Agency commission

[oxtailsoup]

I always try and discuss rates direct with the client if its possible during a contract and discuss contract extensions. You often have a better insight into what is happening within the clients company (or particular project) than an agent does.

I've been on a contract before where the agent told me he was taking 15%. He told the client he was taking 15%. I was having a few drinks with the client when the subject came up and it turned out I was getting paid £60 and the client was paying £85 p/h. The client was not happy and refused to sign a contract renewal and instead took me on directly at £75 p/h. I was unsure because of the legal implications of going direct but the client had their legal team look into it and they contacted the agent and told them what they were doing. That was about 5 years ago and I stayed at the client for 3 years. So the agency lost out on about 2.5 years commission for being greedy and lying to us. And it was a big agency too.

On the other hand I have been with agents that have been brilliant, fair and efficient. They deserve their cut of the pie IMHO.

[Denny]

Don't get it, do you, Denny? The agencies currently own the market, not the contractors who are merely the saleable commodities. It might not be palatable, but it is the current reality. Live with it.

Never.

[DimPrawn]

It's like cattle trying to cut out the slaughterhouses and go direct to the dinner table.

[malvolio]

Don't get it, do you, Denny? The agencies currently own the market, not the contractors who are merely the saleable commodities. It might not be palatable, but it is the current reality. Live with it.

[Denny]

No, agents get paid for supplying your services and you get a proportion of that. The end client is a customer that they have found through their own resources, and they have their own commercial arrangement. If you persist in thinking that agent's are taking a bit of your money, rather than the reality that you are taking some of theirs, you will only be heading for a life of frustration.

If you can't find your own work (and 95% of us are absolutely useless at doing that!) you're stuck with them. Live with it.

"No, agents get paid for supplying your services"

Like hell they do. Since when does any EB actually pay contractors to supply their services? If that was the case, they would pay us up front to take temporary ownership or our labour once the gig had been offered.

"and you get a proportion of that".

"No they cream of a percentage of what they negotiate for getting someone else to do the work they couldn't do.

"The end client is a customer that they have found through their own resources"

Like duping contractors into giving away free leads or waiting for the phone to ring from an already established client.

"and they have their own commercial arrangement"

Like ensuring that contractors are invited (forced) to opt out thinking they are entering into a proper B2B arrangement that is IR35 exempt then finding out once on site that they are expected to behave as if they're under client control buggering up any chance of legitimately claiming true IR35 exemption.

"If you persist in thinking that agent's are taking a bit of your money, rather than the reality that you are taking some of theirs, you will only be heading for a life of frustration."

Black is White
Truth are Lies
Clouds are solid.....

I'm frustrated - true - but at least I'm not plain daft or niaive, M.

Bend over now

[ratewhore]

the agent knows less about what I do and what it's worth on the open market than the client does.

Sounds par for the course...

[meridian]

Sounds like you're being far too proactive Meridian. You have no business negotiating with the client, you negotiate with the agent. What the agent then goes on to negotiate with the client is their business, not yours!

I make a point of never talking rates with the client and maybe it's shooting myself in the foot sometimes but it makes the boundaries and responsibilities clear.

Also, as Malvolio says, if you can't drum up your own business then agents are part of the game...

In this case, speaking to the client is drumming up my own business - the agent knows less about what I do and what it's worth on the open market than the client does so is not in a position to be able to sell me/myco effectively to the client.

[ratewhore]

Sounds like you're being far too proactive Meridian. You have no business negotiating with the client, you negotiate with the agent. What the agent then goes on to negotiate with the client is their business, not yours!

I make a point of never talking rates with the client and maybe it's shooting myself in the foot sometimes but it makes the boundaries and responsibilities clear.

Also, as Malvolio says, if you can't drum up your own business then agents are part of the game...

[malvolio]

In which case you're going from the wrong direction. There is only one pot of money on the table, it's up to you to negotiate with the agency, not the client. You've found the work, you've lined up the renwal, the agency only needs around 10% to make money out of the deal, so tell them they take that (or pretty close to it). If they won't play, you either go direct to the client and they get nothing or you walk away and they get nothing and probably lose the client. If you aren't prepared to do that, then back to option 1 - live with it!

[meridian]

No, agents get paid for supplying your services and you get a proportion of that. The end client is a customer that they have found through their own resources, and they have their own commercial arrangement. If you persist in thinking that agent's are taking a bit of your money, rather than the reality that you are taking some of theirs, you will only be heading for a life of frustration.

If you can't find your own work (and 95% of us are absolutely useless at doing that!) you're stuck with them. Live with it.

Usually I would agree, but not in this case. At my last contract renegotiation I negotiated direct with the client (basically, told the client that I wouldn't renew unless they offered what I was prepared to accept. In return, they of course expected my role to be somewhat senior). This negotiation was on both gross (what they paid to the agency) and net (what the agency would pay to me).
At that time, the agent who sourced the role was still with the agency, so I was careful to ensure that the net to the agency remained about the same, even though I had completed all negotiations.
The agent has now left, as has her replacement, and fresh negotiations about extending the contract are starting. The client has made it clear that their total payment per day is not negotiable, and I've half a mind to push the client to get me/myco on their Preferred Supplier List instead, but as I'm basically a lazy bastard I'd prefer the agency to reduce their commission to reflect the amount of work that I've done in continuting to secure this client for their services!!

[malvolio]

No, agents get paid for supplying your services and you get a proportion of that. The end client is a customer that they have found through their own resources, and they have their own commercial arrangement. If you persist in thinking that agent's are taking a bit of your money, rather than the reality that you are taking some of theirs, you will only be heading for a life of frustration.

If you can't find your own work (and 95% of us are absolutely useless at doing that!) you're stuck with them. Live with it.

[TheMonkey]

Agent usually gets n% of whatever the client pays them. Last place I did a contract at was a fixed sum.

[meridian]

How does agency commission work? Does the agent get a percentage of the cream?

For example, if my contract is x per day and the commission on top is (say) 15%, does the agent get a proportion of this for the duration of the contract, or a fixed sum for the placement? Or does it depend on the agency?

I'm asking because I've been in a fairly lengthy contract that has seen two agents come and go already, and now the contract is up for renewal again. Obviously I'm going to push the agency for a reduction in their percentage, but I'll have more leeway if the agency's onward costs have reduced by the original agent leaving.