Reply to: The Experiment - Agencies charging 30% - Live Test Scenario

[pr1]

From the other side, surely a development manager must see the adverts placed by agencies for folks to fill their needs? If they spot the role advertised at £300 per day when they've been told that they are going to pay £700, do they not get any bells ringing, i.e. I'm gonna get a monkey here.

I would if I was a dev manager and I saw it.

I've seen people on here who found out they were being marked up 50%+ by agencies, also that consultancies charged them out at 2-3X their day rate so it definitely happens. The reason they put it out to agencies to source is so they don't have to worry about finding someone so definitely not surprised when client has no idea how much someone is actually on

[OnceStonedRose]

Say you're on £300/day. Knowing the agents rate means you know whether the client thinks he is getting a £700/day guy or a £350/day guy, that will alter their expectation. You might be getting a load of sh*t because you're "under-performing" as they're expecting the world

From the other side, surely a development manager must see the adverts placed by agencies for folks to fill their needs? If they spot the role advertised at £300 per day when they've been told that they are going to pay £700, do they not get any bells ringing, i.e. I'm gonna get a monkey here.

I would if I was a dev manager and I saw it.

[pr1]

Knowing the agents rate (or the rate of other contractors) has no positive worth

Say you're on £300/day. Knowing the agents rate means you know whether the client thinks he is getting a £700/day guy or a £350/day guy, that will alter their expectation. You might be getting a load of sh*t because you're "under-performing" as they're expecting the world

[SimonMac]

I used to care about the agents cut. I've since came to realise their cut doesn't affect me. If I want a pay bump, I ask for it. Whether the agent successfully passes it on or not is immaterial to what myCo pulls in. In fact them passing it on is a good thing because it ensures there some fat to chomp when my greedy ass inevitably wants another bump. Knowing their margin just means you can negotiate with the extra bit of confidence the knowledge brings you.

Knowing the agents rate (or the rate of other contractors) has no positive worth, you resent someone else is getting more money than you.

I don't know everyone on the forum so I apologise for making a sweeping statement, but those contractors I personally know that I would believe has what it takes to play hard ball with an agent or walk have been contracting long enough to

A) have a decent warchest behind them so they can walk so will walk away from an offer that doesn't suit them

B) know the game well enough to understand how it's played so only care about their rate anyway which they are already happy with when first negotiating

C) and this is the most important one, never ever ever mention rate or agent cuts on here because they know it's no ones business but theirs.

Those who know keep quite, those who don't shout loudly

[fool]

Remember they are not taking 30% of your money, you are taking 70% of theirs, they have the contract with the client not you.

Also why should knowing what the agent is getting affect what you want? If you are contracting just for the money I can probably understand this, I negotiate a rate with an agent that I am happy with, what they charge the client is of no interest to me as I will not entertain an offer below what I consider to be my floor. Would you want to pay less for a Big Mac if you knew it only cost 10p to make rather than £1?

And another thing, I don't like the idea's of percentages as depending on the rate the numbers are meaningless, on a £250 a day contract (to the client) 30% to a pimp (£75) could be considered acceptable as again they will have a minimum that is worth their while.

Although lastly I have just thought why am I bothering trying to prepare a well thought out piece of prose on a thread that is complete bulltulip, I often forget that even the biggest fantasist on here is completely different in real life, which is why I assume MF doesn't go to any of the social meets.

I used to care about the agents cut. I've since came to realise their cut doesn't affect me. If I want a pay bump, I ask for it. Whether the agent successfully passes it on or not is immaterial to what myCo pulls in. In fact them passing it on is a good thing because it ensures there some fat to chomp when my greedy ass inevitably wants another bump. Knowing their margin just means you can negotiate with the extra bit of confidence the knowledge brings you.

[SimonMac]

Remember they are not taking 30% of your money, you are taking 70% of theirs, they have the contract with the client not you.

Also why should knowing what the agent is getting affect what you want? If you are contracting just for the money I can probably understand this, I negotiate a rate with an agent that I am happy with, what they charge the client is of no interest to me as I will not entertain an offer below what I consider to be my floor. Would you want to pay less for a Big Mac if you knew it only cost 10p to make rather than £1?

And another thing, I don't like the idea's of percentages as depending on the rate the numbers are meaningless, on a £250 a day contract (to the client) 30% to a pimp (£75) could be considered acceptable as again they will have a minimum that is worth their while.

Although lastly I have just thought why am I bothering trying to prepare a well thought out piece of prose on a thread that is complete bulltulip, I often forget that even the biggest fantasist on here is completely different in real life, which is why I assume MF doesn't go to any of the social meets.

[mudskipper]

There's no danger of going over 2 years, both contracts are to fill in until 2 permies are recruited, a senior and a junior, so I'm doing a hybrid of both permanent job descriptions - and they are not even sure about whether they will recruit the 2 permanent staff or try to restructure some other way.

Don't you have to be directly replacing one person and doing everything they would do under direction and control etc etc.

No, and two years doesn't come into it.

[NotAllThere]

...
I just meant being employed in general terms - children aren't allowed to work for money, so why are there children posting on a forum about paid work?

You can stop the now.

Further, can I remind everyone that if you suspect someone is a sockie, then the correct approach is to report the post?

[GideonTheIdiot]

Probably worth reading up on IR35

There's no danger of going over 2 years, both contracts are to fill in until 2 permies are recruited, a senior and a junior, so I'm doing a hybrid of both permanent job descriptions - and they are not even sure about whether they will recruit the 2 permanent staff or try to restructure some other way.

