Reply to: Switching agency?? :o

[tim123]

God Tim, you must be agencies best dreams come true...someone who would put up with anything they throw at you because you think you are a business
Mailman

You seem to have come to this conclusion all on you own here.

The point that I made is a that a non compete clause is generally a standard clause in any B2B relationship. Accepting this as a normal practice, does not enable you to draw any conclusion as to what other clauses I might, or might not agree to.

tim

[Mailman]

I don't see how such a requirement is a restraint of trade, you want to do business with the customer, you continue to pay the guy who found you the customer. What's the problem?

tim

God Tim, you must be agencies best dreams come true...someone who would put up with anything they throw at you because you think you are a business

You don't like the clause, negotiate it away or don't use that person to find you customers (and find them yourself). You've got a free choice, I don't see how it can be described as nonsense!

Unfortunately unless you are a highly experienced "professional" or in an area where there is very little competition and you are "da bomb" in that area then statements like this is simply a joke.

As with all business transactions my sole interest is in maximising my profits (be that through the reduction in my tax exposure or the elemination of unneccesary costs, like agency fees). Im not there to please agents, Im there to make money for myself

Think of it this way, as soon as you are worth nothing to agents they have no problems in dropping you like a lead ballon. The same then applies to them, as soon as they have outlived their usefulness to me I make moves to sideline them.

Having said that when I have enjoyed working with agents (like my current one from MSB) I have thrown extra business their way (when I have choice of who I have to use for a contract). So Im not a completely heartless tramp

Mailman

[rootsnall]

Its the contractor that opts in or out of the regs, not the client. Thats the whole idea of the regs to prevent this situation happening and porr little contractors being exploited. If you opt in to the regs then there can be no restrictive clauses in the agency/client agreement over and above those stated in the regs. I think it limits the going direct exclusion period to 8/14(?) weeks and also states that there should be an extended period of hire offered in the contract of 8/14(?) weeks, not the 1 year stuff that appears in most standard opt out contracts.

[DeanM]

What your forgetting is that the agent has a contract with the client and the client would not only have a restrictive covenant in their contract but they would have also opted out of the DTI regs. This means that the client cannot hire the contractor direct even if the contractor wants to, not that the contractor can't go to the client direct.

[rootsnall]

I'm also happy(ish) with 20% if they've found me a contract I wouldn't otherwise of come across. It still grates a bit when I'm 18 months in and they are still getting 20% of every invoice but this is down to the client in this case as they could manage the agent out of the picture for zero cost over a 3 month renewal but so far haven't despite my best efforts to convince them. There is lots of talk of going direct by some contractors here but I've found this more and more difficult especially with bigger clients who like having an agent in the picture for various reasons.

[tim123]

If my rate isn't the best and I suspect they are taking a big chunk I wait until the contract is in the bag ( the later in the process the better ) and the agent is thinking about his bonus and then ask them with tact in the first instance to confirm they are on 20% or less and could they put it in an email please.

This is what I did on the next but one job where I was also beaten down on the rate, and ever since then I haven't needed the job enough to compromise, so I just waited until I got what I asked for.

But, TBH I find it hard to understand why an agent thinks it OK to compromise a relationship (and not necessarily the one with me) for 2 pound an hour. I'm not unreasonable on margins (as I think I have shown already in this thread). If an agent is open and honest, and want's 20%, he can have 20%, it's when he says he's on 20% and takes 28% that I have a problem.

tim

[rootsnall]

If my rate isn't the best and I suspect they are taking a big chunk I wait until the contract is in the bag ( the later in the process the better ) and the agent is thinking about his bonus and then ask them with tact in the first instance to confirm they are on 20% or less and could they put it in an email please.

[tim123]

Well Dodgy, personal experience is that more than once I've not got the rate that I asked for because I was told that the client 'couldn't afford me' and I compromised only to find later that the agent had taken their margin into the unacceptable level.

I don't fall for this trick anymore, but that's because I don't feel that I actually need the work, if I did, I probably would.

FWIW, outside of working as a contractor I've had people complain about my 'negotiating' because I don't compromise without unreasonably complaining. I.e I don't play the game of "I want X+20%" (where the 20% isn't always money) so that I can take the 20% off, I've already built my compromises into my original request. Why should I get stuffed for this?

tim

[Reccon]

%

However, they would probably cut my rate down too, but i am already on a VERY low rate, purely because the agency is taking 20% of client's pay, and leaving 80% to me...is that a big margin?

Still makes me laugh every time - the agency is not taking 20% and leaving you 80%. You are getting the rate you accepted and they are charging 20% more!

[tim123]

As for the concept of dropping an agent and going direct or to another agent, well I can safely say I'm glad I don't do business with you, its called professional courtesy and its that sentiment that leads to repeat business.

What do you think the next agency/direct client will be thinking at the back of their heads if you do this.

