The Contractor - Agency Relationship

[DodgyAgent]

Bulltulip. We are what the recruiter supposedly supplies, so what affects them affects us. It's our livelihoods that are at stake after all. In truth, of course, the recruiters shouldn't be 'supplying us' at all. We're limited company contractors/freelancers with businesses in our own right, so they should be paid for what they do not what we do based on our efforts once on site. That's why their own fee should be advanced on the effort they put on finding the right contractors for the roles on offer not be paid a mark up on the contractors efforts, once on site. If that were the case, then the 'minding our own business' model might work because their mark up or finders fee wouldn't affect our own livelihoods. As it is, it doesn't.

They should be paid whatever the client wants to pay. What is not appropriate is for some pompous little tin pot hitler wandering around telling everyone what is right and what is wrong. Are you some sort of policeman Denny or what?

[Denny]

Your contract is with the agency, not with the end client. The client's expectations should therefore be addressed to their supplier, i.e. the agency, and not to you. Isn't that right, Dodgy?

Bulltulip. We are what the recruiter supposedly supplies, so what affects them affects us. It's our livelihoods that are at stake after all. In truth, of course, the recruiters shouldn't be 'supplying us' at all. We're limited company contractors/freelancers with businesses in our own right, so they should be paid for what they do not what we do based on our efforts once on site. That's why their own fee should be advanced on the effort they put on finding the right contractors for the roles on offer not be paid a mark up on the contractors efforts, once on site. If that were the case, then the 'minding our own business' model might work because their mark up or finders fee wouldn't affect our own livelihoods. As it is, it doesn't.

[Chessplayer]

Well there is no harm in asking, but lets face it how many businesses tell you what their margins are. Does the bank tell you what margin it earns on Foreign Exchange transactions, no they don't. They give sell and buy prices and what they earn on that is a secret. In fact what they earn on it depends on how good their traders are.

Its a bit like asking Bill Gates for the source code for Windows. It gives away their market position.

Comments with respect to this thread have been most interesting - thanks!

I fully appreciate the stance an agency may well take, however the relationship between a contractor and an agency is of an entirely different nature than the relationship between a consumer & a bank.

The whole question embraces negotiation, business boundaries & human relations, from personal experience Angencies tend not to think long term and the idea of establishing a long term trust relationship with a contractor is utterly foreign, which is a disappointing business approach for all!

The counterpoint to that is that a possible fault is I expect too much from human relationships and perhaps I should simply fall in line with the current modus vivendi.


I believe the road to a winning formula is constantly questioning one's tactics, which is all part of human evolution right?

[BlasterBates]

A reasonable request one would think

Well there is no harm in asking, but lets face it how many businesses tell you what their margins are. Does the bank tell you what margin it earns on Foreign Exchange transactions, no they don't. They give sell and buy prices and what they earn on that is a secret. In fact what they earn on it depends on how good their traders are.

Its a bit like asking Bill Gates for the source code for Windows. It gives away their market position.

[DodgyAgent]

Your contract is with the agency, not with the end client. The client's expectations should therefore be addressed to their supplier, i.e. the agency, and not to you. Isn't that right, Dodgy?

Technically yes expat, though if I were a contractor I would (quietly) go about finding out how much margin I am being skinned for. If it is convenient to go through the agency fine, if it is not then provided one assesses the politics of a situation then do things differently.

The point that I try to make is that there are few rules in this business except for those set in law. I think that this is a good thing. I believe very strongly that it is up to all people to work the system to their advantage. Remeber everything is negotiable.

The great thing about this business is that there are so few rules

[expat]

If you are offered what you ask for then its none of your business. However if they want to get you for a cheaper rate then its reasonable to disclose the margin.

IMHO of course.

Your contract is with the agency, not with the end client. The client's expectations should therefore be addressed to their supplier, i.e. the agency, and not to you. Isn't that right, Dodgy?

[vetran]

its your business if it affects you.

If you are offered what you ask for then its none of your business. However if they want to get you for a cheaper rate then its reasonable to disclose the margin.

IMHO of course.

[Chessplayer]

I agree with you. We should know the margin that agencies are charging clients. Although that is part of their fee not ours, it directly affects us for the following reasons:

Too high margin might lead to client expectations of our work to be more than we can realistically deliver. If they're paying for a racehorse but we're being paid donkey rates what good is that to anyone?

Our contracts could be cut short or not extended if the overall charges are too high.

That's why it's our business.

Thats very interesting what you say Denny & thanks for the contributions - having just signed on to this forum I must say it's of great value.

