come across commercially sensitive information such as this and then publish it for your own or others' use, aren't you committing an offence under the Computer Misuse Act, not to mention your own contract which will have something in it about preserving client confidentiality... Just a thought...

Just get a gig with Hays. At some point they will mail everyone all the contractors rates again...

[LisaContractorUmbrella]

She showed you hers, now show her yours, what are your margins? Not that we expect an honest answer.

We are not debating recruitment agencies profit margins, just the cut they take out of what the client is paying and Lisa already told you how much her Umbrella is charging.

[malvolio]

That first time finding out how much an agency gets of your hard earned cash and then coming onto a forum to complain about it is a contractor right of passage! It's all part of the becoming a seasoned contractor journey

Yep, totally agree. You run your own business, every else's is their concern.

Interesting side comment I read somewhere else a while back. If you come across commercially sensitive information such as this and then publish it for your own or others' use, aren't you committing an offence under the Computer Misuse Act, not to mention your own contract which will have something in it about preserving client confidentiality... Just a thought...

[psychocandy]

To a certain extend I agree with Bolshie - its just nuts sometimes.

One gig I had the agent was unbelievable. Told the client they were on a fixed margin then client didnt notice it wasnt in contract so they didnt stick to this.

Contractors were told the client said one thing and they hadn't and vice versa. Played one off against the other. Lied to both parties and pretty much risked it big time but in the end did very well out of it.

Even got contractor (not me) to cut his rate because of 'client budget cuts' and then pocketed the extra.

This sort of thing can never be good for anyone (apart from the greedy agent).
Lot to be said for fixed margins IMHO. Contractor gets his rate, agent gets his cut, client knows the score, no lying or deception needed.

[sartois]

That first time finding out how much an agency gets of your hard earned cash and then coming onto a forum to complain about it is a contractor right of passage! It's all part of the becoming a seasoned contractor journey