Reply to: Agency cannot agree rate with end client: how do I proceed?

[LondonManc]

If its a public sector end client sourcing the work through one of the newer procurement frameworks then this may be the case, I know that a number of them stipulate a maximum of 7% mark-up can be made on any third party resourcing deal (some frameworks have a higher number). So on £500 a day the agent can charge £535 and make £35 in commission.

Reducing your rate to £450 (i.e. a drop of £50) would mean the agent can now only charge £481.75 and makes £31.75 in commission - only the client wins....

It's great finding one of these contracts with one of the big 4 as you know their day rates are huge so they have no qualms about giving you £900 a day as they then earn £60+ a day and get the job done by a happy contractor where as if you asked for a more "in range" rate of £600 per day they only get £36 and a "not miffed" contractor; on either rate you will still be less than their most junior resource is charged at anyway

Plus at £900 a day, you're more likely to go the extra mile and bring their junior Powerpointers up to speed quicker so they can charge them out at £1500 instead of £1200 sooner rather than later.

[oilboil]

That's an interesting spin I didn't think about. I would be very surprised indeed if their system stopped them doing this but now you mention it I guess it's possible.

Have you made them an offer yet?

Keep us appraised. I'd be very interested to know if there are more reasons than just the agent being greedy that are stoppers in situations like yours.

If its a public sector end client sourcing the work through one of the newer procurement frameworks then this may be the case, I know that a number of them stipulate a maximum of 7% mark-up can be made on any third party resourcing deal (some frameworks have a higher number). So on £500 a day the agent can charge £535 and make £35 in commission.

Reducing your rate to £450 (i.e. a drop of £50) would mean the agent can now only charge £481.75 and makes £31.75 in commission - only the client wins....

It's great finding one of these contracts with one of the big 4 as you know their day rates are huge so they have no qualms about giving you £900 a day as they then earn £60+ a day and get the job done by a happy contractor where as if you asked for a more "in range" rate of £600 per day they only get £36 and a "not miffed" contractor; on either rate you will still be less than their most junior resource is charged at anyway

[northernladuk]

Paragraphs 2 and 3: those are discussed in other posts. The rate is low but the sticking point is the agency's cut. And I suspect that even if I offer to lower my rate that the payment system in operation would _still_ prevent a bigger cut to this agency.

That's an interesting spin I didn't think about. I would be very surprised indeed if their system stopped them doing this but now you mention it I guess it's possible.

Have you made them an offer yet?

Keep us appraised. I'd be very interested to know if there are more reasons than just the agent being greedy that are stoppers in situations like yours.

[dweezil]

You seem to be in a curious position where you think the agency is important to you. If that were not the case I would - Option 1 - go to the client and say "I'll work for £x - please find me an agent you use to engage me".

However I still can't see what is going on here. I can only assume the agency has said you can have the job but the rate is lower than you want. So Option 2 is to say 'Yes' so you can meet your cashflow obligations.

Is there any route available that bypasses the agency (direct, Agency B)?

Paragraphs 2 and 3: those are discussed in other posts. The rate is low but the sticking point is the agency's cut. And I suspect that even if I offer to lower my rate that the payment system in operation would _still_ prevent a bigger cut to this agency.

In relation to paragraph 1. In my experience, and in my particular sector, a good relationship with a good agent who understands the roles, and the sector, and has many good contacts is valuable. And I do believe this agency has been good to work with. In other sectors perhaps the agency is irrelevant.

I know there are a load of dirty tricks some agencies will use e.g. say they are putting you forward then not put you forward, thus ensuring your CV does not go forward through another agent. I believe this agency won't do that sort of thing.

[GhostofTarbera]

Agency cannot agree rate with end client: how do I proceed?

You have probably lost many days invoicing already faffing about this, 1 week out Takes care of a reduced day rate for 6 months

[jbond007]

I have an agency problem: how should I handle the agency? Can I ditch them or am I liable for their costs?

