Reply to: Rate changes

[TykeMerc]

I don't buy this - I am happy with the rate, don't care about the markup stuff for a few reasons:
1 - Been stitched up too many times by agents pleading poverty, client won't budge, will review after 3 months - yeah right.
2 - Clearly clientco values the role higher, which means my company has the potential to increase revenue - I want that increase.
3 - You may find you are priced higher than people in a comparable position at clientco (even though you might be getting less than them !!!). This puts you at risk of exit if any belt tightening happens.
4 - I know the agents job is more difficult than contractors think but anything over 15% - especially after a few months is taking the piss no matter how they try to dress it up.
Mostly work on PSL's which are tied down tight but I would be VERY interested otherwise.

I do feel much the same way and I usually find out the agency percentage pretty quickly as I manage my project budgets and my time typically gets billed to the projects.
Anything at over 15% of the charged rate going to the agent tends to raise my hackles, but for the last few years it's been less than that (one was at 5% which I was surprised by) so I've had no cause to bitch.
I have a bit of an advantage as commercial negotiation is part of my profession so I admit I find it fun rather than a chore or distressing to have to do the negotiations if I need to.

[ChimpMaster]

I don't buy this - I am happy with the rate, don't care about the markup stuff for a few reasons:
1 - Been stitched up too many times by agents pleading poverty, client won't budge, will review after 3 months - yeah right.
2 - Clearly clientco values the role higher, which means my company has the potential to increase revenue - I want that increase.
3 - You may find you are priced higher than people in a comparable position at clientco (even though you might be getting less than them !!!). This puts you at risk of exit if any belt tightening happens.
4 - I know the agents job is more difficult than contractors think but anything over 15% - especially after a few months is taking the piss no matter how they try to dress it up.
Mostly work on PSL's which are tied down tight but I would be VERY interested otherwise.

I would have written just that. And much of it shows in a post I put in the other thread "Agency Percentage. Does it matter or not?"

Are you sure you're not me?

[SueEllen]

Again I am talking agency cut, keeping the end client out of it.

Lots of times the end client is happy for you to find out how much they are paying the agency. Obviously it's easier if you are in some roles than in others to get this information.

[magicbuttons]

Depending on how well you get on with your client, their TOCs with the agent and how cheeky you're willing to be, you could possibly have a chat about going direct and negotiate a rate between your current rate and what they're paying. At that markup it could be in both your interests, even including an intro fee.

[lukemg]

I don't buy this - I am happy with the rate, don't care about the markup stuff for a few reasons:
1 - Been stitched up too many times by agents pleading poverty, client won't budge, will review after 3 months - yeah right.
2 - Clearly clientco values the role higher, which means my company has the potential to increase revenue - I want that increase.
3 - You may find you are priced higher than people in a comparable position at clientco (even though you might be getting less than them !!!). This puts you at risk of exit if any belt tightening happens.
4 - I know the agents job is more difficult than contractors think but anything over 15% - especially after a few months is taking the piss no matter how they try to dress it up.
Mostly work on PSL's which are tied down tight but I would be VERY interested otherwise.

[Theonenonly]

I'm more interested in finding out why the client is paying 104%

Typo Mr Smart arse 63/37

[Bunk]

No, no the agent claim that since the deal was agreed at the start and I accepted they will not give me a higher cut of our 67/37 split.

I'm more interested in finding out why the client is paying 104%

[2BIT]

I think you should accept the 37%margin for the rest of this contract and then use the "I've got a better offer elsewhere" trick but make the daily rate what yours would be if the agents only has a 20% margin, you can then say to the client that as you enjoy working for them you would stay if they offered the same rate.

You kind of need the client to take the initiative to talk the agent down, if they really want to keep you they will work out that if the agent drops his margin you will renew but they'll think it's because you have a better offer and not because you object to the agents margin (which they may feel is none of your business)

[Theonenonly]

The agency claims they need to talk to the client to reduce how much they take?

No, no the agent claim that since the deal was agreed at the start and I accepted they will not give me a higher cut of our 67/37 split.

Instead they suggested going to the client and ASKING FOR A PAYRISE lol which I told them it doesnt matter as I think thats rather cheeky in all honesty. I said I dont want the client to incur more costs as what your charging is enough, however I want to look into our deal (contractor to agent) but as i suspected I signed so the deal is done.

Agent then sent an email back saying rates to client are supposed to be confidential and I shouldnt look at it they are taking 37 PERCENT.

However after all of this I am happy with the rate I am on, I just thought that seeing the amount of cash the client was paying for me and seeing the agents BIG cut I would try my hand he he.

Again thanks for those who have provided feedback

[Theonenonly]

I'm guessing you're caught by IR35 then with talk like that.
I would learn how to spell extention (sic) for further communications too.

I am working via an umbrella so doesnt matter

"Extension" sorry mam

[GillsMan]

In future when I secure my next contract can I outright ask them what the end client is paying? then negotiate a rate from there? Also could I ask to put in a "review of pay" after this first month or 2? Just incase the work is more involved than originally thought?

Again I am talking agency cut, keeping the end client out of it.

I personally wouldn't. Different people have different outlooks on this, I'm sure, and I've only been contracting since April, so perhaps mine isn't the best POV, but I take the view that I couldn't gaf what the client is paying the pimp. The only thing I really care about is my rate, whether I'm suitably recompensed for the work I put in and whether it's broadly in line with market rates; I only care about not selling myself short.

Of course I'm mildly curious as to what the clientco is paying the pimp, but I'm not that bothered in all honesty. Pimp could be taking a 99% cut for all I care; I'm getting paid a good whack and it's in line with - or slightly above - market rates.

[d000hg]

The agency claims they need to talk to the client to reduce how much they take?

[Sausage Surprise]

Yes this is how I found out I actually got handed a purchase order from HR for my services to pass on to the boss and just so happened to spot the hourly rate, worked it out that the agencys cut to be 37%.

I have just had a performance review that I personally asked for, I have just emailed my agency with the outcome of the meeting and my contact is very impressed. I have asked if it would be an appropriate time to discuss rates, coming from my end as a sort of bonus for performing well over the last 3 month.

I'm guessing you're caught by IR35 then with talk like that.
I would learn how to spell extention (sic) for further communications too.

[Theonenonly]

Hi all.

Got an answer back from the agency!

They said they would be happy to speak to the client on my behalf lol as his rate was agreed when I signed the 6 month contract.

He said any changes mid contract need to be agreed with the client as he cannot change the 63/37 cut that we agreed upon.

I am taking this on the chin and once there is word of an extention, thats when I will try and get him down to 20%.

One more question, the agent also told me that we did not agree to a review of the contract half way through and thus he will not lower his cut.

In future when I secure my next contract can I outright ask them what the end client is paying? then negotiate a rate from there? Also could I ask to put in a "review of pay" after this first month or 2? Just incase the work is more involved than originally thought?

Again I am talking agency cut, keeping the end client out of it.

Thanks again for your advice

[lukemg]

Lots of low paid roles have big percentage markup due to the overall amount of money available - 50% of f'all barely covers the cost of admin etc.
For you, they are stitching you up. This would burn me up - Especially if they had pleaded poverty on the way in, client won't pay more etc.
At renewal - I would be looking to drop them to 20% and I would make sure the client was on side (i.e. really wanted me to stay) before playing hardball but I would not include the client in the discussion unless as a last resort.
If need be, tell the agency you know the markup so they can stop talking bollocks - don't tell them how you know.
Give them a figure you want and leave it at that.
If they flat out refuse, let them sweat a while but you may have to talk to clientco about your concerns.