Reply to: Peed off with Agency

[Wanderer]

No it doesnt. If he had a business mindset, why the **** did he accept and presumably give his rate as the order of 250 a day?

I'll tell you why, because its his first contract and he was happy to accept 250 a day.

Absolutely right. In business we call this a "loss leader".

The OP accepts a discounted rate to get in the door. A great job is done and they've built up a good working relationship and proved their worth, they've also invested a lot of time in getting to know the client's systems and business workings. Client wants to extend the contract and the business man renegotiates the rate.

Likewise, the agency has made it's money on the first 3 months of the contract taking a massive margin, it's now time for them to slash their cut to a reasonable level. The risk to them is that if they don't then the contractor walks and most likely another agency fills the position so they get nothing.

Got 3 month contract extension. Same rate. Still not accepted it but probably will do tomorrow without any fuss.

Make the agent sweat a bit by telling them you have a couple of interviews at 350/day and you want to see how they come out first. "Nice gig, easy commute, good working environment etc, etc". Don't tell them where the interviews are, they will just try and recruit people into the same position in competition with you. You are doing this purely to put the frighteners on them.

Don't rush in to accepting an extension, there is no point. If they are offering you an extension then they aren't going to be walking away from the offer just because you are slow signing.

Also, don't forget that the agency are making 200/day out of you. At this stage, that's money for nothing - there is no way they are going to let you go because if you did then the job goes on to the open market and there is a very real danger that another agency will recruit your replacement and they will get NOTHING. If it's a choice between them taking 50 quid a day and taking nothing, I tell you which one they will take.

Do the sums, how much is another 100 quid a day going to do for your war chest over the term of the contract....

[lxt04]

I think the point Bolshie is making is that it sounds like you didn't negotiate when you were offered the rate. It sounds like the agency offered you £250, and you accepted.

If you're working for a company that doesn't enforce fixed margins, it's the agency that has everything to lose by you not taking up the contract. When you go and buy a used car, there's a sticker price. That's the price the dealer would like you to pay. Similarly, the rate an agency offers you is the rate they'd like to pay, not the rate they're willing to pay.

This is why renegotiating in mid-contract is a big no-no for most people. You buy your used car, and one of your friends buys an identical model at 25% less. You can't go back to the garage and ask for the difference. An agency that's not on a fixed margin is always going to present you with an initial offer that's below what they are willing to pay.

Bottom line: renegotiating mid-contract is a big no-no. You signed a contract, and if you weren't able to negotiate a better deal but signed anyway, that's your problem. Trying to get a pay bump half-way through brings you nothing but grief - no matter how good you are at you job! It's almost certain you'll be turned down, and if you're on a notice period you'll be locked into a job with a lot of bad feelings for weeks or months.

[NorthWestPerm2Contr]

No it doesnt. If he had a business mindset, why the **** did he accept and presumably give his rate as the order of 250 a day?

I'll tell you why, because its his first contract and he was happy to accept 250 a day.

If he had a 'business mindset' as you try to make out, he'd have done some research before he started contracting to find what his rate level was. If he had a 'business mindset' he wouldnt have accepted 250 a day when the agent said (presumably) 'you're a first time contractor and the rate is............'


Bottom line is this is like sellin your house for 250,000 and finding your next door neighbour has sold his for 350,000.

Not true, I very well knew that I should be commanding a rate of 300+, however the situation was there were no contracts out there. I didn't know their margins, I had to accept what I was given. Using your analogy - I sold my house for 250,000 as nobody was wanting to buy houses at the time and was in weak position to negotiate. Give me another 3-6 months and should have enough of a warchest to be able to tell those agents where to go.

[BolshieBastard]

Really, it sounds more like the OP is getting into a businessman mindset to me. If your middle man is taking a massive cut, you try and negotiate it down so you and the client can both get a better deal. Nothing wrong with that.

No it doesnt. If he had a business mindset, why the **** did he accept and presumably give his rate as the order of 250 a day?

I'll tell you why, because its his first contract and he was happy to accept 250 a day.

If he had a 'business mindset' as you try to make out, he'd have done some research before he started contracting to find what his rate level was. If he had a 'business mindset' he wouldnt have accepted 250 a day when the agent said (presumably) 'you're a first time contractor and the rate is............'


Bottom line is this is like sellin your house for 250,000 and finding your next door neighbour has sold his for 350,000.

[malvolio]

A couple of questions:

1) It's not worth risking negotiating in my situation yet?
2) Is it helpful to see extension on your CV? i.e. as its my first perhaps being patient would be better?
3) When this contract finishes it will be beginning of august, do you guys expect market to be good around august/september this year? i.e. it won't be as bad as last year?

Thanks

1. I've answered that one. See my earlier reply putting the management viewpoint, then make your own decision

2. Yes. It means you're worth hanging on to.

3. Who knows. Totally depends on how the markets react to the emergency budget. But hey, you're a contractor: you want certainty, get a permie job.

HTH

[NorthWestPerm2Contr]

Got 3 month contract extension. Same rate. Still not accepted it but probably will do tomorrow without any fuss. Market seems a lot better and I got one interview offer at a similar rate - no point. 2 other genuine leads exactly matching my CV offering rates of £350-£400 (but look 1 or 2 weeks away from being realised with current contract finishing in 5 days). But I guessed I am not yet in the strongest position to negotiate. First contract and not much of a war chest. It doesn't look like they will add an additional 3 months onto this one because of changes in the company although this is still possible.

