Reply to: How much does an agency charge over the rate

[brianbetter]

Consultancy vs Agency Mark Up

Me again,

A lot of "Consultancies" charge ridiculous mark-ups because they claim that having there organisation and set up behind the contractor adds value. As an agency we are finding more and more clients find this is utter rubbish, the contractor could perform his role quite happily without a consultancy behind him, hell the reason contractors are used is because you are paying for someone to come in and "hit the ground running" and get the job done, therefore our clients are trying to pull guys away from consultancies to run through agencies as the job is still getting done just as well for a more competitive price.

[smiff]

I remember KPMG charging £1500 p.d for one of their Junior consultants. After a few pints he addmitted he was on less than £200 p.d. (permie equiv)

Now thats a mark up

Ouch.

[NickNick]

Ahh, can't quite hit those figures but I do know that a reecnt gig was 500 a day for me, 100 for the agency and then the client charged me out at 1000 to another client who then charged me out at 1500 to the final customer. The end customer thought that this was a cheaper way to operate than using contractors direct.

[Pickle2]

I know mate but life is too short. I remember KPMG charging £1500 p.d for one of their Junior consultants. After a few pints he addmitted he was on less than £200 p.d. (permie equiv)

Now thats a mark up

In my old permie days, employer used to bill me out at 1200/day (aged 24, knowing fook all) and pay me 22k a year. lol. Idiot. Lets just say I was contracting before I hit 25.....

[NotAllThere]

I don't think you can compare a consultancies charge out rate and therefore margin over your rate with that of an agency. Pity really.

I got my current gig precisely because the consultancy charged roughly twice as much as I do for someone with ostensibly the same skills.

[Torran]

You say happy, but that "extra" 25% or so over "normal" percentages they are creaming would bug the hell out of me.

I know mate but life is too short. I remember KPMG charging £1500 p.d for one of their Junior consultants. After a few pints he addmitted he was on less than £200 p.d. (permie equiv)

Now thats a mark up

[malvolio]

Ok, let me rephrase my question.
Initial my contract is for 4 weeks and the client already asked for my business card and they said they will contact me in the future if they need a php developer again. I am guessing they want to bypass the agency. If this is the case, how much do I need to charge them?

Thanks.

OK, better question.

If you were on £250, pitch for £350 (or £42.50 an hour if you expect to work overtime) and see what happens: that's probably not too far away from your original gross cost plus inflation.

[oracleslave]

You say happy, but that "extra" 25% or so over "normal" percentages they are creaming would bug the hell out of me.

I don't think you can compare a consultancies charge out rate and therefore margin over your rate with that of an agency. Pity really.

[smiff]

Mine are on 50%. Through a "consultancy" rather than an agency but still

Happy enough with my rate though

You say happy, but that "extra" 25% or so over "normal" percentages they are creaming would bug the hell out of me.

[Torran]

Mine are on 50%. Through a "consultancy" rather than an agency but still

Happy enough with my rate though

[HYpno27]

It will depend if theyt have any kind of favoured partner deal with the clientco.

If you're sure they want to bypass the agent; next time round ask how much they were paying outright and then undercut it; clientco will be happy

That said, beware of any - "you can't work with this company for 6 months" subclause in your current contract, some agents can get upset and will cause you grief

[brianbetter]

What agencies should be doing

Hi Guys,

Pimp here, won't tell you what company I am from however!

What we do here is find out what rate the contractor is looking for then put our mark up on the top, we do not think it is good business to take anything away from you guys as it leads to bad feeling.

Mark up does vary, for instance I have nearly 400 men with my client so the mark up is only 5% however for companies who take a handful, the mark up does increase. As my mark up us set, I let all my contractors what is being charged for them. This approach leads to a happier working relationship rather than lead to whispering campaigns about the agency "robbing" money from the contractor.

[TheRefactornator]

sheesh, when is your renewal

I'll PM you

[thunderlizard]

they have overheads to cover

Their main overhead, lest we forget, is making about 1000 phone calls for every 1 that results in a placement. Of course that's the last one they'll tell you about.

[HankWangford]

Real Resourcing taking 29% of the gross in my case. This is not a guess.

sheesh, when is your renewal