Reply to: Are recruitment agency fees excessive?

[dsc]

Who gives a tulipe what they get paid? as long as you get paid what you think you should, then all is well. The only issues that might arise from excessive fees is if you get a very high hourly / day rate and the agency adds an extra 30-40% on top, then, depending on the client, you might get chopped really quickly as your "cost" will stick out like a sore thumb on any quarterly budget meeting. Then again this mostly happens when a "contractor" sits in one place for a long period of time, if you are there for 3-6 months I think most clients will simply stomach it, knowing well it's only short term.

If you don't like agencies, then don't use them, go direct, it's pretty simply no?

[Paralytic]

I used your figures!

Going direct didn’t give me ninety day payment terms, but why would I care if it did? Like any contractor I’ve usually got two or three years money kicking around at the back of my sock drawer.

And why would I particularly need extra money passed on to me? I didn’t notice any extra nourishment when the worms died, I was just happier they weren’t there any more.

You're making the mistake that many naive contractors make and think the agent is working for them. The agent is providing a service to the client, and that is what they are paid for. They are not paid to provide a service to you - you are merely a commodity to them.

[hugebrain]

If that's all you think an agent does then it's pointless arguing with you.

Feel free to put some highly inflated numbers from the average to help make your point as well.

Also do you really think that money will passed on to the contractor if an agent wasn't there? A client would pay that much, lose a service and then have to have their people do the work isntead? Not on your nellie. So they take off what the agent skims and you end up with the same in your pocket without all the benefits (which you fail to see) of an agent. Good luck on your 90 day payment terms.

I used your figures!

Going direct didn’t give me ninety day payment terms, but why would I care if it did? Like any contractor I’ve usually got two or three years money kicking around at the back of my sock drawer.

And why would I particularly need extra money passed on to me? I didn’t notice any extra nourishment when the worms died, I was just happier they weren’t there any more.

[northernladuk]

OK let’s use your figure. You work 40 hours a week 160 hours a month for say 15000.

The agent does maybe half an hour of admin and makes 1500.

So she’s making 32 times your hourly rate, with no particular skills or education or hard work.

Now perhaps you can see why I think it’s excessive.

If that's all you think an agent does then it's pointless arguing with you.

Feel free to put some highly inflated numbers from the average to help make your point as well.

Also do you really think that money will passed on to the contractor if an agent wasn't there? A client would pay that much, lose a service and then have to have their people do the work isntead? Not on your nellie. So they take off what the agent skims and you end up with the same in your pocket without all the benefits (which you fail to see) of an agent. Good luck on your 90 day payment terms.

[hugebrain]

But that's a very sweeping statement. Sometimes, in pretty unique cases it is. The vast majority of contracts are on fixed commission which can be 10% or under.

OK let’s use your figure. You work 40 hours a week 160 hours a month for say 15000.

The agent does maybe half an hour of admin and makes 1500.

So she’s making 32 times your hourly rate, with no particular skills or education or hard work.

Now perhaps you can see why I think it’s excessive.

[northernladuk]

The point is that their fees are excessive, they are unnecessary and often corrupt. If all agents died tomorrow, the world would be a better place (not picking on recruitment agents, estate and secret too).

But that's a very sweeping statement. Sometimes, in pretty unique cases it is. The vast majority of contracts are on fixed commission which can be 10% or under. It's also scaleable by number of contractors on site etc. If an agent has 1 contractor on site they've got to make up all the money from advertising and placing as well as ongoing costs from one contractors. If they've got 100's then is scalable.

So your statement is ill informed and very general and the second sentence just proves you've got a hell of a bias to it so not really a useful statement.,

They are like intestinal worms, taking a bit of your stuff, you barely notice them. Then you take the Ivermectin and the wriggly little scumbags are all dead. You will feel better so much better afterwards, just knowing they are gone.

Utter tulipe. If you can take your head out of your agent hating backsite you might see some upsides. You've make a lot of money contracting and probably had a pretty easy ride of it I guess. You've also been paid weekly or monthly for all that time and not had to suffer 90 days plus that many B2B contracts are on and so on. You're too blinkered to make any reasonable argument worth discussing.

As for more risk, I don’t think so. If you go through an agent you are doubling your risk of not being paid (since you now have two organisations that can screw with you) arguably more than doubling since recruitment agencies are typically more sketchy than clients.

Possibly but that risk is very low and will only materialise in very rare issues. If we did away with agents and you were on 90+days direct payment terms I would bet every penny I have that the money contractors have lost of the last 10 years would be much much higher without agents than with them. You can down tools in 7 days if you don't get paid and lose a week rather than three months.

Any other contractors ready to admit they are not happy being constantly ripped off? Even the deluded ones that think the agents provide them with some sort of service - do you think they really deserve 50 times your hourly rate?

I don't think it's everyone else that's deluded. The last comment alone means it's just not worth discussing it with you. You've made your mind up and will just make your self more miserable while continuing to do what we all do and make a good bit of money from it.

[hugebrain]

Indeed. It's a model that's worked for decades with happy clients, agents and contractors so it works to a greater extent.

…

And that is the difference I mean. More risk so greater pay compared to a bum on seat gig via an agency hence you deserve a better rate. And yes I think you are right with the rest of it but again, talking personally, it's not that I can't cope with it, I just don't need to. Agency work has done me well so far so just don't need to.

The point is that their fees are excessive, they are unnecessary and often corrupt. If all agents died tomorrow, the world would be a better place (not picking on recruitment agents, estate and secret too).

They are like intestinal worms, taking a bit of your stuff, you barely notice them. Then you take the Ivermectin and the wriggly little scumbags are all dead. You will feel better so much better afterwards, just knowing they are gone.

