Reply to: Agency skimming too much???

[Scrag Meister]

26% is quite a lot, but not that unusual.

Ignorance is bliss.

Must be part of the market here in the city but I ALWAYS ensure that the agency is on the client's PSL, so I don't end up with an agency daisy chain and also that they are on a fixed margin known to the client on top of my rate, means they have an interest, however small, in getting you a good rate.

I would be looking for some heavy negotiation at renewal if that comes, down to 15% ish.

[Taita]

Don't mention it until you need to.

Give them enough rope to hang themselves - ask them to cut their rate (rather than them going back to the client), and if they refuse / lie, then that's the time to tell them that you know what they are charging.

Firstly, you should be certain that what you saw was the client contract with YOUR agency as it is possible that they are part of an agency chain.

A mark up of 36.36% on your fee rate does seem on the very high side in 2012 but the time to raise the issue is on contract renewal not before.

[Notascooby]

In that case no excuse....

[SteelyDan]

Was it a bank - was the orginal rate £300 i.e. now 10% less?

No it was some telcoms co Berks.

[Notascooby]

Just to add to this discussion, recently saw role advertised with 'ok' kinda rate, phone call to recuiter who advised the actual rate was now £30/day less than that advertised. Fishing expedition? Gullibles travels? Bunchotulipes!

Was it a bank - was the orginal rate £300 i.e. now 10% less?

[SteelyDan]

Just to add to this discussion, recently saw role advertised with 'ok' kinda rate, phone call to recuiter who advised the actual rate was now £30/day less than that advertised. Fishing expedition? Gullibles travels? Bunchotulipes!

[Wils]

For what is worth. I was in a team that recruited some Java devs and I saw all the rates that the candidates were asking and what the agency was charging the client. For this particular agency they were adding about £40 on each dev. They were ranging from £350 up £400.

So that's about 10%. 25% sounds like the candidate didn't know his worth and went in too low.

[TheFaQQer]

Fact is the client will get rid of the most expensive contractors at the first opportunity. You can be expensive to the client while thinking you're on an average rate, simply because the agency is taking the piss on their margin.

Rubbish. That would only be true if every contractor was equally useful / useless. In the past, I've been one of the last to leave, despite being one of the more expensive contractors - the client decided that they would be better off getting rid of the dross and keeping those that could deliver. If you are no different from those around you, then you run the risk of being cut purely on a cost basis, but that's the risk you take by being a BoS "contractor".

[SteelyDan]

I do wonder sometimes if there are more agents on here than are letting on.

If the agent thought your skills were worth 275 why should they let the client think they're worth 375?

Isn't it the case though, that the client approaches agent & says I want a person to do x, and this is my budget (£x/day). Agent then scurries off with his ripoffometer and advertises the role at '£x/day' minus 'agent greed factor', just fishing to see who bites?

I think we are just talking about varying degrees of agent greed here.

Client isn't dumb though and must realise candidate isn't getting the x/day rate because the agent's got to have a slice...but £100 is a bit of a pi55take.

[malvolio]

I do wonder sometimes if there are more agents on here than are letting on.

If the agent thought your skills were worth 275 why should they let the client think they're worth 375?

Don't really understand the finances here, do you.

The client usually doesn't have a clue about day rates, he has a general budget with some kind of standard cost for manpower. He will haggle with the agency to get his contractor cost down to as low a level as he can under that budget level and that's it, his cost is fixed.

The agent will have to recover the cost of doing the business and the 90 hours effort he spent on wasted calls geting to the one that pays off. Also, his bosses aren't interested in recruitment, they're cost accountants. Therefore the pressure on the agent is to maximise the gap between what he gets from the client and what he gives to you. While he's not going to lose the whole deal over £25 a day, he's not going to cut into the returns he needs to make his profit or he's out of a job.

We are always negotiating uphill in the dark, especially if you're supplying bulk skills. The trick is to start high and be prepared to compromise, and know what your bottom line is where the gig becomes uneconomic. If you get a renewal, if you're doing a good job, if you think you've added something, then look for a raise.

[PAH]

Its quite possible that the agent reckons that 275 is acceptable rate for someone with your skills and might have turned you down if you proved expensive.

I do wonder sometimes if there are more agents on here than are letting on.

If the agent thought your skills were worth 275 why should they let the client think they're worth 375?

Fact is the client will get rid of the most expensive contractors at the first opportunity. You can be expensive to the client while thinking you're on an average rate, simply because the agency is taking the piss on their margin.

Another fact: The only party that benefits from keeping rates secret is the agent, hence why they have non-disclosure in their terms. They're not doing it for your's or the client's benefit.

Personally, in the past I've found out I've been on a lower rate than comparable contractors in the team, and let the agent know at renewal time if they're not budging enough on the rate increase. If they ask how I know I say that x told me after they left. Sometimes you've got to stoop almost as low as the agents when it comes to protecting yourself from being shafted by them.

[SteelyDan]

I don't like agencies adn the ir current business model only serves agencies, bobody else.

You gotta a cold Mal?

[Robinho]

He isn't. You are.



Yes, dur... You want more, negotiate harder.



To which the answer is bleedin' obvious. All you have to do is win your own business.

Calm down dear, you're not telling me anything i don't know.

I am saying is that a lack of "perfect information" can distort the market forces in favour of the agent, that is all. i am more than happy with what i earn.

[malvolio]

Help! Dodgy has stolen Mal's login

You noticed...

I don't like agencies adn the ir current business model only serves agencies, bobody else. But the point is that if you're going to negotiate with an agent, it's a good idea to understand his business drivers. That way you can counter his main arguement, that you cost money to support. You do, but you cost a lot lesss once the business is won and the first contract completed, at which point he's recovered his investment cost and you are simply a revenue generator. He can't then justify the same margin since there is no cost recovery needed any more.

And the OP's knowledge of the numbers and peiods involved means he can work out exactly by how much the agency can afford increase the OP's rate.

[Ignis Fatuus]

He isn't. You are.



Yes, dur... You want more, negotiate harder.



To which the answer is bleedin' obvious. All you have to do is win your own business.

Help! Dodgy has stolen Mal's login