Reply to: Fixed Fee Recruitment

[jamesbrown]

That's an interesting point of view

And that's all it is (I work through tenders rather than agents, so I'm probably less jaded than most w/r to agents). Personally, I wouldn't want to be second-guessing an agent's business model to improve my own income, potentially misjudging the situation and irritating a client (it isn't "free" money). I think there are more obvious ways to improve income, long-term, than messing around with an agent's margin and, if you know your own skills within the market, these margins should take care of themselves, on average.

[Wanderer]

The agent, because it's their business. If you want to benefit from clients that don't know how to price work, then develop the experience or contacts to work direct.

That's an interesting point of view, but I don't agree with giving the middle man a bigger cut just because the client has a generous budget. As a business man, I'm looking to take as much of the client's money for my business as I can.

That said, having a client that can't price work is probably not a good sign.

That's a bit harsh. What we're talking about is a client who will pay 15 to 30% over the market rate for my company's services. There is nothing wrong with them being willing/able to pay a premium, it's just business. I just don't want to see an agency swallow that up...

[jamesbrown]

If a client doesn't understand the market value and is willing to pay 20% over the "market value" for a contractor's services, should the agency get this or the contractor?

The agent, because it's their business. If you want to benefit from clients that don't know how to price work, then develop the experience or contacts to work direct. That said, having a client that can't price work is probably not a good sign.

[Wanderer]

Maybe. It seems to me that negotiating an agent's margin (or business model) might be symptomatic of a contractor not really understanding their own market value and hence aiming to maximise income rather than setting a realistic price for their services.

If a client doesn't understand the market value and is willing to pay 20% over the "market value" for a contractor's services, should the agency get this or the contractor?

[lukemg]

'An agency's margin, and how they want to take it, seems utterly irrelevant to me. '

This can be true, if the supplier is on a PSL and has a controlled margin.
Otherwise, the first time you get a call dropping the rate last minute after you have burnt other bridges (sorry mate, the budget has been cut), only to find the nobber is just increasing his own cut at your expense you will know what rage is.
In addition, you can easily find yourself as the most expensive resource in a position while earning the least in the team ! So guess who is first out when money gets squeezed ?
It definitely does matter, if only to let you know how much headroom you have to push for more coin. Less than 10% is just about tolerable, anything over 15 is a piss take.

[Boo]

Would a transparent fixed fee be a better option than the current model?
Are you even fussed?

Yes, I am fussed and yes, a fixed fee would be better.

How would you calculate what that fee should be?

I would work out what an appropriate hourly rate would be for a 3rd rate salesman/barrow boy and multiply that by the factor of 3-5 hours it takes to spam 10,000 poor contractors with stupid and useless emails talking about jobs that don't even exist.

I'm thinking £3.21 should suffice.

Or they could just give up and go and find a more productive use of their time ?

Boo

[evilagent]

Maybe. It seems to me that negotiating an agent's margin (or business model) might be symptomatic of a contractor not really understanding their own market value and hence aiming to maximise income rather than setting a realistic price for their services.

Quite.
Or maybe symptomatic of a contractor having an over-inflated idea of their market value.

My remark less true for specialist niche players, but more true for generalist or market-saturated arenas.

[jamesbrown]

Your enlightened view is, sadly, not apparently shared by what appears to be either the majority, or vociferous minority, on CUK, as to who "owns" the business, or contract.

Maybe. It seems to me that negotiating an agent's margin (or business model) might be symptomatic of a contractor not really understanding their own market value and hence aiming to maximise income rather than setting a realistic price for their services.

[evilagent]

I won't. Just so long as you didn't tell me or the client that it was 15%.

Oh, I see. Personally, I don't have a problem with that.
That's an easy one.

It's just that many here seem to think they should dictate what the margin is, hence the thread about fixed fees or fixed margins, for clarity.

[Contreras]

Or, if you find out the agent is on a 50% margin, don't complain.

I won't. Just so long as you didn't tell me or the client that it was 15%.

[evilagent]

No. I expect you to negotiate with the client, and with me, in order to maximise your own margin.

And if you ever state to one of us what the other's rate is (or what your margin is) then I expect you not to lie.

Does that help?

That doesn't help, sorry.
Because in order to maximise the agents margin, you are accepting the possibility of feeling hard done by.
Or, if you find out the agent is on a 50% margin, don't complain.

I thought the fixed fee approach would obviate this.

[Contreras]

How about fixed margins then?
Transparent, clearly stated, fixed margins?
Would that be better for contractors?

No. I expect you to negotiate with the client, and with me, in order to maximise your own margin.

And if you ever state to one of us what the other's rate is (or what your margin is) then I expect you not to lie.

Does that help?

[evilagent]

I work direct rather than through agents, but I don't really understand why people get so uptight about an agency's choice of business model. Ultimately, the clients are sourced by the agency, not the contractor, so the business is really theirs. Surely, all the contractor needs to be concerned about is whether the agency is a good one to do business with and whether they are happy with the rate secured. An agency's margin, and how they want to take it, seems utterly irrelevant to me.

Your enlightened view is, sadly, not apparently shared by what appears to be either the majority, or vociferous minority, on CUK, as to who "owns" the business, or contract.

[evilagent]

Who pays the fixed fee?

If the client pays then what if they need to bin the contractor before contract end?

If the contractor pays the fee then what if they need to quit before contract end?

Ah, I see what you did there. Evil agent wins every time.

Why not just reduce the margin after 6 months? Simples.

Damn! You saw right through my devious plan to entrap you.

How about fixed margins then?
Transparent, clearly stated, fixed margins?
Would that be better for contractors?

[jamesbrown]

I work direct rather than through agents, but I don't really understand why people get so uptight about an agency's choice of business model. Ultimately, the clients are sourced by the agency, not the contractor, so the business is really theirs. Surely, all the contractor needs to be concerned about is whether the agency is a good one to do business with and whether they are happy with the rate secured. An agency's margin, and how they want to take it, seems utterly irrelevant to me.