I have told the agency I need a resolution: should I provide a deadline then walk away from them? This agency has spent a lot of time trying to make this deal happen. The role has been advertised for months inside IR35 but has been changed and is now outside (since about 2 weeks ago). Negotiations in respect of placing me would have started at that point.

What is the correct format in which to terminate with the agency. I am aware that I may be "burning bridges" but they will obviously lose the money they spent on negotiating which will have been considerable. Will I be liable for their costs?

Really the end client is expecting a lot for the money. They are paying a low rate given the work they want done. But I suspect I need to use a different agency, or go direct, to take up this work. Unfortunately I really need the work now.

I know this agency is asking for more commission than other agencies charge but they are a very good agency.

Surely, this is one of the most important thing. You get £50 less a day, £1000 less a month on average. But what about invoicing days lost in negotiating, looking for another contract and so forth ? You've mentioned cash flow issues in your other post as well, looks like you swallow £50 day less till you get your cashflow in better position and then can renegotiate at the point of renewal or when looking for another contract.

[Cirrus]

You seem to be in a curious position where you think the agency is important to you. If that were not the case I would - Option 1 - go to the client and say "I'll work for £x - please find me an agent you use to engage me".

However I still can't see what is going on here. I can only assume the agency has said you can have the job but the rate is lower than you want. So Option 2 is to say 'Yes' so you can meet your cashflow obligations.

Is there any route available that bypasses the agency (direct, Agency B)?

[northernladuk]

I have worked direct for a PS gig before, but this only happened after the frameworks failed to deliver and could effectively be ignored. I was really being a bit careless with wording: you could read that as "talk to someone direct in order to find out an alternative route".

Ahh yes got you.

This role involves a fair amount of technical work which is at a higher level than the usual work I was doing back in 2010 at that site. I take your point on inflation though I don't completely agree. Yes rates have been held back but some people are still doing very well.

I've also worked at this site only 2 years ago at a much higher rate that this.

But it's all about what the client is willing to pay. Some gigs are higher some are lower. I don't think inflation comes in to this at all.

Have a dig around itjobswatch.com . It's a scraping approach so only relies on the crap that are on the jobs boards but could give you an idea. The data goes back far enough.

I looked at SQL and that's stayed the same since 2006
https://www.itjobswatch.co.uk/contra...rate_histogram

Project Management does show an increase however
https://www.itjobswatch.co.uk/contra...0management.do

DBA's are static..
https://www.itjobswatch.co.uk/contracts/uk/dba.do

and so on.

[dweezil]

Even more unlikely you can go direct for a PS gig. They just don't have the frameworks for it.

Yes per day sorry.

I'd forget about the notion of inflation. I'm on the same rate as I was 8 year ago and was on less in the last gig. It doesn't really work to say rates have gone up just because time has passed.

I have worked direct for a PS gig before, but this only happened after the frameworks failed to deliver and could effectively be ignored. I was really being a bit careless with wording: you could read that as "talk to someone direct in order to find out an alternative route".

This role involves a fair amount of technical work which is at a higher level than the usual work I was doing back in 2010 at that site. I take your point on inflation though I don't completely agree. Yes rates have been held back but some people are still doing very well.

I've also worked at this site only 2 years ago at a much higher rate that this.

[dweezil]

OP - did the agency have the first conversation over the role with client or yourself?

Appreciate that you have now appointed the agency to represent you and so "should not" direct approach.

As an outsider - appears that the agency is being greedy. Surely the agency and client have either a "min %" or "min £" agreement in place already?

This is a really poor situation for you given that you are on the bench.

Seems your options are

1. approach client direct, downside is that you burn bridges with agency
2. allow agency and client to debate whilst keep seeking other roles
3. understand how much YOU would have to contribute to the agent

Personally, I would pursue #2

I think I will go for a time limited option 2, considering option 3.

I also wondered whether I could give up something to the agent but work towards a contract in which I keep some of the Intellectual Property. I'm aware that introduces complexity so that could just become another insurmountable problem of course... but it allows me to get fair recompense from the contract.