To be fair, I think the poster sees himself as stuck between a rock an a hard place.

He has a client that he want's to show some loyalty to and an agent that he thinks is stopping him from providing that loyalty, by insisting on too large a margin.

But, whilst it is clear that an agent ought to reduce their margin for a contractor who finds himself a new position at the same client, as you say, there really are good business reasons why this isn't going to go much below 15% and this difference isn't goining to be a make or break amount for a known resource. If this client really is paying a low rate, they are going to struggle to get any qualified person for the money so passing up a know person for a few percent more is silly IMHO.

ISTM that one of the following is the case:
1) Someone has lied about the margin and it isn't 20%.
2) The posters perception of 'low' is different to mine. A normal rate is: if permi job that you are doing pays Xk pa, contract rate should be X pounds per hour, so if contract rate is less than X, it is low. This is not the same as "it is low because it is a job 3 steps below the one that I am qualified to do".
3) The client is TTP big time.

I've aleady stated which I think it is and that is, the loyalty to the client is missplaced, he isn't showing any back.

Tim

[boredsenseless]

Something doesn't add up here...

They see you as a great asset --> but they then turn round and devalue their asset by basically saying you charge too much for the work delivered.

Lets be honest 20% whilst not low isn't really high when you consider what agents have to pay for...

1. Their salaries
2. Their offices
3. Their phone bills - and boy can they rack them up
4. Dodgy shiny suits
5. Entertainment
6. Insurances
7. Factoring

If an agent is charging less then about 15% then either they have got the client tied into using them only, they aren't telling the truth or I'd be worried that if one client defaults on paying the whole stack of cards would come tumbling down and I and probably many others would be out of work.

I generally don't use agents in fact in 4 1/2 years I never have, and I can catergorically state that the cost of finding your own contracts and the extra time that takes (phoning, contract negotiations, failed bids) amount to well over a 20% if you actually look at how much your 'lost' time is worth.

Most professional services companies expect their revenue generation employees - sales, pre-sales, principle consultants - to be doing either non-charge or bid work that ultimatley does not lead to a contract for at least a third of their time, so 20% seems like a bonus to me!

The only way you will ever get agents to charge less is to stop using them, the drop in income will force them to become more competitive, whinging will never achieve the same.

As for the concept of dropping an agent and going direct or to another agent, well I can safely say I'm glad I don't do business with you, its called professional courtesy and its that sentiment that leads to repeat business.

What do you think the next agency/direct client will be thinking at the back of their heads if you do this.

1. Here is a really decent guy who is good at his job whose agent gave him a raw deal?

or

2. Here is someone its not worth building a relationship or trust with as he will just F*** off whenever he sees a way to screw us.

[BlasterBates]

Well when I say pay, I meant a lump sum compensation, to forego a contract, if that situation arose

I did have this contractual clause and it did actually satisfy the German equivalent of IR35, so...

Anti-competitive clasues and agreed levels of compensation are quite normal between "real" businesses.

[malvolio]

Normally if they want you to sit on the bench, they should be paying you, they can´t have it both ways, sit on the bench, and replace you with someonelse (for example). As soon as the agency can´t offer you work, I would see them in breach of contract

Let me guess, BB, you're not worried about IR35? Ever heard of Mutuality of Obligation?

Anyway, you are basically right, the agency should either do something to protect their revenue stream, even at a reduced level, or walk away completely. It is seriously unfair of them to fail to agree new terms with their client, and expect you to suffer as a result. But hey, this is business - it has little to do with "fair"...

Also, the very fact the agency is being so uncooperative leads me to think perhaps it's the end client that's the problem, the agency just want out, they don't care about collateral damage or repeat business but they do want their money. Personally I'd walk away from the whole mess.

[BlasterBates]

...hmm I see this as actually grey. Legally you should give your agency first shot, if they fail to secure you a contract, I don´t think they can stop you working, for the same client. I think this is known as uncompetitive behaviour, in other words what you can´t do is switch agencies if your agency is offering to extend your contract, but if they are not then, they can´t expect you to sit on the bench.

Normally if they want you to sit on the bench, they should be paying you, they can´t have it both ways, sit on the bench, and replace you with someonelse (for example). As soon as the agency can´t offer you work, I would see them in breach of contract. The contracts that stipulate that you can´t work for six months after the termination of the contract are perhaps illegal if there is no compensation involved, but that is my suspicion.

[insight14]

Good reasons like having an income perhaps. Cheapskate clients don't deserve to have people work for them (well yeah obviously it's impossible to pay both the worker and the agent), sounds like the agency are the problem here, not the client.

And yet clients up and down the country DO pay both the worker and the agency - thus its not impossible. What is you point here George?

And why do you think the agent is the problem here? Why should it be the agent who cuts their (already reasonable) % in half when neither the client nor the contractor is willing to negotiate on their rate?

And yes, I'm a contractor too.