Reply to: negotiating greater cut of agents % at renewal

[Wanderer]

Does anyone know how much the actual agent gets in a typical large agency?

We have absolutely no way of knowing how much your agent is taking but an agency will take anything from 5% to 50% of what the client is paying.

Ask the client how much they are paying the agency and try and get the agency's cut down to < 10% at renewal time.

Renegotiating at contract renewal time is fair game - even if it is only 3 months.

[dogzilla]

I just took on a 3 month contract and I think I sold myself short, the agent was too happy to sign me up at the rate I got. The client said on the phone they want to renew after 3months assuming I'm as good as they think I am. Sure the agent won't be happy after just 3 months but it's no good getting shafted. Does anyone know how much the actual agent gets in a typical large agency?

[AnonAgent]

This agent sounds like a smaller operation, they wouldnt work at less than 15% "margin" for a standard client. i should know, I would never run a contract, regardless of how long it had been running, for less than 15% margin.

Which at £450/day all inclusive, is £382.50.

£100 into £450 is 22%.

Remember that many agents think at margin percentage and think mark up is an insult, so remember this in any negotiation. Agents care about % of the client rate, not the candidate rate, because they "sell" themselves on providing more than just finding a candidate for role, they run and payroll the contract as well.

If one of my contractors rang me up and said that the client thought it was at 15% and I want a £30/day increase so that we are closer to that mark, then I would probably agree. Though my clients rarely care what I am taking as long as the contractor is happy.

[captainham]

You reckon? Not so sure. My clients attitude (admitedly a large multi-national) would be 'not your business'

+1. Mine is large multinat too, very relaxed atmosphere to work in, but if I asked, I'm pretty sure I'd get slapped down very quickly indeed. And their Service POs are held in a system I have no reason to have access to, dammit...

[psychocandy]

And rightly so too. If you ever find this information out by illegal means then you have to be very careful how you use it.

Many clients are quite happy to reveal it if you ask though.

You reckon? Not so sure. My clients attitude (admitedly a large multi-national) would be 'not your business'

[The Agents View]

FYI, your agent is taking a 22.5% margin (give or take a pound or so), not 30%.

[Wanderer]

I just know my client would go nuts if I were to poke around and try and find out this information and then try to use it.

And rightly so too. If you ever find this information out by illegal means then you have to be very careful how you use it.

Many clients are quite happy to reveal it if you ask though.

[psychocandy]

Oh, don't worry, the client had mentioned in passing what the agency were paid anyway...
No-one knows I had this information already apart from you random strangers

OK. Like I said if client wishes to tell you anyway then thats up to them.

I just know my client would go nuts if I were to poke around and try and find out this information and then try to use it.

[jezosaurus]

IMHO, the agencies options are to give you the 15%, or to watch you walk at the end of the contract.

The first option 1/2s their income from you, the second option cuts it down to 0.

The client, of course, will want to know why you're leaving, and is very unlikely to re-use an agency who is taking an unfair share of their money, so the agency risks loosing the client alltogether.

Unless they have a cast iron sole supplier deal with the client, they don't have an option.

[SeaBass]

Oh, don't worry, the client had mentioned in passing what the agency were paid anyway...
No-one knows I had this information already apart from you random strangers

[psychocandy]

Not being funny but I'd be a bit concerned about using information that wasn't meant for my eyes in this way. Fair enough you know now so you've got an advantage. But keep this info to yourself.

But to go to client/agent and say you know the cut because you 'found' a file on a server may cause you some issues. Privacy and all that. To go steaming in and say you KNOW their margin - not cool.

Of course, up to client if they want to tell you, nothing agent can do. Just can't imagine client being too pleased if they find out you've been divulging company confidential information.

[kingcook]

I was tidying some of my files on the server, and saw some with my name on and thought "oh, don't remember leaving those there but I'll move them anyway". Turned out they were the purchase order things to the agent.

Nice. I spotted the same on my client's server but didn't have permissions!!

Anyway... it's surprising what paying for lunch + a few beers can achieve

[SeaBass]

Out of interest - how did you find out the agents cut?

I was tidying some of my files on the server, and saw some with my name on and thought "oh, don't remember leaving those there but I'll move them anyway". Turned out they were the purchase order things to the agent.

Anyway, bottled it a bit (my wife didn't want me calling the agents bluff). Well, I say a bit. A lot! I'm still on the same rate but taking the positive of that I'm slightly more experienced (though not necessarily better) at rate negotiations.

It didn't help that the end client are happy with the margin that they are paying. F*** knows why!

[psychocandy]

Hi!

My contract is being renewed, but have discovered the agent is taking a 30% cut. The client thought they were on 15%.

I'm keen to make their percentage of the contract 15%.

Contract ends tomorrow. I've asked the agent for a rate increase. he gave me the usual spiel about market rates, that's the contract rate, the client has no extra money. I couldn't think of a brilliant counter argument, so just suggested he have a think about it and get back to me...

He's claiming he'll ask the client for more money (who will say no!), and who are aware that the agent is on a higher rate than they thought, but are happily remaining neutral for the time being.

Total day rate is £450. I'm getting £350 of that, but after £380.
Any hints on negotiation strategy that is better than my "give me a better rate or I'm not there on Monday"?

thanks

Out of interest - how did you find out the agents cut?

[Wanderer]

Be careful that you are not introducing someone else (either directly or indirectly) to replace you if your contract forbids this (whether for monetary gain or not).

Good point, of course we would never do such a thing quite so blatently! No way. Not deliberately anyway. But point out that you will be speaking to a large number of agents and as we all know they they will need two references, won't they! Play them at their own stupid games.

Offer to speak to the client on their behalf and let them know that you know they are on a 30% margin.

Ha, that one will make them scream. It's a good way to up the pressure on them.

The other thing I have found that works well is playing the waiting game with them. When they get you on the phone they try their best to make it a high pressure situation. Need an answer in the next 60 seconds or the deal's off etc. Don't take the bait, you can afford to accept at the 11th hour if you want. If the agency loses a contractor then they are dumped in the tulip trying to find a new one quickly.

Take your time, sleep on it. Tell them you will call back tomorrow. Stall as much as you can, it will make them sweat because at the end of it they want their money just as much as you do. In fact, they have done their hard work and now they are getting money for nothing so they will be desperate not to lose you. Keep your ear open to what the client is saying though, you need to keep them happy though out this. If necessary, tell them that you will extend but it's just a matter of the rate to be settled and they may go and give the agency a rocket.