Reply to: Agency Commission Rates

[DodgyAgent]

A guy here had a problem with an agent taking 40% and they refused to negociate. He worked out that the contract and the rule about working for the same client for 6 months after the contract ended were with his LTD company - not with him. He closed down that LTD and started a new one - there were of course some costs but it worked massively in his favour.

I take it you are not a rugby player?

[tvr450]

A guy here had a problem with an agent taking 40% and they refused to negociate. He worked out that the contract and the rule about working for the same client for 6 months after the contract ended were with his LTD company - not with him. He closed down that LTD and started a new one - there were of course some costs but it worked massively in his favour.

[caspercat1]

40% is taking the Mick but then I have seen 50%+ and had immense joy of renegotiating this contract for a Financial Services Client and pinned them down to 20% and even that is bit high but given they were supplying accountants predominately ok.

Depend on market position agency some will change 22% but most around 15% and the small ones will go down to 10% or single digits to get the business and usually at the expense the contractor with extended payment terms.

Bottom line is ask them to be upfront with you regarding margin to client & always check the payment terms, if there any good it is in the interest to be transparent so that you both get the contract.

[IR35 Avoider]

The place where I work requires all contractors to use a particular agency, their preferred supplier. The last time I checked, which was years ago, the agent was getting about 6%. It was 6% of the total contractor payroll, i.e it wasn't negotiated on a per-contractor basis.

[lukemg]

Just so there is no confusion, unless you are working in a field picking cabbages for NMW, you are getting royally f***ed over.
IF the agent did all the work and got you the job, they should take an absolute MAX of 20% for very quick payment (15 is about par, I consider anything over 10 to be robbery and yes it DOES matter what they get).
For a job handed on a plate, I have been told on a couple of occasions by agents that you can get this done for 5% no problem (gives agency an in with the client as a sweetener).
They may have a PSL which will push you in the direction of certain agents but if not, start phoning until you find the cheapest - As long as you don't have a restricted clause in contract with current agency.
If you have to stay with current nobbers, play hard ball for a 30% rise and if you need to have a quiet word with the client if they aren't aware of this markup, they will surely be p***ed off.

[Scrag Meister]

Make sure there are no clauses about changing agents with same client in the contract.

GL with sorting it out. Very frustrating.

I'd open some negotiations with the agent, explaing what you have told us, that you found the role and they are taking 40% which is wholly unreasonable considering that they didn't do the role finding leg work.

[tvr450]

Generic Software

I am looking into this now - changing agent to reduce the fees.

I asked Generic Software Consultants who I have worked through before and they said they would do payroll only for 4%.

[KentPhilip]

Rather than asking on here, why don't you try emailing a few agents at random asking whether they would payroll you at 7%.

They're not going to turn down free money are they?

[realityhack]

Well thanks for all your responses but despite the suggestions of what I should have done I still don't have a recommendation for a decent agent so I can put this right.

If you're happy with your agent and they're not taking 40% please forward me their contact details so I can talk to them. I have a 12 month contract lined up so this is a win/win situation. Thanks guys, I appreciate your help.

Doesn't your client have a payroll agency (like Reed) where the margin's something like 5%? If you're on very good terms with the client I'd angle for going directly through their payroll agency.

[Flyer]

Well thanks for all your responses but despite the suggestions of what I should have done I still don't have a recommendation for a decent agent so I can put this right.

If you're happy with your agent and they're not taking 40% please forward me their contact details so I can talk to them. I have a 12 month contract lined up so this is a win/win situation. Thanks guys, I appreciate your help.

[suityou01]

Just take it up the Gary

Hear hear

[kaiser78]

I've just gone back contracting after 10 years on the payroll and am interested to find out what the average agency cut of the deal is. The agent didn't find me the job but the company insisted they only deal with agents and recommended one to me. All the commercials were negotiated through this agent and I was far from happy with the final offer but didn't really have a choice so took the job.

Because I'm the project manager I now know what I'm being charged out at and found that the agent is taking 40% - YES 40% of the fee!! I'm due to be offerred a 12 month contract extension in the next few weeks and would like to change to an agent who, shall we say, is more reasonable.

Does anyone know what an average cut is and can anyone recommend an agent who would be happy to take a reasonable cut for not having to do any searching for me!

Thanks

As long as you are happy with the rate you are on just turn a blind in what the agent's cut is. Some things in life you cannot change so don't worry about them.

[MarillionFan]

You mean 40% is 200% too much?

She means 32% is Ok.

I'll let you correct me on this. ;-)

[Paddy]

I've just gone back contracting after 10 years on the payroll and am interested to find out what the average agency cut of the deal is. The agent didn't find me the job but the company insisted they only deal with agents and recommended one to me. All the commercials were negotiated through this agent and I was far from happy with the final offer but didn't really have a choice so took the job.

Because I'm the project manager I now know what I'm being charged out at and found that the agent is taking 40% - YES 40% of the fee!! I'm due to be offerred a 12 month contract extension in the next few weeks and would like to change to an agent who, shall we say, is more reasonable.

Does anyone know what an average cut is and can anyone recommend an agent who would be happy to take a reasonable cut for not having to do any searching for me!

Thanks

Bad move especially from someone who has contracted previously. You should negotiate the rate with the client first and then arrange an agent. The last time I did this the agent took 7.5% which was OK as I was paid at the end of each week while he invoiced the client monthly.

[AtW]

40% is excessive (by about 20%)

You mean 40% is 200% too much?