Reply to: Negotiating agency commission

[psychocandy]

In my experience, getting agent to cut rate down from 16% = NO CHANCE.

If you push it, even if you push it a lot, and even if you say I want you to cut the rate not ask the client for more, they'll still possibly ask the client. Which may not be what you want. Agent knows that then they look like the good guys and you're greedy forcing them to tap up the client for more money.

In agents head why should they cut it, to say 10%? If they say 16% still or no deal and you walk they just tell the client you were trying to blackmail them (see above) but not to worry we'll get a replacement in by the end of the week. (This works especially well if they're sole agent).

Agent then gets 16% off the new contractor - possibly more.

[quackhandle]

would that 16% have been agreed at top level between pimp and client? Ie - no power to reduce regardless of how hard contractor is working.

qh

[Normie]

Agree with others - 16% isn't particularly high. 8% is about as low as you'll get, but you often here of cases of agencies charging 20-25%. If agency cut was, say, 25% then maybe see if you can get them to come down.

If you're with a big agency supplying many contractors on a PSL the rate can be even lower - mine is currently under %4.

[SlipTheJab]

Asking for an increase after 6 months is a bit rich really, at least a yr (with a couple of renewals thrown in) is more realistic. Have you looked at other ways of improving your lot. At a previous place I was at the commute was a killer so I negotiated a day WFH (no one worked from home) as it meant more to me that a few extra quid. You could threaten to leave but if the agency calls your bluff you WILL have to jog on. If you back down and stay even if they turn your request down you'll look a bit of a pillock.

[GillsMan]

Agree with others - 16% isn't particularly high. 8% is about as low as you'll get, but you often here of cases of agencies charging 20-25%. If agency cut was, say, 25% then maybe see if you can get them to come down.

You could ask them to come down to 10%, and if they agree that's 4% extra in your pocket. But as others have pointed out, they may be on a fixed margin, and they also provide services such as factoring. I have clients that are direct and a couple of clients through agencies at the moment. Trust me, the agents are worth their commission as they are by far the better payers. My direct clients rarely pay on time - the agents are nearly always on time.

[SlipTheJab]

You need to put a justification together if you intend to do this IMO.

I recently got a substantial rise for a contract extension and this rise was based on the agency cutting it's fee plus the client paying a bit more.

My justification for a rise was based on the results achieved after 6 months in the role (programme stabilised, 2 projects successfully delivered with £xm of business benefit banked etc. etc)

I spoke to both the agency and client in person explaining this.

Agency was mature about this and wanted to keep both contractor and client happy. They cut their rate from 16% to 10%

Everything is always negotiable sometimes you will cut a deal, sometimes not

10% of a higher rate meant the agency probably didn't lose out money wise

[silverlight1]

You need to put a justification together if you intend to do this IMO.

I recently got a substantial rise for a contract extension and this rise was based on the agency cutting it's fee plus the client paying a bit more.

My justification for a rise was based on the results achieved after 6 months in the role (programme stabilised, 2 projects successfully delivered with £xm of business benefit banked etc. etc)

I spoke to both the agency and client in person explaining this.

Agency was mature about this and wanted to keep both contractor and client happy. They cut their rate from 16% to 10%

Everything is always negotiable sometimes you will cut a deal, sometimes not

[northernladuk]

If you are putting in a sterling effort and busting your balls send a justification for a rate rise to the agency and ask them to present it to the client. Hopefully the client will recognise what a stunning job you are doing for them and agree to an increase. The agency may also increase their rate and you both win.

16% isn't particularly high in most industries for every client outside the big banks and multi-nationals.

How often does this actually happen in reality though. The client pays contractor rates for some to come in and do a sterling job. Thats not justification and I'd be a bit pissed if a contractor tried that one.

[Andy Hallett]

If you are putting in a sterling effort and busting your balls send a justification for a rate rise to the agency and ask them to present it to the client. Hopefully the client will recognise what a stunning job you are doing for them and agree to an increase. The agency may also increase their rate and you both win.

16% isn't particularly high in most industries for every client outside the big banks and multi-nationals.

[avgjoe]

If you're not prepared to walk then you're unlikely to get it. Don't ask don't get, however agents won't give in if asked, they will only give in if you have a stronger hand. Don't bluff. If you're vital to the project or have a good relationship with the client then that may work in your favour

Well, this is what i'm going to try to emphasize to the agent.. or try anyway

[VillageContractor]

I've really only had this once early on in my contracting career not long after the financial crash... the agency told me not to be greedy with the rate I was asking so settled on a rate I thought reasonable for a local contract. I can't entirely remember the background but I had asked the agency about an increase at renewal and mentioned this to the PM who casually asked what I was being paid... it transpired that the agency margin was in the region of 35% so as a result of a number of conversations in the background my rate was increased substantially.

Ultimately if you have asked for an increase and it's not forthcoming though you have to be prepared to either suck it up and continue or walk.

If you're not prepared to walk then you're unlikely to get it. Don't ask don't get, however agents won't give in if asked, they will only give in if you have a stronger hand. Don't bluff. If you're vital to the project or have a good relationship with the client then that may work in your favour

[avgjoe]

Are you happy with your rate?

Or are you trying to reduce the bill to the client?

Turn it on its head... the agent is giving you 84% of his money...

The agent can go to the client and ask for more - but it would mean the client paying a whole lot more for me just to get a slight bump up. I am definitely replaceable but this whole saga started out when I accepted less than what was initially sold to me when I took the job. So, it's clear that the agency is taking the piss.

I am happy to be earning, but they do need a reminder (at least) to reconsider their stance. I am not suggesting that they should not earn anything, but they need to understand that it takes a unique individual to last in that company and appreciate that this may well become a longer term relationship. So they may end up making more anyways in the long run

I have a good relationship with my boss and although nothing is set in stone, he and other senior members have discretely expressed their desire to keep me on.

[ShandyDrinker]

16 percent isnt bad and it's very dependant on a number of factors, size of agent, never of contractors they have, what you are being paid etc. Best you are going to do is get a few single percentage points off him at the very best. I wouldn't be spoiling a decent gig for a few percent.

I also can't see you risking bench time for so little either.

If you want it to work you can't 'try'. You tell them what you want and if you don't get it you walk. They know full well you won't. They do this for a living.

^^ What NLUK said.

[northernladuk]

16 percent isnt bad and it's very dependant on a number of factors, size of agent, never of contractors they have, what you are being paid etc. Best you are going to do is get a few single percentage points off him at the very best. I wouldn't be spoiling a decent gig for a few percent. Low is 10-12 percent.

I also can't see you risking bench time for so little either.

If you want it to work you can't 'try'. You tell them what you want and if you don't get it you walk. They know full well you won't. They do this for a living.

No one is replaceable. You might think you are not but I may most cases you'd be wrong. Your client will also likely to have a rate card so unlikely they will pay more just because you being mercenary.. And he's not your boss.

[ShandyDrinker]

As I've not done this much before, I thought it would be good to see if anyone else has been in the same situation

I've really only had this once early on in my contracting career not long after the financial crash... the agency told me not to be greedy with the rate I was asking so settled on a rate I thought reasonable for a local contract. I can't entirely remember the background but I had asked the agency about an increase at renewal and mentioned this to the PM who casually asked what I was being paid... it transpired that the agency margin was in the region of 35% so as a result of a number of conversations in the background my rate was increased substantially.

Ultimately if you have asked for an increase and it's not forthcoming though you have to be prepared to either suck it up and continue or walk.