Reply to: Contract Renewal - what to do?

[mattfx]

Hmm where you might consider that don't let an agent or client try sell you the length of a gig as a reason to take a lower rate.

I know in an ideal world you should have your war chest built up, ready to rock and roll so that in situations like this you can extract the most financial value, but just starting in contracting not everyone has that or can afford substantial bench time - just thought it'd be a consideration. I'd never let an agent sell me a gig based on duration for a lower rate if it was a fresh engagement, but if I had been somewhere for one stint already, liked where I was and the projects I was working on, its the known versus the unknown and i'd at least mull that part over.

[northernladuk]

What's the security worth to you? 12 month contracts aren't easy to come by (unless via extension) and that has value in itself.

Can you afford to go on the bench if you get dumped?

In my mind, these are the two very important questions you need to ask yourself. If the answer to both is "Very valuable and no i cannot afford" then you've answered your question about pitching the raise.

Hmm where you might consider that don't let an agent or client try sell you the length of a gig as a reason to take a lower rate.

[mattfx]

What's the security worth to you? 12 month contracts aren't easy to come by (unless via extension) and that has value in itself.

Can you afford to go on the bench if you get dumped?

In my mind, these are the two very important questions you need to ask yourself. If the answer to both is "Very valuable and no i cannot afford" then you've answered your question about pitching the raise.

[northernladuk]

I wouldn't get too hung up on what it was advertised at though. I've seen the same gig advertised at 3 or 4 different rates by agents. It could be they've inflated it to try attract better candidates, have clients that will pay what they think the contractor is worth, not a fixed rate etc. Best thing to do is keep an eye on any paperwork on the printer or around the hiring managers desk and see if you can find out what the client is paying the agent.

[northernladuk]

It's highly unlikely they will bin you for asking. The problem you have is that agents do this day in day out. They know the hold the cards and are used to dealing with newbies. Would you give up money in your pocket if someone 'asks' you to? You've got to be a little firmer than that. If the agent has been pulling your pants down up to now he might relent a little quicker but you got to appear serious as you are entering in to a negotiation. If he sniffs a push over they will just walk all over you.

First thing to ask any agent is if they are on a fixed margin and get it in writing. If they are then they won't bend. If they are on whatever then can negotiate then they should give you something. They've made the money they expected to and now it's just free cash.

You don't have to threaten them or anything, just negotiate... But you have to sound serious about it.

[snew]

Is there a real risk of being Binned?

Hi All,
I am in a very similar situation. My first contract (6 months) I took for £50/day less than it was advertised for as I was keen to secure the role. Today they have offered me a 12 month extension.

I intended to negotiate a rise to the day rate that the job was originally advertised at as I have shown that I can do the job. Surely the worst they would say is 'take it or leave it' rather than revoke the offer of an extension?

I am new to contracting so maybe there is some business etiquette here that I am missing?

any advice would be much appreciated!

[snew]

Is being 'binned' really a risk?

Hi There,

I am in almost exactly the same situation. This is my first contract (6 months) and they have offered me a 12 month extension.
The job advert was for £50/day more than I am getting, I went in low in an effort to secure the role. I had planned to negotiate an extension, mentioning the fact that I have proven that I can do the job (hence the offer), so I should be paid the rate that the job was advertised for.

Contracting is a new world to me so should I really worry about being 'binned' by the agency?
I assumed there would be almost no chance of this, surely if they want to renew then you are valuable to them and it's in their interest to negotiate. And even if they don't think I am worth that day rate, why would they terminate the contract rather than saying take it o leave it?

I would have no problem extending if I didn't get the rise, but I can't see any issue with asking.

Thanks

[Camels]

Back in my permie world, one of my our contractors wanted an increase in their day rate.

We eventually decided on giving the agency an £n rise, with the agency then taking a smaller cut.

Result being the contractor got his increase through a mixture of a lower agency % and a slightly larger day rate. Everything is negotiable.

I have done similar in my own permie days - we wanted one of our contractors to get a rise, which I secured budget for, but agreed with agency that the extra would all go to the contractor rather than the agency getting a raise themselves thereby cutting in to the contractor's rate.

Agency were happy enough to oblige in order to stay in our good books and avoid contractor leaving in search of a better rate elsewhere, esp. as they still got the same amount in cash terms despite the % dropping.

[l35kee]

Back in my permie world, one of my our contractors wanted an increase in their day rate.

We eventually decided on giving the agency an £n rise, with the agency then taking a smaller cut.

Result being the contractor got his increase through a mixture of a lower agency % and a slightly larger day rate. Everything is negotiable.

