Reply to: Negotiating Rate Rises

[malvolio]

One other thing...

The agency is not doing nothing. They are carrying the bad debt between you getting paid weekly/monthly and them getting paid 90-days or more after invoicing. With 100 averagely paid contractors on your books, you're carrying roughly £2.1m liability per month. Even at today's low interest rates, that is a significant overhead.

They may all be lying scumbags , but they do actually add value to your end of the food chain.

[t0bytoo]

Has anyone out there ever threatened to finish a contract and re-sign with another agency at a higher rate? Can this approach work? Has anyone actually done this?

You generally can't sign a contract with a different agent for the same client. But I have no trouble telling an agent that someone else is offering me a better rate.

No scruples in this game.

[tesla]

All,

Many thanks for all of your replies.

I am sure the agency in my case is getting more than 30%

I understand what many of you say about not getting hung up about it, but if I were to be renewed time after time, it would sure begin to annoy me knowing the agency were getting such a big cut for doing practically zero.

I think I will take the approach mentioned earlier. I will wait until I know they want to renew me and then say "I'd like to, but ... I want a bigger slice of the pie ... etc, etc" (not those exact words!!).

Has anyone out there ever threatened to finish a contract and re-sign with another agency at a higher rate? Can this approach work? Has anyone actually done this?

Regards

[rootsnall]

I'd say 20% margin is fairly normal if an agency is just doing one off contracts with a client, if they are the preferred supplier and/or doing repeat work on a site they should probably be on less but the client may need to get involved to drive the margin down. Most can't be bothered getting involved and its up[ to you to fight your own corner !

I don't think you can expect rate rises on renewal. Only if the market has swung noticeably your way, your initial rate is a bit ropey, or possibly you can't stand the job would I bother pushing it.

[t0bytoo]

Is 20% an excessive rate these days?

Damn. I got a massive rise and I'm *still* getting skanked.

(see earlier thread: agent takes 33%)

[malvolio]

Any thoughts? Yes, several, but if it's CP then you're stuffed since they don't do negotiation. Best to hope for is a 2% lift after a load of guff about group margins and team performance criteria and the like, referrals to line management and d accounts and they make you think they're doing you the favour. And 20% is over the top by any standards these days - what the hell value do their clients think they add, compared to anyone else, that would justify it, I wonder?

[t0bytoo]

This agent sounds like a lying scumbag. Surprise, surprise.

I second the previously mentioned 'hardball' approcach. Ask for the rate that everyone else is on. And tell them if you don't get it, you will walk. That there are 'other opportunities' out there for you.

As a contractor, you should be flexible enough to take a few weeks off until a decent job comes up/

[Bumboclot]

I'm contracting for Computer People (everyone's favourite!) and have found out that they are taking 20% cut of the charge to the client.

I should get a renewal at the end of the contract, but was wondering how much of the margin I should eat into. Perhaps I should forget the margin, set a figure and let the agent and client sort it out amongst them.

Any thoughts?

[rootsnall]

I'd find out your margin asap, if the agent is taking a bigger cut from you than your contemparies and thats why your rate is lower then you are in a good position to get your rise out of the agent. Can the agent replace you at the same rate ? Is the agent the sole supplier ? Whatever the figures you have to be prepared to play hard ball and convince the agent you will walk if they don't pay you more. Just asking isn't normally enough. Are you prepared to do this and have to sweat on things ? Can you get another contract elsewhere at the rate you are after ?

[n5gooner]

so what sort of % do people look for on a rate rise, or is it more an extra £5 - £10 ph ?

[Rebecca Loos]

what I would add as well is that it depends a lot on your negociating skills - a bit like when you are shopping in a middle-estern country, you bargain and haggle a lot!

If you are likely to be renewed, then it means the client likes you. That puts YOU in a strong negociating position. Talk to your agent and say that you wouldn't mind staying but you have been offered much more money elsewhere. So you'd be happy to stay but you don't want to lose out too much financially and therefore you will only stay if you get a bit of a rise. It usually works with agents, in fact all my rate rises have been achieved like that, and I just got one like that last week. If they feel you are serious and they might lose a contractor on site, they will be that little bit more accomodating, especially if they are making a lot of money out of you as it is.
You got nothing to lose, even if they call your bluff, stay at the same rate, they won't hate you for it, it's a kind of game and everybody plays it, nothing personal etc.

Good luck

[thunderlizard]

"have spoke to the employer" - hey people, less of the E-word please! Customer/Client if you don't mind!

First the basics - usually the agency doesn't want you or the customer to know what their margin is, because as long as they are the only party who know all the facts, they have more negotiating power. But most of them are sensible enough to accept that if either you or the customer want to find out the margin, you will be able to. 9 times out of 10 the customer will be happy to play "you show me yours, I'll show you mine" .

Unless the margin's really massive (say 50%) don't worry about it too much. Presumably you signed the contract of your own free will (Matthew 20 & all that).
You say you went in at the lower end of the rate range - which is no bad thing if it gets you the job - so yes it's likely that the agent is pocketing most of the difference.

Furthermore, call me cynical but what I suspect is happening in your case is:
(1)the agency has passed on your request for a rate rise to the customer.
(2)the customer has agreed and started paying the agency more
(3)the agency hasn't told you and is still paying you the same.

So I suspect the margin could be sizeable in your case - which is blessing because it means there could be more cash in the system than you thought.

Get out of the employee frame of mind, where you politely ask for a pay rise and the employer decides. Think more like a shopkeeper - put the price up and tell the customers when you're going to do it. Of course for this to work, you need to be confident about your prices, and be happy about your current customer not renewing.

If you're going to raise your price, it's always best to get the customer on side first, even if you don't actually name the figure with them.

Good luck though,

tl

[SandyDown]

Either way, do not get cut up about what you get or what other people get.

This may be the best advice anyone can give (which is really really rare on this board btw..) yes don't worry about what others get paid, negotiate your rate, if you fail to get the raise, either be happy with what you get, go on with the work as usual, or find another contract and just move on........

[malvolio]

In a word, no. What you get is betwen you and the agency, what they get is between them and their client (emphasis on 'their' in this context). If you start to worry about the difference you will only be creating grief - the attitude is to get paid what you want and not worry about the rest of the food chain.

That said, most of us work out what the margin is, and many agencies will actually be open about it if you ask them. At renewal, they won't get more from the client (Why should they? It's not a reward scheme or anything), so all you can do is ask for a larger slice of the margin on the basis that their hard work has been done in setting up the original contract.

You may get lucky, usually you won't. If the money is important, go look for a new contract. Either way, do not get cut up about what you get or what other people get.

[tesla]

Normally, do agencies discuss their margins with contractors?

Do I have a right to know what they charge the employer for me?

Regards