Reply to: Think the agent may be ripping me off...what to do?

[Grinder]

Over here in The Land That Chavs Forgot, the agencies with Preferred Supplier Agreements are held to a certain margin by the client. For example one agent I am friends with has said that for certain clients they are bound to a 15% margin.

Thus the client is assured that the agent will find someone with the best skillset for the role instead of the agent trying to place some numpty they can take more cut off, and the agencies win by being the preferred supplier (lots of contractors on 15% = better return than a handful on 25-40%).

Fortunately over here the agency market hasn't been swamped by unskilled chavs trying to chase a buck off a few contractors and needing to charge a high percentage to survive.

I have worked with a company with this policy. However, at least 1 of the agencies on the preferred supplier list invite 2nd tier agencies to source suitable people for the jobs.

Someone sourced through 2nd tier will be on less £ than someone 1st tier.

1st tier will appear to have supplied contractor to the client, and appear to be paying a "fair" rate.

Even knowing this, and having it explained by me, I have a pal who still talks to 2nd tier suppliers about jobs at this client - you can't help some people!

[Wanderer]

So, the moral of your story is - don't discuss your rate with the client. If I was told to leave by the client, based on a business arrangement that I was perfectly happy with, which the client found out about at a piss up from another contractor, I'd be well f***ed off.

I hope your former colleague was pleased with himself for getting 6 contractors canned. Well done

Yeah, we can spin that one whichever way suits us, can't we.

I didn't mention it (and maybe it's relevant) but this was during heady boom times and I was new to contracting. There were a lot of contractors on site and a hire-em, fire-em mentality - people came and went as they were needed on projects by the client. A fair percentage got fired, some gave notice mid contract, the odd one walked - there one day and gone the next. It was my first contract but a bit of a microcosm of the contracting world, I'm glad I was there because I learned a lot.

In the current hard times, yes I would be unhappy. I would be even more unhappy at an agency taking 40% margin without the client's or contractor's knowledge. It would have been better all around if a compromise could have been negotiated, but the client saw it as a very serious breach of their agreement that they simply could not do business with that agency any more. Personally, I don't hold grudges or burn my bridges - life's too short to be bitter. You just have to learn from it and move on.

I learnt a valuable lesson from it and from then on I've always endeavoured to find out what the agency's cut is now so we can avoid situations like that. If a client raises the subject of the rate at interview or offer time then I'll discuss it openly as I don't think the agency generally adds any value to the negotiations. Likewise for renewals, I've always been approached by and negotiated directly with the client about these rather than the agency and that's the way I like it.

Each to their own, I know some clients don't like to get involved in that sort of "dirty business" and ask that the agent does it all for them, I respect that.

[Stan.goodvibes]

When I was a hiring manager, I cared very much what margin was being paid. If the margin is high, then for the same money I'm getting a worse contractor (or at least one bad at negotiation).

I just said that

[TheFaQQer]

The client was furious and ordered all the contractors from that agency off site (about 6 of them).

So, the moral of your story is - don't discuss your rate with the client. If I was told to leave by the client, based on a business arrangement that I was perfectly happy with, which the client found out about at a piss up from another contractor, I'd be well f***ed off.

I hope your former colleague was pleased with himself for getting 6 contractors canned. Well done

[NotAllThere]

When I was a hiring manager, I cared very much what margin was being paid. If the margin is high, then for the same money I'm getting a worse contractor (or at least one bad at negotiation).

[Stan.goodvibes]

Over here in The Land That Chavs Forgot, the agencies with Preferred Supplier Agreements are held to a certain margin by the client. For example one agent I am friends with has said that for certain clients they are bound to a 15% margin.

Thus the client is assured that the agent will find someone with the best skillset for the role instead of the agent trying to place some numpty they can take more cut off, and the agencies win by being the preferred supplier (lots of contractors on 15% = better return than a handful on 25-40%).

Fortunately over here the agency market hasn't been swamped by unskilled chavs trying to chase a buck off a few contractors and needing to charge a high percentage to survive.

[Wanderer]

NEVER discuss the rate you get paid with the client - they don't give a crap about what you get paid.

Umm, yes they do, think about it like a business person. If a business pay an agency 500 quid a day then they don't want to be getting a contractor on 300/day and the agency to take the other 200/day do they? Then wonder why they aren't much good or they walk in the middle of the contract? That's not good business.

I worked in one contract where one of my colleagues gave his notice and walked half way through the contract. The client was quite disappointed (this guy was very good and seemed happy enough) but he was adamant about leaving. Over a few beers at the leaving do, the guy admitted that he enjoyed working for the client was leaving because he'd had another job offer on a much higher rate. The company man was bemused and said he thought £xxx was pretty fair market rate. The contractor agreed, but said that was no where near what he was getting.

It turns out that the agency had beaten the contractor down (and he accepted, fair enough) so they agency was taking a 40% margin. Of course, the contractor saw this as a matter solely between him and the agency and didn't approach the client about it.

The client was furious and ordered all the contractors from that agency off site (about 6 of them). Ever since then it was their policy to tell contractors what rate they could expect.

In the position of a contractor, I wouldn't bring it up at the interview, but I've been in interviews (on both sides of the table) where the rate on offer is stated along with the job description so both parties know that there is no misunderstanding, though the agency cut is often left out. I think it's quite a friendly way to do business.

Of course, the agencies don't like it but hey.

[NotAllThere]

...
Yes, I know its hard to believe for you contractors, but clients sometimes don't WANT to pay you all of that money......

Sheesh. What fantasy land do you live in? They'd hardly give us all this money for the work we do - it must be love.

[northernladuk]

How naive.

Surely they want to get the best candidates for the least money?

No... The client will pay the agent a fixed amount regardless of what you get.. Unfortuantely you still haven't got to grips with my initial comments. YOU get a share of the AGENTS money. The price you come at is irrelevant to the client. All it means is that agent is keeping a bigger margin. Yes you being cheaper might be more attractive to the agent but what is more attractive is someone that is going to get the job.

Candidate 1 : Dead cert to get job... 20 quid more than you. agent gets paid something at least.
Candidate 2 : Unlikely to get the job.. You can do it for free. you won't get the job so not make the agent a penny whatever.

[LouC]

How naive.

Surely they want to get the best candidates for the least money?

[TheFaQQer]

And obviously, coming in for the lower rate, I have more chance of getting the job...

How naive.

[DodgyAgent]

best tip is to buy the agent some hair gel, ! .

We grow our own

[Bright Spark]

best tip is to buy the agent some hair gel, you'll be amazed at the wonders
of combining this product with an agent can acheive! .

[LouC]

they'll tell one agent £60 less than the next, to hedge their bets.

Now that's interesting. And obviously, coming in for the lower rate, I have more chance of getting the job...

Any other useful agent tips?

[LouC]

Thanks all for your wise words and hilarious comments

Of course, you're all right - there's no point going to the client about it (ever), or even thinking about it until there's a contract on table. Yes, the economy has driven the daily rate down. And this contract is now worth little more than a permie salary, but work is work, etc etc

Suck it up, Lou, he says, referring to himself in the 3rd person, twice...