Offered job as an agency employee rather than a direct employee.

micmclo

Registered User
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Hi there,

A few weeks ago I applied direct to a large bank/funds/IFSC type company. I applied direct on their website. The job was for a 6 month contract. While I hope to become permanent one day I saw it as a "foot in the door" and I'll do my best to get extended and successful on that team or maybe another team

Two weeks after the interview I asked HR for an update. They said the job was on "standby" which I guess means budget signoff or something. A few days later HR called and offered me the job yaaaay

......however they said I would work for an agency and not be a direct employee. They said the terms and conditions and salary are mostly the same but I would not work for them. I said I applied direct on their website and not through the agency and HR said this was how it would be

Why does a company do this? I will take the job anyway but I wanted to work for them. Now an agency gets a cut of my salary each week and they did zero to even get me the job. I find this confusing
thanks
 
There may be certain benefits such as pensions which you won't qualify for as an agency employee.

The main reason though is a mistaken belief by the employer that it in some way reduces your employment rights. They are the same for major issues like unfair dismissal. If you are there for one year, you are protected as the bank is your employer.

Brendan
 
Why does a company do this? I will take the job anyway but I wanted to work for them. Now an agency gets a cut of my salary each week and they did zero to even get me the job. I find this confusing
thanks


Did they tell you in the interview you would be employed directly? you did,nt specify in post

No pension rights from employer, redundancy package would only start from employment date with Bank directly.

If they have standard contracts inhouse, this is a way of bypassing.
 
Hi,

I wasn't told about my contract in the interview. That's more of a HR issue. I just discussed with the hiring managers all my amazing personal and technical skills ha. Agency or directly employed never came up.

It was two and half weeks after the interview that HR told me I would work for an agency. I wasn't expecting this, I applied direct on their website, thanks

Now HR asks my permission to forward my CV to the agency and I have to wait for the agency to draw up a contract. All of this happening after my application, after my interview and after they decided they want to hire me.

Bizarre !
 
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This is not unusual for a contractor. The company may have preferred suppliers that they get their resources via and its less hassle and risk for them to hqve an agency or consultancy be the provider of the resources

Bear in mind now that you have the upper hand. The company wants you and they will tell the agency that they found you and want to take you on. You have the opportunity now to negotiate.
 
redundancy package would only start from employment date with Bank directly.

Not so unless things have changed recently. Your employer is the bank and not the agency for such purposes.

It's quite possible that the employer hopes that most people don't understand this.

Brendan
 
From your first post
The job was for a 6 month contract.
You never were applying to be a direct employee. I assume was a daily rate contract?

It's probably easier for the company to be invoiced by one agency, rather than separate invoices for each contractor.
Is the daily rate paid to you changing? By how much?
 
Ah, I had missed the 6 months contract.

Then it doesn't matter to the employee whether it is through an agency or not.

Brendan
 
Hi yes it’s a contract but over my career I’ve seen plently on fixed term contracts with the employer. Many hoped to progress to a permanent contract and that is me too. In fact my last job was a 12 month fixed term contract with a company but alas I never got extended. I’ve never worked with an agency ever

You can work on a fixed term contract for an employer and have nothing to do with an agency

Daily rates are IT people, I’ve never done that at all
 
Most of the large finance / tech companies including the one I work for are using this structure. They have effectively outsourced the administration of contractors with an added benefit of an extra layer of protection against contractors making claims to be full time employees of the company. Many of these multinationals will retain about 10% variable staffing to accommodate changing priorities or projects being cancelled.

It is quite common for these same companies to later convert these contractors to full time employees if they are good and the permanent headcount capacity is there. I know if one that sources a large portion of its full time staff this way.

If your goal is to secure full time employment with this company, there is nothing to fear with this approach, but don't start playing silly buggers and trying to re-negotiate anything that has already been agreed. That will stick in the memory when your initial term is up.
 
Most of the large finance / tech companies including the one I work for are using this structure. They have effectively outsourced the administration of contractors with an added benefit of an extra layer of protection against contractors making claims to be full time employees of the company. Many of these multinationals will retain about 10% variable staffing to accommodate changing priorities or projects being cancelled.

It is quite common for these same companies to later convert these contractors to full time employees if they are good and the permanent headcount capacity is there. I know if one that sources a large portion of its full time staff this way.

If your goal is to secure full time employment with this company, there is nothing to fear with this approach, but don't start playing silly buggers and trying to re-negotiate anything that has already been agreed. That will stick in the memory when your initial term is up.

Same in my company. We've an arrangement with the agency that if we like the person then at some stage towards the end of the 6 months we'll convert them to perm for a small fee. In effect, it's a "try before you buy" Our model is 75% perm, 25% agency

Note the agency is not taking a portion of the employees wages, the company is paying that percentage. Personally speaking I started as an Agency temp for 3 weeks many years ago and 10 years later was a manager with 30 staff.
 
Not so unless things have changed recently. Your employer is the bank and not the agency for such purposes.

It's quite possible that the employer hopes that most people don't understand this.

Brendan


Brendan

Are you sure about this?

I know many people who were contract staff to employers before getting direct employment, and were only paid for direct employment years .... I would be interested to find out more about this if you had time to update
 
Hi,

I wasn't told about my contract in the interview. That's more of a HR issue. I just discussed with the hiring managers all my amazing personal and technical skills ha. Agency or directly employed never came up.

Given it's a 6-month contract, I'd accept and follow whatever procedures they want, even if that includes through an intermediary. You’re negotiating power comes at the end of 6 months: if you ant to stay you can argue the case then for being made a permanent direct employee. That assumes you’re actually good at the job, of course.... :)

No sense in creating waves before you even join.
 
OP here

I wasn’t entirely happy about being put on an agency contract when I had applied direct to the company. If I wanted to be an agency temp I could have gone to the agency myself.

Anyway after two weeks HR came back and gave me a contract direct with them. Salary is the same

It’s still six months fixed term so I better nail my probation and be a star. I get private health insurance now and after probation/extension can participate in the pension scheme

Happy ending
 
General comment
Not so sure most companies progress people from contracts to permanent roles. The use of contractors versus Full Time Employees is a common tactic to preserve the 'Revenue per FTE' numbers reported to the SEC every quarter. American companies sometimes 'bench' their contractors at the expiry of a contract i.e. not use them in any capacity for 3 months before re-using them, to avoid an uptick (downwards slide) in the Revenue per FTE number, there's probably a SEC definition somewhere of what constitutes a FTE for their reporting purposes.
 
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