Reply to: Direct Contracting

[Iveco]

Well thanks for all of your feedback.

We've now moved ahead with the idea and the new website can be found at Contract Recruitment, with a flat fee of £2000 (or £500 a month for short term contracts).

We're already getting enquiries so fingers crossed.

Any further thoughts appreciated.

Thanks again

[saptastic]

seen it also here at this IT Recruitment agency. exactly what you are saying I think - direct contracting and less agency fees.

[Not So Wise]

Nice to see some thinking out the box by agencies but few comments

* You don't make it clear if you intend to offer this at contract start or at any point during the contract. If it's only at contract start don't expect a very large uptake as contractor/client don't "know" each other well enough yet to merit risk of such an outlay, besides if they (client) were going to do this at contract start might as well advertise the position themselves from start and save themselves even more money

* "Buy out" option should be offered to both sides, thus he who takes the risk can either save money (client) or make more (contractor)

* £1000 is too cheap in most cases I would say, better to work on some type of ratio, aka your margin for 3 months + 10% = buy out cost. (you need to make your money as well...god never thought i would say that to an agency)

* Before buyout occurs all parties must agree and existing contract T&C's would need to be revealed (seen contracts between client/agency that are not only different than the one between contractor/agency but actually contradictory), without some serious negotiation the party not performing the buy out would not want their T&C's changed

[Board Game Geek]

I know of an agency that don't charge "rake off" if their contractors are offered perm with the client.

[saptastic]

I think it is worthwhile defo - however I have come across this before and I have been told by the employer that they will only invoice the agency and deal with the agency and the contractor needs to invoice the agency. So you may have a whilst convincing big clients - but more luck with smaller employers.

[EchoSierra]

Sounds like an introduction fee which from a contractor point of view sounds good but it depends on whether companies will go for it. I suspect they will since if they find a good contractor it will be a good saving for them if they keep the contractor on long-term.

[LittlestHobbo]

I don't know how much interest you'd get from the clients over this.

They use you for convenience and I think it would add an overhead to their payrole and legal departments, probably more than what they'd be saving.

Having just had a direct client go bust on me, owing me quite alot of cash I'd be wary unless is was a large corporate company and to be honest they are probably the ones that wouldn't go for this.

Mind you an agency has just as much chance of going bust I guess, so who knows, give it a whack.

By the way, I did a credit check and looked into my clients accounts before i signed up with them and they still went bust so don't believe everything you read.

Also going direct you have to be prepared to be indispute with the client, (I haven't been but it could happen) which would more that likely result in them with holding payment if they could, and then possibly an expensive long legal battle to get paid.

As long as agents don't whack on stupid margins I have no probs with the current system, everyone is entitled to make a living and i wouldn't like to do their job.

[Sockpuppet]

My feeling is that if there is buy in from the end user, then there can be a very quick turnaround. Everyone knows an advert on JobServe, search your internal database, interview the candidates and you can have 2/3 candidates across within an hour or two.

I'd anticipate placing 25 / 30 placements a quarter if there is real buy in from the end user. No need to waste times "banging the phones" and hence more time to concentrate on placing candidates.

Try it. What you got to lose.

[Iveco]

Thanks for all your thoughts.

With regards to your question JoJoGabor and indeed some others, if you were to work through an umbrella company you would still be paid on time as the Umbrella Company will have done the credit check and will pay you even if they haven't.

Dodgy agent - priceless, thank you for those pearls of wisdom.

My feeling is that if there is buy in from the end user, then there can be a very quick turnaround. Everyone knows an advert on JobServe, search your internal database, interview the candidates and you can have 2/3 candidates across within an hour or two.

I'd anticipate placing 25 / 30 placements a quarter if there is real buy in from the end user. No need to waste times "banging the phones" and hence more time to concentrate on placing candidates.

[JoJoGabor]

Its a great idea from my persepctive, however the other thing to consider is that some more disorganised ContractorCo's could not stay afloat on the clientCos payment terms. Correct me if I'm wrong but I think the agency only gets paid at the end of the contract, so the contractorCo could have to wait for 3 months before getting a penny. I would be happy to live with this, but it could stretch some ContractorCos financially.

There should be no issues with "putting Contractors on the client books" as it will simply be a B2B contract between ClientCo and ContractorCo, the same as a traditional B2B contract between ClientCo and Agency

[DodgyAgent]

with a name like Iveco, shouldnt you be placing truck drivers? it is all very well contractors bleating that agents should only be paid for the work that they do with regards to their individual contract, but who pays the agent for the work that they do that does not yield any income? (scotspine I am surprised at you). If you want it both ways then say so please. It is an inconvenient truth that most of the time spent by agents on placing contractors yields no revenue.

As for your silly "cheap as chips" idea, then this is fine as long as you work from home and have a mortgage on Northern council flat, but really whatever price you think that you can charge the bottom line is that you need to blag some references and get on the phone.

If you bang the phones and stir your networks you wont need to charge peanuts as clients and contractors will be more bothered by how you service them than doing business at nickel and dime fees.

[pmeswani]

Sounds interesting. However, I am unsure how it will work from under the bonet. I will be interested to see how this will work.

[thunderlizard]

I think it's a good idea, though I think if you stuck to charging £1000 you wouldn't make very much and £5000 would be more realistic - & even that's assuming a "one man band".

[oraclesmith]

I think it would work OK in certain circumstances. With larger clients who hire multiple contractors it would be a pain for them to (a) inspect each contractors contract T&C's to make sure they aren't being taken for a ride and (b) handle one invoice per week/month per contractor.

But for IT end users such as SME's, local authorities, charities etc who don't employ contractors regularly (ie. the target of certain cowboy outfits we shall not mention!) then it might work quite well. It would certainly be beneficial to the more organised limited company contractors who are capable of administering their company without the help of a go between. In my opinion.

The other advantage is that it would differentiate the EB from the hundreds of others, so even if only 1% of potential clients would go for it, that's still a lot of business.

[Iveco]

Firstly, to answer your question, there is nothing at all to stop you from going through an Umbrella Company which would get around the headcount issue and indeed the claiming back of expenses. That way the Umbrella Company will have done the initial credit checks and will enable you to have one tax certificate.

We'd handle European applications in exactly the same way as any other application. Not sure what you mean here?