[northernladuk]

Even more unlikely you can go direct for a PS gig. They just don't have the frameworks for it.

Yes per day sorry.

I'd forget about the notion of inflation. I'm on the same rate as I was 8 year ago and was on less in the last gig. It doesn't really work to say rates have gone up just because time has passed.

[dweezil]

As I suspected. Bearing in mind the figures I mentioned you'd expect an average of 45 quid a week so you can see why they say 30 is low. That said 50 is a bit high.

The fact it is a big agency is probably working against you. I'd imagine they have an account manager who deals with the client to pay for as well and they are probably less flexible than a smaller one to stop the client taking the piss again and again.

Difficult situation where you are asking an agency to do something at cost or less which they aren't in the business of doing. I am and I'm not surprised they aren't being flexible. Arguments both ways.

I'm sure I'll get flamed from certain posters for suggesting this but why not offer to go halves on the difference with the agency. Tell them to knock a tenner of the day rate they pay you and they swallow the other tenner a day and make the gig happen? I wouldn't normally say give in to an agency but it's clear the agency is not screwing you personally here, it's just not worth it for them. If you are that desperate then a tenner a day shouldn't be a problem should it?

Is this a Public sector? My advice would #2 as FMCG says. The client appears to be taking the piss offering low rates for a lot of work so that grates me but it appears your situation is dictating your options.

I think you meant £45 per day rather than week.

It's not necessarily a big agency, but I'd say it's the agency with the best reputatation in my sector thus the reason they demand a higher minimum daily commission. I don't want to upset this agency too much. I know the owner quite well, and he is the block, and he's told me so.

The end client is taking the piss given the level of expertise they need.

It grates with me to take any further cut myself as I will be back to a rate I was getting at that site 8 years ago. There's been a fair bit of inflation since 2010. Yes, it's public sector.

Strangely on Sunday I had a connect request on Linkedin from a manager at the intermediate agency (people who run timesheets and recruiting at the site): this agency appears to enforce the maximum commission rate allowed to other agents. I didn't connect. I am fairly sure my original agent would see me make that connection.

[northernladuk]

There's might not be to be anything legally stopping *you* from approaching the client if you have no written agreement with the agency but there likely is an agreement in place between the client and agency already.

This.. And be careful. The agency may not take too kindly you rocking the boat.

[TheCyclingProgrammer]

So I am free to approach this end client direct and bypass this agency?

There's might not be to be anything legally stopping *you* from approaching the client if you have no written agreement with the agency but there likely is an agreement in place between the client and agency already.

[northernladuk]

The rate on offer to the agency is close to £30 per day, far below their minimum per day rate.

I've worked at this site before and people there know me: one person has contacted me and explained the situation as being the agency causing the problem. The agency themselves have said how far the £30 on offer is below their usual minimum daily commission. Really I should be on £50 more per day given the work that is being asked for BUT I need the money right now so I will take what's on offer. I have cashflow problems.

There is also an intermediate agency which runs timesheets at the site: they are also taking a cut I expect.

As I suspected. Bearing in mind the figures I mentioned you'd expect an average of 45 quid a week so you can see why they say 30 is low. That said 50 is a bit high.

The fact it is a big agency is probably working against you. I'd imagine they have an account manager who deals with the client to pay for as well and they are probably less flexible than a smaller one to stop the client taking the piss again and again.

Difficult situation where you are asking an agency to do something at cost or less which they aren't in the business of doing. I am and I'm not surprised they aren't being flexible. Arguments both ways.

I'm sure I'll get flamed from certain posters for suggesting this but why not offer to go halves on the difference with the agency. Tell them to knock a tenner of the day rate they pay you and they swallow the other tenner a day and make the gig happen? I wouldn't normally say give in to an agency but it's clear the agency is not screwing you personally here, it's just not worth it for them. If you are that desperate then a tenner a day shouldn't be a problem should it?

Is this a Public sector? My advice would #2 as FMCG says. The client appears to be taking the piss offering low rates for a lot of work so that grates me but it appears your situation is dictating your options.