Don't you have to be directly replacing one person and doing everything they would do under direction and control etc etc. I don't think I'm replacing any one individual, but I will read the IR35 guides on here again. It's possible the end clients think they are getting a "temp" employed directly by an agency on PAYE terms.

Employment contract? Definitely worth reading up on IR35.

I just meant being employed in general terms - children aren't allowed to work for money, so why are there children posting on a forum about paid work?

[GideonTheIdiot]

+1. We pay 12.5% but our volume is high. 15-20% is fair. Anything higher and the client's expectations are set too high by the agency's price point.

Thanks clearedforlanding that was spot on as well.

My one-man band agent takes 10%, but only when he wants to keep a client happy / get turnover on his account etc. He says he breaks even or makes nothing on 10%.

[mudskipper]

Both clients want me as a contractor while they recruit permanent staff.

Probably worth reading up on IR35

... why bother posting on a forum about contractor jobs when you are below the legal age to accept an employment contract?

Employment contract? Definitely worth reading up on IR35.

[GideonTheIdiot]

Neither may get 30% from the op, but unless careful, they will likely both get it from someone else.

Rather than commenting on their margin I would suggest to each that you have another offer, you would prefer to do their role, but question whether any movement on rate is possible. That way you should get at least one of the roles, if you want it.

They won't get it from someone else because I'm the only candidate for both.

Both clients want me as a contractor while they recruit permanent staff. If I don't accept the contract it will be withdrawn and they will struggle on until they can fill the permanent roles, or until more money becomes available. You can probably guess what sector I'm talking about, given those criteria.

Anyway the "I've got a better offer" worked, (it's true after all), I didn't really need any more sophisticated strategy than that.

However I thought it might have been interesting to try to have some fun with 2 scumbags trying to rip off charities which exist to help orphaned children. Special place in hell for them I think.

I see from the above posts that there are some children on this forum talking about farts - why bother posting on a forum about contractor jobs when you are below the legal age to accept an employment contract?

[GideonTheIdiot]

I don't know why you're portraying this as some exciting opportunity to gain something new. You're privvy to important information, and you've got two offers. Therefore you are in a strong negotiating position. Nothing more than that.

I'd aim for 15-20%. Then at renewal, reveal that you know their margin, and you will walk if they don't reduce it to 10%. They then have a choice to reduce, or go through all the uncertainty and expense of getting a new candidate.

Nice work, - your punt was correct for one of the agents - came back with 17% just like on the other recent thread about renewal.

I'm being sarcastic above - I'm not getting excited but the situation is just about interesting enough to post about, never had such access to the other side of the negotiation before, now things like advertised rates on Jobserve are starting to make sense:

Agent 1 offered his role on Jobserve at a range of 70% to 80% of the charge out rate. Then when I applied, he quoted the lower rate (70% to me, 30% to him). Today this was changed to 17% on threat of better offer. They said "The client won't pay any more than what we've offered", I said "I'm not asking them to." He understood the subtext well enough and the result was 17% as their best offer.

Agent 2 offered his role on Jobserve at 100% to 70% of the charge out rate (ie he quoted a range of rates including one of zero commission for him - dishonest already). I applied, and he put me forward at 80%, then after I easily got the job following one interview, he called me to say that, unfortunately, the rate is now lowered to include his cut ie it's now 70%.

When I asked Agent 2 why the rate had been lowered, he lied and said that the end client had told him they would not pay his original rate he tried to offer me, the client had suddenly reduced their budget and he had simply reduced my rate accordingly.

I called the client directly and confirmed there had been no such reduction, and they wouldn't be allowed to do that anyway, as a fairly prestigious charity, they have to be careful not to fall foul of anything that might put their reputation at risk. This is actually now the 3rd time he has provably lied to both me and them.

Anyway that's 2 agent tactics to be aware of -

(1) Advertise big rate, reduce just before interview, preferably in a quick sentence over the phone like "and i'm putting you forward at the rate we agreed which is (rate minus 30%) OK? Good Luck tomorrow..."

Before you realise it, you've accidentally agreed to minus 30% before you even negotiated.

or

(2) Advertise big rates - right up to 100% of the contract value.
After application from a decent candidate, reduce offered rate to 80%
After offer from client, reduce offered rate to 70%, blame the client since candidate is happy to get an immediate start and is mentally already at their desk. Make the reduction in the rate sound like it is a make or break condition of getting the job ie either accept 70% or get nothing.


The obvious counter-tactic is to get the offer from the agent, think about it for a day, then say you have been offered a better role with a rate of 40% over whatever rate they just quoted to you for the real offer. This takes you over their charge out rate and forces them to negotiate, unless of course deflation takes hold, but that's another discussion...

[OnceStonedRose]

I normally know/agree rate im gonna be put forward at, if its an agency in middle, prior to being put forward.

If in "interview" i saw that they were charging me out at shed load more id probably just say eff it and make a decision to either suck it up, i knew my rate beforehand and was ok, or to sack it off on principle of some slimey agency trying to take advantage.

Haggling after I've agreed a rate is pretty much same as "welching" on a bet, not on i reckon.

[TheFaQQer]

Secondly - Any suggestions as to best strategy for how to manipulate both agents into cutting their margin to ... what? 10% is the absolute max I will accept them taking from my hard work's rewards.

Or maybe we can collectively come up with a strategy to argue them down to 0%, playing one off against the other etc etc.

Hell why not even a negative margin of 10% in these deflationary times! We're all in this together after all.

Get them in a fighting pit - two agents, one knife, winner takes all.

That's as likely as any of your other suggestions, or indeed of this being genuine.