Contracting and agency commission
- Thread starter shnaek
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Brendan Burgess
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Hi Shanaek
Can you explain exactly what you mean and I will give an opinion.
Brendan
Can you explain exactly what you mean and I will give an opinion.
Brendan
Hi Brendan - I mean that for example if you were on a rate of 275 per day that your agency is charging 350 per day for your services to companies. I have friends who contract and they constantly advise me that agencies are not to be trusted, and they push your rates down while pushing what they charge companies up. I recently discovered what my agency charge for my services, so I was wondering is it in line with normal charges. According to UK sites agencies charge between 12% and 20%.
Not sure what type of contracting you are talking about. I am an IT contractor. The rate charged depends on the agency. Some (the more reputable) tell you what the charge some don't. The last agency I worked for (CPL) were charging approx 15% (rounded to nearest EUR 10). Basically if the agency is charging 350 you should be getting 300. Sounds like you got stung by quoting/agreeing to too low a rate. Not sure there's much you can do if you've signed a contract for X months but you have some powerful info for negotiating if an extension is offered.
OneAndOnly
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How have you been stung?
I've been an IT contractor for 12 years and it never ceases to amaze me how newbies go harping on about agencies commission.
I assume you read your contract when you signed it, this would have stated a rate - if you were not happy with that rate then you shouldn't have signed, simple as that. What the agency charges the client is none of your concern....
The above may seem harsh but thats the way it is.. client needs a job doing, goes to agency A and says I can pay X per day/hour. The agency will do almost everything to keep as much of X as possible. Your contract is with the agency NOT the client, so its up to you to negotiate how much of X is up for grabs - be ruthless, be prepared to walk away and you'll benefit in the long run.
I've gotten agents to go as low as 5% and yet been stuck at 20% for a whole year. Its all about your skills, length of contract and current state of the market. It also helps to assume that ALL agents are several rungs below car sales people when it comes to honesty.
I've been an IT contractor for 12 years and it never ceases to amaze me how newbies go harping on about agencies commission.
I assume you read your contract when you signed it, this would have stated a rate - if you were not happy with that rate then you shouldn't have signed, simple as that. What the agency charges the client is none of your concern....
The above may seem harsh but thats the way it is.. client needs a job doing, goes to agency A and says I can pay X per day/hour. The agency will do almost everything to keep as much of X as possible. Your contract is with the agency NOT the client, so its up to you to negotiate how much of X is up for grabs - be ruthless, be prepared to walk away and you'll benefit in the long run.
I've gotten agents to go as low as 5% and yet been stuck at 20% for a whole year. Its all about your skills, length of contract and current state of the market. It also helps to assume that ALL agents are several rungs below car sales people when it comes to honesty.
OneAndOnly said:
I would have thought 'stung' was a fitting description of the situation. Even going by what you have said above. For example, you go to a car dealer to buy a car. He asks for 10K. You pay 10k. Then you meet the guy who sold the dealer the car and find he sold it for 5k. Would 'stung' not fit there? Anyway, whatever the 'feeling' is when something like that happens to you is what is meant by 'stung' in this case, but if you have a better word for it, or if you feel absolutely nothing when something like this happens then cool.
I will remember this!OneAndOnly said:
I've more sympathy for OneAndOnly's position on this one being an IT contractor myself for a while. I don't care what the agency makes as long as they secure a decent rate for me. I'd rather get 500 a day from an agency making 40% than 250 a day from one making 5%. If an agency offered me 1200 a day and managed to get a client to pay 5000 a day, I'd happily take it and you wouldn't hear any grumbling about being stung; I'd be full of praises for them.
If you hadn't found out how much the agency were getting for you, you wouldn't be bothered about it at all and you'd be happy with your daily rate. If your agency can manage to get a client to pay 30% more than you're charging them, then I'd suggest it's your fault - you sold yourself too cheaply. To use your car analogy, if I went to a garage to sell my car and asked for 5k for it and they agreed, I wouldn't see any basis for being indignant that they managed to sell the same car for 10k. It would have been my fault for not finding out what the car was worth.
Yes it's harsh I guess but you're not an employee any more and you have to fight for the deals you get.
If you hadn't found out how much the agency were getting for you, you wouldn't be bothered about it at all and you'd be happy with your daily rate. If your agency can manage to get a client to pay 30% more than you're charging them, then I'd suggest it's your fault - you sold yourself too cheaply. To use your car analogy, if I went to a garage to sell my car and asked for 5k for it and they agreed, I wouldn't see any basis for being indignant that they managed to sell the same car for 10k. It would have been my fault for not finding out what the car was worth.
Yes it's harsh I guess but you're not an employee any more and you have to fight for the deals you get.
OneAndOnly
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Shnaek,
I'd still argue that you haven't been stung. You did not negotiate your contract correctly. Don't get hung up about it - happens to us all with our first contract(s). Just make sure you learn and do it right next time around.
Once you get an offer insist that the agent tells you the client rate. They will say they can not, legal reasons etc, they may get angry, threaten to blacklist you and a whole host of other crap. If the market is good, tell them to stick it so, you've interviews lined up next week anyway!
They will come back to you (the speed of which determines how desperate they are!) the hard work is done, the client wants you, the agent knows that x% is better than 0%. Once you know their margin you have to try and knock it down.. again a whole of tactics come into play here.
BTW getting stung is when you work for a week/month and the agency goes bust just as you send you invoice in - client has already paid and rightly is not prepared to pay again....
I'd still argue that you haven't been stung. You did not negotiate your contract correctly. Don't get hung up about it - happens to us all with our first contract(s). Just make sure you learn and do it right next time around.
Once you get an offer insist that the agent tells you the client rate. They will say they can not, legal reasons etc, they may get angry, threaten to blacklist you and a whole host of other crap. If the market is good, tell them to stick it so, you've interviews lined up next week anyway!
They will come back to you (the speed of which determines how desperate they are!) the hard work is done, the client wants you, the agent knows that x% is better than 0%. Once you know their margin you have to try and knock it down.. again a whole of tactics come into play here.
BTW getting stung is when you work for a week/month and the agency goes bust just as you send you invoice in - client has already paid and rightly is not prepared to pay again....
I'm not hung up on it at all. I'm happy out where I'm working. Guess I was listening a bit much to friends who are contracting and saying, like you guys, that you have to negotiate tough. So I started the thread just to check the normal margin so I can negotiate better next time. Cheers for the advice.