Reply to: high agents cut

[rb621]

My agency I've found out is taking just over 30%. I'm not surprised, they all try and get as much as possible. We all do. That's the game. Personally I'm not sure they do enough work but companies seem to continually use them and are happy to pay when they could hire us direct for less. I do wonder what HR departments for sometimes.

stacks, you can certainly negotiate the agent's cut but what TAV says is about right in my experience. Agencies will go lower, my current one is a preferred supplier at <10% but then they didn't get me the position (found it direct, but client insist on engaging through an agent) so it's money for nothing really. You have a stronger case for taking a bit of the agents margin if you've been onsite for (say) 6 months and you are getting a 6 month extension and they are taking a big cut.

I've had clients tell the agency that they were taking a margin cut and the agency phones me up crowing that they've "negotiated me a payrise". Yes, it's a filthy dirty business but you can't let it get to you or you will just upset yourself. Concentrate on what you are good at, keep an eye out for stupid agency tricks and use it as a negotiating point when you can.

[The Agents View]

Awesome.

At least I know that if I ever come across you for something I'm working on, it'll be easier to get you bought into me. See - these little scrotes might be a pain in the neck to you, but to us, they are the easiest competition going

[gingerjedi]

...more delusions of grandeur...

I looked up the LinkedIn profile of the agent I just spoke to, his last job was a sales person at a mobile phone shop and that was only 2 months ago.

I'll think you'll find this is the normal calibre of most agents, gobtulipe salesmen with varying degrees of mild technical bulltulip experience, not skilled professionals.

[The Agents View]

So, the agent gets 100% of the fee if there's no contractor working the job then?

**** off with that one, matey.

Some of you lot are real *****.

Had one of your kind phone me up today. Agent: 'Oh while you were working at so and so, did you work for Don Smith?'

Me; 'Nope.'

Agent; 'Oh really? Who did you work with?'

Me; Click, brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr.

FYI - I've heard of agents taking 100% of the fee, by taking a short piece, and doing the work themselves (admittedly this is in the temp arena).

In reality though (and you won't like it) - you are our cost of sale. It's the difference between buying a ferrari, and buying a ford escort. Both will probably get you where you want to go, with equal reliability - one might get you there faster, but will be more expensive. A ford escort will have to be thrashed to get to where it needs to go, but a ferrari will get there on tickover. Now given that it's MY cost of sale, and the more I spend, the less I make, do you think I would take the Ford Escort and use it fully, or take a ferrari and make the least use of it possible?

Unfortunately your argument about taking 100% with nobody on site, falls short on the basis that, despite your clearly clouded view, the people on this board, are not the only contractors on the earth - there is ALWAYS someone who can, and will do it for the money.

[dang65]

The wholesale price for a packet of four Gillette Fusion razor blades is £3.52. They are being sold by Tesco, Asda and Sainsbury’s at exactly for £7.96.

In this case I'm happy with a 0% cut.

[Bright Spark]

Agent's can only command these rates because the market is full of desparate clients looking
for thick contractors who are willing to accept these rates, this is known as supply and demand.

[d000hg]

And by the way - the agent isn't taking 21.5% of your rate - you're taking 78.5% of his/hers.......

I love all the indignant responses to that. You'd think the contractors felt someone was taking a cut of their salary.

I hire a few people, and I tend to try and charge them out at the same rate - e.g I agree with client to supply people of a certain calibre at $50/hr. Sometimes I find people who have the skills who will work for $20/hr, sometimes the only people available are going to cost me $45/hr.
The client agrees $50/hr with me, so TAV's logic is true in this model... as long as I supply the services, I view the contractor I hire as an expense, not the money I make as a margin.


If you were buying selling DVDs for £5 and selling at £10, and making good sales, and managed to get one batch of DVDs for £1 each, would you drop your sale price to £2 or £6 to 'be fair'? Or would you make a much smaller reduction and enjoy a bigger profit margin?

[DodgyAgent]

And by the way - the agent isn't taking 21.5% of your rate - you're taking 78.5% of his/hers.......

I love it

[SuperZ]

And by the way - the agent isn't taking 21.5% of your rate - you're taking 78.5% of his/hers.......

This guy is a joker.
I'd love him/her to tell his clients about his belief and see how they react to him and his agency.

[gingerjedi]

The margin you quote is pretty much in line with what the market leaders are achieving.

From the SThree Group 2009 annual report:

As a result, the Group’s overall contract margin actually improved to 22.1% (2008: 21.5%), a noteworthy result in the circumstances. In absolute terms the average gross profit per day rate (GPDR) increased to £84.69 (2008: £78.30). This
represents an 8.1% year on year increase on an externally reported basis or a 1.4% improvement on a constant currency basis.

Nice to see they were taking the pain with the rest of us, as I said before I haven't noticed any agencies go bust whilst half of us are sat at home.

[padinka]

S3 Margins actually increased in 2009

The margin you quote is pretty much in line with what the market leaders are achieving.

From the SThree Group 2009 annual report:

As a result, the Group’s overall contract margin actually improved to 22.1% (2008: 21.5%), a noteworthy result in the circumstances. In absolute terms the average gross profit per day rate (GPDR) increased to £84.69 (2008: £78.30). This
represents an 8.1% year on year increase on an externally reported basis or a 1.4% improvement on a constant currency basis.

[Wanderer]

I'd say 13 - 20% is the norm, 20%-25% is top end, and 25% plus is taking the P.

stacks, you can certainly negotiate the agent's cut but what TAV says is about right in my experience. Agencies will go lower, my current one is a preferred supplier at <10% but then they didn't get me the position (found it direct, but client insist on engaging through an agent) so it's money for nothing really. You have a stronger case for taking a bit of the agents margin if you've been onsite for (say) 6 months and you are getting a 6 month extension and they are taking a big cut.

I've had clients tell the agency that they were taking a margin cut and the agency phones me up crowing that they've "negotiated me a payrise". Yes, it's a filthy dirty business but you can't let it get to you or you will just upset yourself. Concentrate on what you are good at, keep an eye out for stupid agency tricks and use it as a negotiating point when you can.

[BolshieBastard]

And by the way - the agent isn't taking 21.5% of your rate - you're taking 78.5% of his/hers.......

So, the agent gets 100% of the fee if there's no contractor working the job then?

**** off with that one, matey.

Some of you lot are real *****.

Had one of your kind phone me up today. Agent: 'Oh while you were working at so and so, did you work for Don Smith?'

Me; 'Nope.'

Agent; 'Oh really? Who did you work with?'

Me; Click, brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr.

[Growernotashower]

The wholesale price for a packet of four Gillette Fusion razor blades is £3.52. They are being sold by Tesco, Asda and Sainsbury’s at exactly for £7.96.

[gingerjedi]

Transparency is whats needed, I'm pretty sure Wayne Rooney knows how much his agent gets.

And I bet his agent doesn't think himself more important than his client.