New Veteran

[Freud]

Hi all,

I am new to this forum although I have dipped in to read stuff over the years.

I was a career permie for a very long time and in that time employed many contractors but now I have defected.

I left my permie role a few years back and have been doing a lot of consulting work through my old contacts.

I have just secured a new contract role, again through a contact of mine, but his company's HR department want me to provide my services to them through their preferred agency, who I imagine will charge a nice commission on top.

This has now lead me to these forums as I have never had to work through an agency before and a little wary about what I might be signing up to !

I say I am wary as my primary experience with agencies was sitting on the other side, recruiting.
Apart from a handful, I found that many were just CV farms and didn't provide any real value to me as the recruiter.

Looking forward to becoming part of the community here

[northernladuk]

I was a career permie for a very long time and in that time employed many contractors but now I have defected.

Don't be a hater. You've changed your model. The permies provide a service to their employers, you now provide a different service though a different model. Doesn't make you any better or worse than them. They are your clients now. I know you say it tongue in cheek but you'd be surprised the number of contractors that have a poor attitude to their clients and agents and it shows.

I have just secured a new contract role, again through a contact of mine, but his company's HR department want me to provide my services to them through their preferred agency, who I imagine will charge a nice commission on top.

They will but there are a number of factors here. Firstly it's up to you to negotiate that commission down. You need to understand what agents do and how they work. Some are on fixed margins which can be as low as 6% and there is nothing you can do. Others you will have to negotiate with. 10-14% seems to be a number banded around for an agent with a decent client and a number of contractors on site. I can't see why it should be around that level when they've done no work to get you in. It also depends on the rate. If you are on £200 a day they have to charge a higher percentage to make enough a day to make it worth taking you on etc.

This has now lead me to these forums as I have never had to work through an agency before and a little wary about what I might be signing up to !

It's good to be wary. They play a lot of tricks as they are, in the main, just sales people. Plenty of resources on here to use. I'd suggest you learn the search method in the sticky in this very part of the forums. Every trick they pull has been discussed here ad infinitum. There is even a sticky about the 2 references thing they try on some people and so on. Again, don't be a hater. They are an essential part of what we do so learn to play them, don't just hate them. It's gonna make your career long and painful if you don't get to grips with them.

I say I am wary as my primary experience with agencies was sitting on the other side, recruiting.
Apart from a handful, I found that many were just CV farms and didn't provide any real value to me as the recruiter.

But they also provide factoring as it is likely their payment terms from the client is much longer than the one you have with them and so on. There have been plenty of threads about what value agencies offer so again the search as mentioned above is your friend.

Looking forward to becoming part of the community here

I'm sure you are but do you like gladiators?

[BrilloPad]

A very warm welcome

[WTFH]

Welcome, New Veteran/Freud.

[northernladuk]

A very warm welcome

Steady on old boy. I thought the warm welcomes were NLYUK's speciality?

[Freud]

Thanks to everyone for the welcome.

Don't be a hater. You've changed your model. The permies provide a service to their employers, you now provide a different service though a different model. Doesn't make you any better or worse than them. They are your clients now. I know you say it tongue in cheek but you'd be surprised the number of contractors that have a poor attitude to their clients and agents and it shows.

I am not a hater. Not sure how that would come across from my 'defecting' comment - no issue with either side, probably should have said "double agent"

They will but there are a number of factors here. Firstly it's up to you to negotiate that commission down. You need to understand what agents do and how they work. Some are on fixed margins which can be as low as 6% and there is nothing you can do. Others you will have to negotiate with. 10-14% seems to be a number banded around for an agent with a decent client and a number of contractors on site. I can't see why it should be around that level when they've done no work to get you in. It also depends on the rate. If you are on £200 a day they have to charge a higher percentage to make enough a day to make it worth taking you on etc.

Uh, not sure why I need to negotiate the agency commission?
I have agreed my rate direct with the client. I am assuming the agency will add on the their perecntage on top, based on the overarching 'management agreement' they have with their client.
Is this correct ? Am I missing something ?

[LondonManc]

Welcome.

I was in a similar situation last year - client wanted me back and rang me but I had to go through their in-house agency. They take a cut from the point of view of admin costs and providing a service to the client. They don't take a cut from you, though - if you're on £500/day, you'll get your £500/day + VAT. They'll add a fee to the client, which the client benefits from by not having to manage the screening process, dealing with all the individual contractor limited companies and so on.

Don't worry about it - you'll simply get your money sooner, that's the only real difference that you'll notice.

[northernladuk]

I am not a hater. Not sure how that would come across from my 'defecting' comment - no issue with either side, probably should have said "double agent"

It's a bugbear of mine so would have probably mentioned the same to double agent as well. You are business supplying your services. I don't like these terms. Probably just me.

Uh, not sure why I need to negotiate the agency commission?
I have agreed my rate direct with the client. I am assuming the agency will add on the their perecntage on top, based on the overarching 'management agreement' they have with their client.
Is this correct ? Am I missing something ?

Hmm, you are probably right. Sounds odd the client has agreed a day rate when your contract will be with the agency. You have no contractual relationship with the client so would have said it's not for them to agree rates normally. They probably have a fixed rate agreement so you'll get paid that but the client will by x% more. If that is the case then fair enough you are probably ok in that situation.

A normal situation is the client pays the agency £xxx per day. The agency then keeps a percentage for themselves and you get the rest. If this is the case then it's down to negotiation between you and the agent to get the best deal. You are getting the agents money, not the clients if that makes sense.

[Freud]

Welcome.

I was in a similar situation last year - client wanted me back and rang me but I had to go through their in-house agency. They take a cut from the point of view of admin costs and providing a service to the client. They don't take a cut from you, though - if you're on £500/day, you'll get your £500/day + VAT. They'll add a fee to the client, which the client benefits from by not having to manage the screening process, dealing with all the individual contractor limited companies and so on.

Don't worry about it - you'll simply get your money sooner, that's the only real difference that you'll notice.

Thanks. That is exactly how I assume it works.

When I was a permie, we had a similar arrangement with an agency. Main reasons at the time were off-loading the admin but also wanting a level of separation so as to avoid any potential claims to benefits, redundancy etc.

[Freud]

It's a bugbear of mine so would have probably mentioned the same to double agent as well. You are business supplying your services. I don't like these terms. Probably just me.

I had better watch my wording then

A normal situation is the client pays the agency £xxx per day. The agency then keeps a percentage for themselves and you get the rest. If this is the case then it's down to negotiation between you and the agent to get the best deal. You are getting the agents money, not the clients if that makes sense.

Yep, that would be how it works if you are applying for a role through an agency. In my case it is direct so I guess the client has the option of contracting direct with me or through an agency. It seems they prefer doing it all through an agency and paying their fee