A couple of questions:

1) It's not worth risking negotiating in my situation yet?
2) Is it helpful to see extension on your CV? i.e. as its my first perhaps being patient would be better?
3) When this contract finishes it will be beginning of august, do you guys expect market to be good around august/september this year? i.e. it won't be as bad as last year?

Thanks

[lukemg]

Oh, and forget all this - you were happy with the rate at the time rubbish, we have all had the squeeze put on last minute by agencies changing the picture when you are halfway to the site - Sorry, budgets been squeezed, rate has come down blah blah. If this DID happen to you, I would mention that to the HM as well, say, yes I did accept the rate because the agent said the company was struggling and had cut the budget etc.
I mostly work at big places with PSL's and fixed %'ages and while some of the rates aren't wonderful I am happy the markups aren't being abused.

[lukemg]

Some good advice on here but as always it is down to how bolshie you can afford or are prepared to be. First off - make sure that the client is VERY happy with all aspects of your work, attitude etc As a contractor you need to be the PERFECT worker, no whinging, time off for the cat etc.
Step 1 - Be frank with the agency at renewal time, say look, I am happy to stay but I want a higher rate as I believe you are getting 450/day. They might get stroppy and deny it, none of your business, how do you know etc. It is still less effort to keep you in place rather than risk losing the contract (they won't be on PSL at this markup). If this yields a result - job done. But if they flatout refuse or get stroppy, consider the following (and the agent will know there is a risk of this)
Step 2 - If you have a good working relationship with hiring manager, have a quiet chat, no threats etc. Say look, I like it here and I want to stay but I think it is a bit much that the agency is getting 450/day and I am getting 250. The suggestion is that you are both getting ripped off, not that you are just greedy. There are a number of bodies on site and this is likely to raise a number of questions about the margins. Be prepared for grief when this breaks if HM lets on it was you.
This can have a number of consequences - Client co could cut payment to agency and you get no more cash. Client co could cut links with agency which may result in you losing the work. These can easily happen especially in a smaller more volatile co. Best scenario is you get a rise BUT the best chance is to negotiate with the agent, they have had a good earner and they will still be doing ok if you get 300-350 (start at the higher one). You will NOT be popular either way and others on site could end up losing contracts too if all hell breaks. BUT, if you know you are valued on site and prepared to risk losing the work, take a deep breath and become a business.

[Wanderer]

Wish I had a contract paying £250 a day, I'd be a hoopin and a hollerin! Maybe time to get real?...in this current market maybe just be grateful your earning.

And what would you be thinking if you found out that it could have easily been £350 a day?

Oh dear, I detect a residual permie mindset here!

Really, it sounds more like the OP is getting into a businessman mindset to me. If your middle man is taking a massive cut, you try and negotiate it down so you and the client can both get a better deal. Nothing wrong with that.

[dspsyssts]

Wish I had a contract paying £250 a day, I'd be a hoopin and a hollerin!

Maybe time to get real?...in this current market maybe just be grateful your earning.

[The Agents View]

So in your defence you're saying the consultancies are just as bad as you are when it comes to ripping off end clients and contractors alike... marvellous.

Nope. I'm saying the consultancies charge FAR more, for the same service. Read it properly.

[gingerjedi]

...some more agents bollocks...

So in your defence you're saying the consultancies are just as bad as you are when it comes to ripping off end clients and contractors alike... marvellous.

[The Agents View]

Funny how we all know the difference but the agent doesn't... shysters the lot of 'em.

You only see one side of it. 1/3 of my contractors WORK FOR CONSULTANCIES. They take the requirement, and ask me to fill it... they then take their cut, and I take mine. It's psychological - the whole "he's costing £1000 per day, so he must be good" thing - it's b99999ks - it's the same people, with a consultancy badge, and 100% markup applied.

Do you REALLY think that consultancies have hundreds of people sitting on the bench waiting for projects, being paid without doing anything? Or do you think that in a recession they reduce their risk by bringing people in on a call off basis?

Ultimately the consultancy does exactly the same thing as an agency 80% of the time - they take a role, ask a client to review some profiles, and place people - their agenda is often then to get additional people in by "recommending" throwing resource at a project. The additional 20% takes account of the skeleton permy staff that works as you suggested - they're often the ones who get put in as a preference, as the consultancy can charge them out at £1000 and make £800 off them.

Funny how the agent knows this but GingerJedi has such a tainted view of the industry that he can't see what's staring him in the face.

(my job on Monday is to pull together 20 profiles for a consultancy to submit to a client for a big bid - they don't have the skills in house - so the whole thing is a simple bodyshopping exercise. It's a big5 that I'll be working with....go figure)

[thunderlizard]

I don't understand what bit of your situation is bad news, unless you want to dwell on the past. You've just found out that there is lots of slack in various peoples' margins, and you are the cheapest man on site. Much worse would be to find out that you are costing the client £200/d more than anybody else and the middlemen are only making tiny margins out of you. Then you'd know you'd be first for the chop, but as it is you know you've got plenty of wiggle room if you need it.

[gingerjedi]

Exactly. Also, a consultancy often has more than just a few people on site and as you said is providing more of a service than just a "bug 'em CV's and see if they hire one" type service to end client. Hence, contractors working via consultancies will earn a smaller slice of the rate charged to the end client, the consultancy will also have more responsibility than an agency has. Agents/agencies need to get real on what they're really doing for their dough and if ripping contactors off, need to accept the consequences should the contractor find out and damage the agency relationship with client co.

Funny how we all know the difference but the agent doesn't... shysters the lot of 'em.