Reply to: Agency Taking Large Percentage of Daily Rate

[BlasterBates]

Well having been a permie "consultant" where the consultancy takes a huge cut not a problem. I never felt under extra pressure, just did the job.

Internal staff are often charged out to departments at higher rates than the contractors, and sometimes paid peanuts.

I have to say I used to believe this about expectations and rates but my experience is once a contractor has his position the PM doesn't give a monkeys about the rate, they just try and get the best out of you. I've never felt under less pressure than higher paid contractors. In the end a dead line is a dead line and no-one differentiates contractor workload between "easy" and "hard" there ae just jobs that need to be done, estimation is done quite independently from whoever is selected to do the work. The main criteria is "are you busy" or perhaps a skill they've seen on your CV.

I could imagine if someone owned their own company they might care about different rates, but a PM isn't a profit centre, he usually has a "head count" that's it.

I personally prefer agencies with higher margins because they do a lot better job at negotiating my rate and conditions. Low margin arrangements in my experience do not benefit the contractors they benefit the client. When the client co forced contractors through a preferred supplier at my last place we were very quickly subjected to 10% cuts.

Agents on high margins are very active they poach people move them around jacking up contractor rates. I believe that happened in the oil and gas industry so the clients conspired carved up the market and drove contractor rates down.

The point is agencies are more powerful than indivdual contractors so they are better at jacking up contractor rates in a bouyant market than indivdual contractors are through immasculated preferred suppliers.

In conclusion don't worry about the agencies margin it's not your problem it's the client's and on the whole it's the client who will be forking out extra.

[lukemg]

It DOES matter for a few reasons.
1 - The worst of all is if the agent has bounced you down at the last minute claiming client is lowering rate, nothing I can do etc. This is headbuttable.
2 - Client will expect different performance and skills at diff price levels so if they are coughing 600 up they expect a lot more than 300. You might be looking expensive and wondering why they expect all sorts.
3 - It's more than possible that if you are on a higher rate than others doing same job, you are first chopped if the squeeze is on, even tho you are all netting similar.
4 - Put simply, either they get the cash or you get it, I know which I prefer.
Most of mine are with big co's that have fixed pref supplier cuts so not a concern but also less opportunity to push for more at renewals ! knowledge is power so use it to your advantage but try not to annoy the whole chain during the process....

[Wanderer]

What does it say in the contract? If it doesn't say what might happen, then it's all mouth and no teeth. If it says that the contract can be terminated, that does tend to bite the agent as well as the contractor, so it may not happen.

Yep, standard agency bluff and bluster. Just ignore it.

[speling bee]

Or your client's client's client.

Or indeed your client.

Day 1.
Reception: Can I help?
You: Yes, I cannot contractually say whether I work here or not.

[stek]

Or your client's clients.

Or your client's client's client.

[speling bee]

Or the accountant, or QDOS for contract review.....

Or your client's clients.

[stek]

So you can't tell your missus who you're working for? That would lead to domestic unhappiness in this house.

Or the accountant, or QDOS for contract review.....

[speling bee]

It says:

These Terms are confidential. Details to do with remuneration, expenses, client identity, charge and pay rates or other information related to these Terms or the Assignment, are not to be disclosed to any third party by the Contractor without the express permission of ReThink in writing.

So you can't tell your missus who you're working for? That would lead to domestic unhappiness in this house.

[kingcook]

What does it say in the contract? If it doesn't say what might happen, then it's all mouth and no teeth. If it says that the contract can be terminated, that does tend to bite the agent as well as the contractor, so it may not happen.

It says:

These Terms are confidential. Details to do with remuneration, expenses, client identity, charge and pay rates or other information related to these Terms or the Assignment, are not to be disclosed to any third party by the Contractor without the express permission of ReThink in writing.

[DodgyAgent]

mine is taking only 8%

The question is are you getting more or less than the contractor who is through an agency taking 36%?

[Ignis Fatuus]

Surely though they'd have zero chance of getting that to stick in a court of law though?

Why?

[psychocandy]

What does it say in the contract? If it doesn't say what might happen, then it's all mouth and no teeth. If it says that the contract can be terminated, that does tend to bite the agent as well as the contractor, so it may not happen.

BTW, EDS had a rule making it a sackable offence for their permies, and they actually did it. The sting in that was that their contracts specified that they had to repay training costs if fired: and guess what, it transpired that their work experience so far was classed as internal training billed at $25000.

Surely though they'd have zero chance of getting that to stick in a court of law though?

[Ignis Fatuus]

I'm on your side here, but all my contracts (and most others I bet) usually have some clause stating that MyCo and ClientCo must not discuss rates. I am wondering if this is legal?

What would happen if MyCo/Client openly discussed rates and the agent found out?

What does it say in the contract? If it doesn't say what might happen, then it's all mouth and no teeth. If it says that the contract can be terminated, that does tend to bite the agent as well as the contractor, so it may not happen.

BTW, EDS had a rule making it a sackable offence for their permies, and they actually did it. The sting in that was that their contracts specified that they had to repay training costs if fired: and guess what, it transpired that their work experience so far was classed as internal training billed at $25000.

[AnonAgent]

I'm on your side here, but all my contracts (and most others I bet) usually have some clause stating that MyCo and ClientCo must not discuss rates. I am wondering if this is legal?

What would happen if MyCo/Client openly discussed rates and the agent found out?

Nothing. Its just a scare tactic.

Most clients are clueless about what rate is acceptable, they think that 20% (margin, not markup) is an okay % because it mirrors the permanent ones. So often the client will just guess that if they are paying £500/day then the candidate will be getting between £400 and £420/day.

Personally, I work on an assumption that every contractor I place will be there long term, so before I try to be cheeky with the margin, I think about what would happen if that conversation did take place.

[yasockie]

.... and one time when an agent went insolvent. I was really pissed when the cut was exorbitant.

Same here, unfortunately - they were taking a massive cut in my case and still managed to go out of business...