A large part of what we speak of embraces human negotiations to various degrees. The level of ineptitude displayed by Agencies is truely mind boggling & if I was able to forge a successful one with them then life would be so much easier - however we can't have everything can we? When discussing a role with someone who sounded like she'd been at the agency for 15 minutes only to say "well can you do the job or not?" makes me weep.

It really is excruciatingly painful to listen to or indeed to accept that business should or must be conducted at that level of amateurism.

If anyone has any more thoughts on the best position for negotiating with agencies on revealing their commission please post.

Know your place humble 21st Century proletariat!
Perhaps the agency was right - it's none of my business!

[privateeye]

Know how you feel, agencies have an arrogance that lead them to believe we have to do what they want us to do.

If I am not given enough info such as rates, location, full spec etc I just simply refuse to allow myself to be put forward but they seem not to be able to understand that. Just on Friday an agent calls me with a fantastic contract that is somewhere in the South-East, hasn't got the full job spec but it matches my skills exactly??, asks me how much I want to earn so he adds £25 to it and insists I'm a perfect match for the job he has no spec for. He then wants references upfront - ha ha this is a fake job and trawl for leads.

Unfortunately this type of behaviour of agents is very common and upsets not only contractors but the decent agents as well. If agents want leads you look after your contractors and they will volunteer them.

To combat high mark-ups I do the following.

Search JobServe etc for the same job but via another agency always gives an indication of which agency has the highest mark-up and which to avoid. The rate they are paying is also an indicator of the mark-up ie if its too low.

Generally if an agent asks me how much I want then cuts that down they are trying to increase their margin as much as possible.

If an agent actually makes the point of saying do not discuss finance in the interview I know they have something to hide. If a client asks me what I am being offered I will say what it is but emphasise that the agents commission is on top.

At the end of the day, my business has terms and conditions and so do the agents. If they don't match up thats fine by me but this seems unacceptable to a lot of agents who rather than just accept it turn nasty.

Luckily for me I'm involved on a project with people from all sides to help stop this problem once and for all and for mark-ups we think we have found a solution to ensure it is monitored and that no-one is being ripped off - more on that when its ready for publication early spring.

[ancient]

Too many agencies expect us to turn up to interviews for ill defined roles and without any knowledge of the payment or other contractual terms.

It can be an uncertain pain in the arse, or an opportunity, I guess it depends on attitude and outcome.

What is sure, Contractors are expected to carry a significant burden of risk and associated costs, and in many cases the rates offered do not reflect this.

I can see alot of Contractors who have been through the ringer e.g. not first time Contractors exiting the market as the margin between Permmy and Contract is no longer viable, especially if it takes three months plus to secure a new engagement.

What anoys me most is the rates offered by the likes of IBM, e.g. we work through an agency for peanuts, for one of the big five and are then sold on for mega-dollars to the end Customer. Contractors who work through a supplier are often left alone, but Contractors supplied directly to the Client e.g. not through the big five, though being cheap are often highly threatened.

It is a mad world, one that is often not to the favor of the Contractor.

Good old supply and demand.

[Denny]

I find that the whole relationship building process if you will with agencies is a King Sized pain in the arse. For example in order to establish trust I asked what would be the agencies commission for a transaction involving my LTD.

A reasonable request one would think, yet this query was met with a "None Of Your Business!" reply, which leads me to think - What's the point?

Just what IS my business? Where are the lines to be drawn?
Do I request a copy of the agencies Terms & Conditions?
Is it even worth the effort of going down that route?
Perhaps they might think they are dealing with just someone who asks too many questions?

What a bloody joke!

I strongly welcome views from anyone who has an opinion on how they would deal with this?

Thanks In Advance.

I agree with you. We should know the margin that agencies are charging clients. Although that is part of their fee not ours, it directly affects us for the following reasons:

Too high margin might lead to client expectations of our work to be more than we can realistically deliver. If they're paying for a racehorse but we're being paid donkey rates what good is that to anyone?

Our contracts could be cut short or not extended if the overall charges are too high.

That's why it's our business.

[Chessplayer]

I find that the whole relationship building process if you will with agencies is a King Sized pain in the arse. For example in order to establish trust I asked what would be the agencies commission for a transaction involving my LTD.

A reasonable request one would think, yet this query was met with a "None Of Your Business!" reply, which leads me to think - What's the point?

Just what IS my business? Where are the lines to be drawn?
Do I request a copy of the agencies Terms & Conditions?
Is it even worth the effort of going down that route?
Perhaps they might think they are dealing with just someone who asks too many questions?

What a bloody joke!

I strongly welcome views from anyone who has an opinion on how they would deal with this?

Thanks In Advance.