Reply to: Agency margins

Re: Invoice Factoring

"If you are one of those contractors who store up 4+ weeks of timesheets and then expect payment within 7 days then with all due respect you deserve to wait until the client pays the agency."

Eh?

In 20 years of contracting I have only once worked with an agency that allowed me to invoice weekly. All the rest required monthy (or 4/5 weekly). OK so weekly was probably negotiable if I tried hard, but life is too short and ICBA. But I don't see why I should suffer waiting for the client to pay just because I meakly accept monthly invoicing. Sometimes (like the current contract) monthly invoicing is mandated by the client's system which only gives me a signed piece of paper to invoice with, at month end.

tim

Re: Invoice Factoring

I'm assuming LiddleFeesh is responding to me but the single threadedness of these boards couldn't make that less clear

I'm not sure I follow you but I'll list these points:-

1)If you invoice the agency for a weeks work and they pay you within 2-4 weeks then they are absolutely not waiting to be paid first because clients don't pay up this quickly.

2)Do you have proof that they are waiting for payment first or are you guessing?

3)If you are one of those contractors who store up 4+ weeks of timesheets and then expect payment within 7 days then with all due respect you deserve to wait until the client pays the agency.

4)Most businesses operate min 30 days payment terms and why contractors should be paid within 7 is a bit of a mystery. Mind you I wasn't complaining when it was me enjoying that sort of turnaround.

At the end of the day the agency cannot withhold payment from you until the client pays them UNLESS IT IS STATED IN YOUR CONTRACT. You did read that contract carefully I expect? Most don't and just sign on the line.

Invoice Factoring

What agencies do this? No agency I've ever used works asynchronously as you suggest.

They wait until the client has paid, and then they pay - usually themselves to a 2 or 4 week cycle (when they are earning interest from my money)...

Perhaps the bigger agencies do this. But then, as far as I am aware they also pay monthly and charge larger margins.

I'm not sure I fully comprehend your arguement.

Spring are taking 11% from me for past 10 months.

Haven't heard of 30% since Computer People in the late 70s!

Re: .

Nope.

The agency charge a margin to compensate for invoice factoring (a risky business) and NOT for introductions or they'd charge their clients a single fixed fee in the same way as they do for permy placements.

Just a quick reality check.

Would you effectively lend a contractor £1000 today with the prospect of picking up £1050 from the client 3 months later?
Would you consider the huge risk worth it for just £50 ?

That, in effect, is what the agency is having to do. I wouldn't touch it with a bargepole.

.

5% for work they havent done (and thus do not deserve) is about 5% too much.

Mailman

Re: A Tip for LiddleFeesh

I understand your frustration BobHope2.

PSL's are a total pain and clients NEVER get the best deal. It's a feeding frenzy when a new job spec comes in.

By the way, 5% will only just about cover the cost of the PSL agency.
I know it sounds a lot but typically it really isn't.

Bear in mind that large clients can take months and months to pay the agency.
In that timescale the agency would almost be better off sticking the loot in the bank.

5% ain't a lot to compensate for the costs, lost interest and (most importantly) RISK of factoring invoices.
Not a market place I'd want to be in.

Re: A Tip for LiddleFeesh

Oaksoft,

the problem I've found in the past is the PSL agreement many companies have in place, i.e. I'll have found the gig, negotiated the price, etc, only to have one of their (invariably rubbish) agencies imposed on me.

They then charge their 5-10 % commission anyway - because "they can't make a profit"

Re: A Tip for LiddleFeesh

LiddleFeesh,

My quote would depend on my circumstances and what I thought I was worth.

You should quote accordingly.

My tip above will tell you pretty accurately what you are worth and what agents are taking as a margin. You are welcome to use that advice or ditch it appropriate to your circumstances.

For example, if I wanted a .Net job but didn't know the going rate my research would probably tell me that an agent would pay around £30 per hour. My research would also tell me that an agent would charge say £50 per hour.
I'd personally not be happy to receive £30 but that is OK because I know 2 things about the market at the moment because I involved in both contracting and recruitment:-

a)There is a shortage of good quality people with relevant experience out there.
b)The agency is taking £20 per hour if I accept £30 per hour.

I would then know that if I held my cards close enough to my chest that I could probably get whatever I wanted up to around £43 per hour if I impressed the client enough.
My opening bid would probably be around £50 but only AFTER A SUCCESSFUL INTERVIEW.

Having said all of the above, I would probably not use an agent now. I have a catalogue of ~20k clients listed by their development areas so I'd just look up the C# index and start at A.

This may not work for you. Unfortunately, no-one will get you the £50 work unless you actively seek it out.
The agent rules the world only when the contractor lets him.
It seems to me that you have mentally reached the stage where you have given up on rates. I'm a little confused about why you are asking a question when the answer is obvious and unpalatable to you.

Would you apply for a contract asking for the advertised rate + £10 p/h ? Not necessarily. I might ask for more or less BASED ON MY OWN MARKET RESEARCH and not just relying on Jobserve "quoted rates".

Re: A Tip for LiddleFeesh

Would you apply for a contract asking for the advertised rate + £10 p/h ?

The agent rules the world.

Re: A Tip for LiddleFeesh

"I have no idea what the rate for .Net is so I'd probably phone around 20 agencies and pretend that I am a beginner with no knowledge of roughly what rates I could expect. I'll now have 20 random numbers."

Would you bollocks Oaksoft! :rollin
What are you like? :b

Have a look at Jobserve.

Re: A Tip for LiddleFeesh

I have no idea what the rate for .Net is so I'd probably phone around 20 agencies and pretend that I am a beginner with no knowledge of roughly what rates I could expect. I'll now have 20 random numbers.

I'd then phone the same 20 agencies a week or two later and tell them that I am looking to price up some contractors which I might want to take on. Can they quote me for supplying someone with x years .Net.

I'd then have the bottom and top ends of the scale and I'd set my price accordingly.

Re: A Tip for LiddleFeesh

Well, I've totally f*ed up there. *rubs arse again*

It's only for four weeks, I get a good project that's localish and get to do a lot of it from home.... and pray like crazy for a possible extension to the work.

Re: A Tip for LiddleFeesh

Listen to the man. Oaksoft is right. Never quote a min rate - always quote your rate and put the agent on the back foot.

Re: A Tip for LiddleFeesh

Check my other thread. I'm working my MINIMUM rate - £3

Ok - future typical .NET work. Target rate, £36p/h - start here and work down?