Reply to: Agency margin increase

[NotAllThere]

That explains why when I first went contracting at £25/hour, the agency markup was 15%, and when I'd gained a new lucrative skill, the markup was 25%...

[The Agents View]

You're putting worse candidates forward, so you need to charge the client more?

I don't know - I've never worked the IT market. But as an example - someone placing office temps at £20 an hour, will generally charge about 33% - maybe a little more. By comparison, placing senior directors on £800 - £1500 per day, we'll charge around 20% - dependant on the relationship with the client. It's not about the margin at the end of the day, it's about the amount of money that is made - clearly placing someone on £1500 per day at 15% isn't bad business if you can get it!!

Hope that clarifies the situation!

TAV

[NotAllThere]

It depends on the market place - I.T can be alot more cut and thrust, with lower morals, lower value candidates, and hence higher margins.

You're putting worse candidates forward, so you need to charge the client more?

[The Agents View]

LOL - "The agents View" - What a fraud - The OP is probably a sockpuppet of this wierd idiot!
Why would anyone want to pretend to be an ethical agent?

It depends on the market place - I.T can be alot more cut and thrust, with lower morals, lower value candidates, and hence higher margins. My market place is small, incestuous, and niche - if I screw someone over like the above, then very quickly my market place shrinks, my candidate pool shrinks, I lose credibility and end up twiddling my thumbs. I work on the basis of treating others as I would wish to be treated - it might sound slushy and wierd, but the reality is, that my Interims recommend the good people that they come across on a daily basis, and let me know when there are opportunities within their clientco's - That only comes from working in partnership with both the client and the interim - it doesn't come from stiffing people at every opportunity.

I'd love this approach to spread to the IT contracting sector, but I'm afraid we are a long way from that given that some of the worst offenders are some of the most heavily backed financially.

Also, the sooner the UK wakes up to the fact that you don't get a quality approach, which represents your business effectively by having a "managed service" in place, the better.

For those who don't know, the MSP offering is a single agency approach, which manages all the lower tier providers, taking a cut of every single placement - This breeds the approach of putting senior staff in place to front things, and little more than college grads in place to talk to candidates. It also breeds the CV bunfight culture, which is what I have to fight against every day.

However, for your peace of mind, I will pretend that I use references for lead gathering, and not for the purposes of backing up my business case to the client - I hope that this makes you feel better

TAV

[BrilloPad]

Yeah, yeah, yeah. So does Santa Claus, the Easter Bunny, the Tooth Fairy and my Aunt Mabel's 18" knob.

You are either deluding yourself, deluding us or in the wrong game and just passing through.

Don't forget you're selling yourself to the slaves and we can tell when you're lying. Your lips move.

But Santa exists and posts on cuk http://forums.contractoruk.com/members/santaclaus.html .....

[BrowneIssue]

We DO exist, you know...

Yeah, yeah, yeah. So does Santa Claus, the Easter Bunny, the Tooth Fairy and my Aunt Mabel's 18" knob.

You are either deluding yourself, deluding us or in the wrong game and just passing through.

Don't forget you're selling yourself to the slaves and we can tell when you're lying. Your lips move.

[BrowneIssue]

troll

Is that a confession?



There's a blip on my blood pressure graph from when I read that original posting.

[P1mpAndPr0ud]

Why would anyone want to pretend to be an ethical agent?

We DO exist, you know...

Having said that, we ARE in the game to make money - that is our function, as salespeople. If I tried this, I'd expect a kick in the nuts from the contractor, the client or both. Stick it to the greedy sod, he gives people like me a bad name...

[DaveB]

I’m fairly new to the contracting world so any advice would be appreciated…

I’ve been contracting at a client site for three months. The client wants to extend my contract for another three months at the same rate, however the agency has told me that they will only continue with the extension if they (the agency) increases their margin by 50%, therefore reducing my day rate.

As you can imagine, I am not a happy bunny.

Has anyone heard of this happening before?

Talk to the client and explain the situation. Tell them you would like to take the extension but unless the agency changes their mind you won't be able to afford to.

Name and shame the agency.

[Archangel]

I’m fairly new to the contracting world so any advice would be appreciated…

I’ve been contracting at a client site for three months. The client wants to extend my contract for another three months at the same rate, however the agency has told me that they will only continue with the extension if they (the agency) increases their margin by 50%, therefore reducing my day rate.

As you can imagine, I am not a happy bunny.

Has anyone heard of this happening before?

troll

[Ivor Bigun]

.......Firstly, that is absolutely insane business sense from the agency.............

......I can understand the agent not negotiating on the margin (ie keeping it the same) as times are tough - revenue maximisation/protection is the name of the game, but that should NEVER be at the expense of the people who are out there doing it for us......

.........Secondly, if they (agency) want to increase their margin, they should be doing it with the client, not by taking money off of you............

..............There may be some scope for getting out of your handcuff clause, at which point, go direct............

...........speak to the end client - tell them what the agency has said,
Hope that helps - good luck........

LOL - "The agents View" - What a fraud - The OP is probably a sockpuppet of this wierd idiot!
Why would anyone want to pretend to be an ethical agent?

[NotAllThere]

I am to mad to even respond to this thread, give me their address i'll send the goons down to tell them not to mess with your wages...

[trsisko]

I am to mad to even respond to this thread, give me their address i'll send the goons down to tell them not to mess with your wages...

[BrilloPad]

Surely they now should be reducing their cut?

Even at a reduced cut they are making easy money : you have the upper hand. I hope you give them a good kicking.

Best of luck and let us know how you get on.

[BrowneIssue]

been contracting ... extend my contract ... increases their margin by 50%, therefore reducing my day rate.

Taking.

The.

Piss.

Unheard of. Utterly outrageous. Worst story I've heard in a long time.

I bet the agent is frequently changing their underpants because they are laughing so much they are wetting themselves at the prospect of pulling this off.

We can safely assume the agent already has a HUGE margin on you and is now just taking the piss.

Talk to the client and tell them what the agent has said to you. Apologise really, really nicely and tell the client you will have to find another contract as it will not be financially viable for you to stay. Also, tell the client what the agent is giving you and watch the client's face.

In 95% of cases, the first extension on a 1st contract should result in a significant %age increase in your rate. Both the client and the agent took a risk on you because many contractors walk away in the first few days of their first contract. To compensate for this risk, the client will be paying a low rate to the agent and the agent will be taking a large margin, quite possibly over 40%. Because you have proved your worth, it is now normal for the client repay you and the agent by increasing the rate, and the agent to reward you by significantly dropping their margin to something more realistic, like 25%.

As you get wiser and more experienced, both the rate will go up and that margin come right down.

If in doubt, just email them this on Monday: "I have posted the question on a number of contractor boards and mailing lists and EVERYONE says you are taking the piss and that you should be rewarding me for loyalty. They are also saying I should 'name and shame' you whatever that means. So I demand at least another 25% to extend this contract." And they will still be quids in even if they agree.

Oo, I'm outraged on your behalf, I really am.