Reply to: Is there any legal limit on how big a cut an agency can take

[d000hg]

I'm afraid you misunderstand the nature of the contract. They are not taking a cut of your contract, they are giving you a cut of theirs.

I have never agreed with this.

The contract could continue to exist without the agency, but the contract could NOT exist if if were not for the relationship between the client and the contractor.

No it couldn't, you would not get paid. Whereas the agent could conceivably replace you with another contractor under their contract with the client.

Therefore, the agency is a parasitic partner in the relationship and as a business person I don't accept that the parasite that owns the contract. Fair enough, the agencies do match contractors with the vacancies but I don't see that this should make us forever beholden to them. There should be an introduction fee and once that is paid off, the contractor is free to do business as they see fit without these restrictive covenants so beloved of agencies.

They're not a parasitic partner because that means they benefit only. It is an arrangement of convenience, a symbiotic relationship.

I agree that conceptually it should be seen as the agent taking a cut though, because that is the entire model on which using an agent works.

[kingcook]

Therefore, the agency is a parasitic partner in the relationship and as a business person I don't accept that the parasite that owns the contract.

+1

[d000hg]

I've always though it was a valid point.

If you bought a car for £50k and were happy with the price, and the next week they dropped the price to £40k, you'd not kick yourself?

[Wanderer]

I'm afraid you misunderstand the nature of the contract. They are not taking a cut of your contract, they are giving you a cut of theirs

I have never agreed with this.

The contract could continue to exist without the agency, but the contract could NOT exist if if were not for the relationship between the client and the contractor.

Therefore, the agency is a parasitic partner in the relationship and as a business person I don't accept that the parasite that owns the contract. Fair enough, the agencies do match contractors with the vacancies but I don't see that this should make us forever beholden to them. There should be an introduction fee and once that is paid off, the contractor is free to do business as they see fit without these restrictive covenants so beloved of agencies.

[Sockpuppet]

I've always thought that is a truly stupid argument. Being ripped off is being ripped off.

I've always though it was a valid point.

[ZARDOZ]

You'd have to be doing something special to be getting the £500-600 that would normally imply.

But then if they're paying the PM £900/day maybe they have money to burn!

Why does the PM show his rate on his timesheet?

Could it be that he starts at 09:00 every day?

[d000hg]

The PM is on £900 a day. He flashed his time sheet accidentally.

I'm on £350 a day. Speaking with some of the other technical chaps and the level at which I've been introduced into the company I'm pretty certain. The agent was just too eager. The company made £150m profit last year and I seem to be steering a major project, at least on a technical level. Maybe I'm reading too much into it but I highly doubt that the agent is billing the company any less than £650-700/day.

You'd have to be doing something special to be getting the £500-600 that would normally imply.

But then if they're paying the PM £900/day maybe they have money to burn!

Why does the PM show his rate on his timesheet?

[kingcook]

If the PM is a fellow contractor then ask how much they are paying the agency for you, they may be sympathetic and help you get a pay rise out of the agency.

^^ This ^^ definately.

Worked for me (after buying a couple of lunch beers one day)

[Wanderer]

I highly doubt that the agent is billing the company any less than £650-700/day.

If the PM is a fellow contractor then ask how much they are paying the agency for you, they may be sympathetic and help you get a pay rise out of the agency.

[dogzilla]

Rate?


How do you know for sure? If you can tell just by the eagerness of the agent, you're a better man than me!

The PM is on £900 a day. He flashed his time sheet accidentally.

I'm on £350 a day. Speaking with some of the other technical chaps and the level at which I've been introduced into the company I'm pretty certain. The agent was just too eager. The company made £150m profit last year and I seem to be steering a major project, at least on a technical level. Maybe I'm reading too much into it but I highly doubt that the agent is billing the company any less than £650-700/day.

[Wanderer]

The client holds the most sway in this situation. They can actually demand to know how much the contractor is getting or specify the amount - if they know how agencies work.

I've had clients to this. They say how much they are paying and the agency is on a fixed margin.

I wish more clients would do business this way, open and transparent. Agencies have played their game as a middle man ripping off clients and contractors alike for far too long.

[kingcook]

2. After the client came back with the offer I should have opened up the salary negotiations straight away.

Rate?

I'm pretty sure I'm getting done for 50%.

How do you know for sure? If you can tell just by the eagerness of the agent, you're a better man than me!

[dogzilla]

Interesting thread.

I'm wondering if we can do better in the way we negotiate with agents....

My current contract role went like this... Agent called me up, asked me how much I want per day, I was caught off-guard (first contract in a while) and she offered the price. It seemed quite reasonable and I said yeah I would be interested. So we go through the process and she's keen to stress the day rate "we agreed" at every possible opportunity.

Then I do the interview, apparently client was super impressed and offered the job immediately after speaking with me. Never discussed price after that... I was hook line and sinker. Anyway I am happy with the rate so no bother, if they renew I will negotiate further.

However going back, I think I could have played it better...

1. When agent mentioned price on the first phonecall, I should have said "yes that would be in the region, but I'd have to do the interview and find out what will be expected before I agree to a price"
2. After the client came back with the offer I should have opened up the salary negotiations straight away.

I'm pretty sure I'm getting done for 50%. This is my first contract gig in a while as I say, but the clientco is under the impression I'm some sort of uber consultant, i had a meeting with a head of delivery for europe and he's like "we are so excited to have someone of your experience on board".... To be fair I am very good at what I do and I have worked with the best in the industry so I'm hoping I'll be able to get another 30% next time around.

[BolshieBastard]

Firstly no there isn't a legal limit, secondly, where you happy with the rate before you knew what there cut was? If yes why are you complaining now.

Sorry, that attitude is a bit lame.

Wouldnt you feel ripped off if you sold say a piece of pottery for a couple of hundred quid when the potential buyer told you it was only worth maybe 500 quid then find out the buyer knew its true worth and had sold it for say 10 grand?

OK the figures are different but would you still be 'happy' with what you got for the pottery!?

People including experienced contractors make decisions on rate based on all sorts of factors but, if the agent 'cons' you one way or another, I certainly wouldnt be happy about accepting a rate I knew the agent was underplaying.

[d000hg]

Do you negotiate contracts based on the margin ie give me 80% of whatever you get, or do you negotiate based on the rate you want?

You can't have it both ways.

The whole concept of having an agent is they take a cut of what you bring in, for providing services. The fact you're legally taking a cut of their pay doesn't change this.

But if you're happy being screwed over, that's your choice I suppose. I might be happy on £400 a day but I'd be more happy on £600