Reply to: Rate differences between independent and consultancy contractors

[flamel]

Correct: The client is ostensibly paying for a much more comprehensive service with a high level of legally enforceable responsibility and the ability/back-up to see a project through to conclusion. Shareholders (rightly or wrongly) tend to accept the consequences (good or bad) more readily if managers have passed the burden to 'consultants' rather than just supplementing headcount with freelance contractors.

That's what the companies THINK they are getting but as we all know, even the big consultancies sometimes act like a bodyshop for anyone on their bench

[Taita]

I would go so far as saying that they are paying for a _consistent_ service. Whether that's consistently bad or otherwise, it's a full service where everyone is working to the same methodology, they have their own internal hierarchy so fewer disputes over what they are doing and how they are doing it, and if there is a slip in planning and the project needs more bodies then they can effortlessly add to the pool more people of a similar mindset.

Correct: The client is ostensibly paying for a much more comprehensive service with a high level of legally enforceable responsibility and the ability/back-up to see a project through to conclusion. Shareholders (rightly or wrongly) tend to accept the consequences (good or bad) more readily if managers have passed the burden to 'consultants' rather than just supplementing headcount with freelance contractors.

[meridian]

One difference is as a contractor you have no real intention of instigating the sub clause, as a Consultancy they will ship a new body in when the find someone more profitable.

They are paying for a service, and with that greater level of service comes a greater price

I would go so far as saying that they are paying for a _consistent_ service. Whether that's consistently bad or otherwise, it's a full service where everyone is working to the same methodology, they have their own internal hierarchy so fewer disputes over what they are doing and how they are doing it, and if there is a slip in planning and the project needs more bodies then they can effortlessly add to the pool more people of a similar mindset.

[aoxomoxoa]

My just concluded contract was as an associate through a small niche consulting/advisory firm to their end client. I know exactly the rate I was billed at, and it's a fair bit more than I get, but I'm getting exactly what I asked for when I first discussed the gig, so no grumbles there.

It turned into a 14 month contract (from an initial engagement of four months), so I've been quids in. I'm now discussing a new contract for another client of theirs, which I expect to be awarded, so at the moment am not overly bothered about marketing myself for the next role. So, another reason not to begrudge them their margin.

Also, they're nice people to work with!

[Ebenezer]

These consultancy firms are not all bad though; remember that if they are rebilling you at ~£2K/day they're not all that sensitive to the difference between £500 and £700 in your rate. If there's an agency in between, of course, the agent will be far more attentive to the odd £50 here and there.

[SimonMac]

One difference is as a contractor you have no real intention of instigating the sub clause, as a Consultancy they will ship a new body in when the find someone more profitable.

They are paying for a service, and with that greater level of service comes a greater price

[SpontaneousOrder]

You are right, I have not read it properly, that's the money the client is paying the consultancy. I thought the margins were lower than that....so the consultancy getting half of the money for themselves? seems a LOT.

Do you find it odd that when a car salesman sells a car he only gets to keep a small percentage of the profit made on that car?

[rumomo50]

Read the thread again then if you don't understand it read it again.

You are right, I have not read it properly, that's the money the client is paying the consultancy. I thought the margins were lower than that....so the consultancy getting half of the money for themselves? seems a LOT.

[SueEllen]

When I heard about all these rates....£1000, £1500, are they normal for an IT contractor? Someone said that those are for Java or Oracle developers?

I'm asking because I cannot see any agency offering roles with those rates, they are much lower, less than £350. I'm IT contractor on MAINFRAME, so maybe is the technology?

Thanks

Read the thread again then if you don't understand it read it again.

[rumomo50]

FTFY

When I heard about all these rates....£1000, £1500, are they normal for an IT contractor? Someone said that those are for Java or Oracle developers?

I'm asking because I cannot see any agency offering roles with those rates, they are much lower, less than £350. I'm IT contractor on MAINFRAME, so maybe is the technology?

Thanks

[Eirikur]

One offers a body, that it, no other supporting services, the other offers a service or a managed solution with all the additional problems.

FTFY

[malvolio]

Interesting thought that. Might be easy for someone like a Prog. Mgr or a Proj.Mgr to know such information, however a developer/BA/Architect may not have the required reach/contacts to get that info.

Yes, stakeholder management and all that usual stuff applies by default, however you may not be able to apply the information you know at the same client. May be 'a learning' for the next engagement ....

I've said it before, but contractors who think their job is being a C# coder or a PM are wrong. Their job is being a freelance contractor operating as an independent business. The skills you deploy to justify your earnings are subsidiary to that.

There's plenty of information out there; people need to learn to look for it.

[FatLazyContractor]

I am slightly surprised when contractors can't work this out tbh. Surely as an independent supplier you should understand all the different types of engagement to you client. It's your job after all. If not that at least understand the roles and offerings of all the stakeholders on site.

Interesting thought that. Might be easy for someone like a Prog. Mgr or a Proj.Mgr to know such information, however a developer/BA/Architect may not have the required reach/contacts to get that info.

Yes, stakeholder management and all that usual stuff applies by default, however you may not be able to apply the information you know at the same client. May be 'a learning' for the next engagement ....

[northernladuk]

One offers a body, that it, no other supporting services, the other offers a service or a managed solution with all the bells and whistles.

The extra is to pay for seamless transition of other resources when existing ones visas run out, training before attending site, account/Service managers and a lot of ancillary staff in the background that are not being paid by the client yadda yadda

I am slightly surprised when contractors can't work this out tbh. Surely as an independent supplier you should understand all the different types of engagement to you client. It's your job after all. If not that at least understand the roles and offerings of all the stakeholders on site.

[unixman]

The client and the consultancy have a large business relationship, probably involving a lot more than renting a body or two. The individual fees will be agreed in the overarching contract.

Like others, I have been hired out by a consultancy, actually working on the client site. I received good permy wages, while the company was getting over 800 pd (according to rumour), and that was years ago.