As for more risk, I don’t think so. If you go through an agent you are doubling your risk of not being paid (since you now have two organisations that can screw with you) arguably more than doubling since recruitment agencies are typically more sketchy than clients.

Any other contractors ready to admit they are not happy being constantly ripped off? Even the deluded ones that think the agents provide them with some sort of service - do you think they really deserve 50 times your hourly rate?

[northernladuk]

Many clients don't want to engage individual contractors - more bureaucracy and paperwork for them, especially at larger organisations with many contractors. Clients also want to keep more of an arms length relationship.

Indeed. It's a model that's worked for decades with happy clients, agents and contractors so it works to a greater extent.

The opposite side of the coin is that many contractors are either too lazy or incapable of sourcing direct work, producing statements of work and contracts etc.

A bit harse that. I've never sourced direct work and have zero intention to do so. I'm nethier lazy, nor incabable, I just don't need to and am very happy with the status quo. I don't see any benefits to go get direct and the system works for me. Could I have got more money, could I have had better working relationships with an agent? Who knows but ive done well out of it so just no need.

If it was so easy to go direct, everyone on this forum would be doing it and getting a 10-20% pay rise. But it's not.

And that is a common misconception. I don't think it's gauranteed to get that rise. The rate card has the cost of the agent included. It saves them time and money so they pay a bit more for it. If they took it in house then they'd be dropping the rate by teh commission and paying that direct. Thinking you are going to pocket the agencies commission is not a safe assumption IMO. Yes I am sure some contractors direct have a better rate but that could also be the engagement method. Clients go direct for proper sluppliers but via agencies for bums on seats. The direct people could be delivering differently, different skills/approach etc. I don't think it's a true like for like comparison where you can conclude the contractor is getting more just because the agent has been dropped.

For my current direct client I ended up starting work three weeks later than planned due to time taken to draw up and negotiate the contract, carry out supplier due diligence, agree the statements of work after about five rewrites and so on. So I had no work for three weeks. Plus I'm having to bill one month in arrears with 30 day payment terms so had to wait two months till my first payment. Not all contractors can cope with that.

And that is the difference I mean. More risk so greater pay compared to a bum on seat gig via an agency hence you deserve a better rate. And yes I think you are right with the rest of it but again, talking personally, it's not that I can't cope with it, I just don't need to. Agency work has done me well so far so just don't need to.

[edison]

Yes they are excessive and completely wrong on every level. It’s marvelous each time you go direct and a joy that you don’t have some worthless parasite taking away the fruits of your labour.

I don’t know why so many contractors can’t accept this simple truth.

Many clients don't want to engage individual contractors - more bureaucracy and paperwork for them, especially at larger organisations with many contractors. Clients also want to keep more of an arms length relationship.

The opposite side of the coin is that many contractors are either too lazy or incapable of sourcing direct work, producing statements of work and contracts etc.

If it was so easy to go direct, everyone on this forum would be doing it and getting a 10-20% pay rise. But it's not.

For my current direct client I ended up starting work three weeks later than planned due to time taken to draw up and negotiate the contract, carry out supplier due diligence, agree the statements of work after about five rewrites and so on. So I had no work for three weeks. Plus I'm having to bill one month in arrears with 30 day payment terms so had to wait two months till my first payment. Not all contractors can cope with that.

[hugebrain]

Yes they are excessive and completely wrong on every level. It’s marvelous each time you go direct and a joy that you don’t have some worthless parasite taking away the fruits of your labour.

I don’t know why so many contractors can’t accept this simple truth.

[northernladuk]

OMG Why isn't NLUK saying anything?

What's to say? He did 2two years which clearly put him inside and inside he went so that's all OK. If you mean about his two years he thinks were outside now being deemed inside and he's liable for retro investigation? He says he's been there five years. The first two of which were outside so that was over three years ago he went inside. Ancient history now so not worth bringing up.

[Eirikur]

I started out 2 years outside doing a project, then switched to inside and since then been inside.
.

OMG Why isn't NLUK saying anything?

[lecyclist]

The recruitment market is exactly that - a market, with buyers (hundreds or even thousands of agencies) and sellers (many thousands of contractors.)

Agree. And the stock market metaphor of a whale buying or dumping large quantities of shares is also applicable here. Most of us will have experienced regional rate fluctuations when a large corp. demands 100 contractors for a major programme of work and pays above the average rate. A new temporary price support level is introduced. This can work against contractors also - if the client has 100 generic programmers on the same rate, no one is getting an increase. And it would be likely in this case that the client's rate strongly influences the support level/ and rate ceiling in that sector / geographic region.

[edison]

Hasn’t somebody said it already?
It really doesn’t matter what the agent gets, what matters is that you get what you think you are worth.
If you’re not happy just move or find a way to go direct.
Also check the market to find out the rate range for your skills.

The recruitment market is exactly that - a market, with buyers (hundreds or even thousands of agencies) and sellers (many thousands of contractors.) It's a very price driven market and whilst pricing to contractors isn't always transparent, there's enough info and data out there for contractors to be informed and make appropriate choices.

I was chatting to a recruiter over xmas drinks recently and he said his previous firm had doubled their commission rate from 15% to 30% for contractors in 2021. It's a slightly different model as that particular firm tends to supply small teams of very experienced contractors (associates) as part of consulting assignments where day rates are around £900-£1200 typically. I know several contractors who work for this recruiter and none are complaining about their pay or the margin.

[CheeseSlice]

Hasn’t somebody said it already?
It really doesn’t matter what the agent gets, what matters is that you get what you think you are worth.
If you’re not happy just move or find a way to go direct.
Also check the market to find out the rate range for your skills.