[SueEllen]

Most clients don't care what the agency % is. They see a contractor and the rate they pay an agency for that contractor.
A few clients set a % rate for agents.
In my limited experience (only going back to the 1990s), I have never worked for a client who set the agent's %.
...but my clients have all been private sector large manufacturing/construction/medical businesses, so I may not know the field you are in.

It is more of a newer thing for clients to insist on the margins for contractors. I've also found some clients insist that contractors are paid within a certain time frame.

These additional things are often added in if the client has had issues with agencies in the past e.g. they have had contractors down tools.

My clients who have done this have been in the private sector - consulting, finance and defence - and government sector. The private sector where large and medium sized enterprises.

[WTFH]

Contract Renewal - what to do?

Most clients could and should use their own HR departments and save some £. Most clients chuck some kind of job spec at the agency, they don't approach them for advice IMO.

MOST clients HR departments are clueless at best. When it comes to finding a toilet cleaner, they might be able to advertise and interview themselves, but if you're talking about IT jobs, they are useless - they either advertise directly in the wrong media, or go to their preferred agent for HR staff. Only to discover said agent has no idea about IT either.

The benefits a "good" agent provides for a client is that they should understand the role, have an existing list of contractors who can fulfill that role without needing to advertise it, and if they must advertise, they know where to advertise. They also know the kind of rates that the role commands. If the client HR says £100 a day, the agent might explain that the normal rate for that level is £400, but you could get a junior for £200.

(Edit: I can't believe I am standing up for agents, but they have their uses!)

[WTFH]

Contract Renewal - what to do?

Most clients don't care what the agency % is. They see a contractor and the rate they pay an agency for that contractor.
A few clients set a % rate for agents.
In my limited experience (only going back to the 1990s), I have never worked for a client who set the agent's %.
...but my clients have all been private sector large manufacturing/construction/medical businesses, so I may not know the field you are in.

[radish2008]

Really? I doubt that happens often. The agency/agent is providing a fairly simple service to client. The client needs x work done, the agency by suddenly pulling you away from client or trying to get you removed for their own reasons (not of benefit to client) is counter that.
I'm fairly sure most clients, if they get the feeling they're taking the p*** with their commission or trying to get a good contractor taken out of client site for their own reasons, most clients would go ape**** at the agency. There's nothing special about the service agencies provide for us or to clients, it's just like temping IMO.
Recently a contractor told client his agency were delaying payments.....agency were removed from preferred supplier and contractor was able to contract directly with client co as agency were in breach of their contract with client co.
Don't think any agency should have grand ideas about what they provide to clients, they're really just middle-men, pimps . Most clients could and should use their own HR departments and save some £. Most clients chuck some kind of job spec at the agency, they don't approach them for advice IMO.


Some clients work on flat rate with agency, gives complete transparency. Agency finds a contractor and they get 10% commission so it's not always the agency taking a cut of the money on offer. At least 2 of my last 4 contracts have been with the agency having a 10% commission.

I said it could happen.

You say 'Most clients' quite a lot. You also, unless you've seen their contract, have no idea what the agency cut is - only what they tell you it is.

[SuperZ]

I think the lesson for the OP here is not to get hung up on what the agency gets. It will lead nowhere. I once worked a contract where the agency cut was 20% I tried to squeeze them and they just said no. If you're happy with the rate you're on then be happy.

Don't forget the agency can pull you with the client or just work to have you replaced if you kick up an unreasonable fuss. And your irreplaceable, niche skills are unlikely to be that rare.

Really? I doubt that happens often. The agency/agent is providing a fairly simple service to client. The client needs x work done, the agency by suddenly pulling you away from client or trying to get you removed for their own reasons (not of benefit to client) is counter that.
I'm fairly sure most clients, if they get the feeling they're taking the p*** with their commission or trying to get a good contractor taken out of client site for their own reasons, most clients would go ape**** at the agency. There's nothing special about the service agencies provide for us or to clients, it's just like temping IMO.
Recently a contractor told client his agency were delaying payments.....agency were removed from preferred supplier and contractor was able to contract directly with client co as agency were in breach of their contract with client co.
Don't think any agency should have grand ideas about what they provide to clients, they're really just middle-men, pimps . Most clients could and should use their own HR departments and save some £. Most clients chuck some kind of job spec at the agency, they don't approach them for advice IMO.

25%

It's always a cut of the agency rate never a markup on the contractor rate.

Some clients work on flat rate with agency, gives complete transparency. Agency finds a contractor and they get 10% commission so it's not always the agency taking a cut of the money on offer. At least 2 of my last 4 contracts have been with the agency having a 10% commission.

[No2politics]

He who dares Rodney. My advice would be to stick your CV on jobserve with your new experience. Two reasons. 1) tests the market to see what sort of roles/rates are around. 2) it is likely that your agent will get notified that your CV has been uploaded, thus strengthening your negotiating position.