Agency Rates - Full Disclosure

[hildaoblivion]

Hi All

Im seeing a LOT of discrepancy on rates offered by Agencies for the same role.
anything from 400 per day to 650.

Its obvious that the same client will be paying the same amount to an agency - so really this comes down to the markup that the Agent gets.

Now to me its in the interests of the client to get as much of the 'value' going to the contractor.
Means they are less likely to walk, will get a higher priced resource instead of a crap one.

To the contractor we'd rather get more money than less.

Its only the agent that wants to obfusticate things.

But cant we get aorund this - create a full disclosure site where Agencies show the positions and their markup?

Clients can check which agencies are taking the proverbial and so know hiw much budget goes into the guys that do the job and how much to the middle man.

We can all see (including newbies) who to avoid.

Im not saying that all Agencies will charge the same.
As a client I may be happier to pay more to an Agency that gets me good candidates quicker.
As a contractor I may be happier to give them a bigger cut if I get paid quicker etc.

But it will remove uncertainty from both the buyer and the seller - more transparency, more competition, better market results.

ANy thoughts - can we take this forward?

Hilda

[NotAllThere]

This has been discussed endlessly here. Half the pack think it doesn't matter, so long as you get the rate you want, the other half feel that it can cause real issues.

Your post therefore targets the latter.

Here's the problem: the agency won't do it voluntarily, and the clients who are in the former category (above) won't force them; they perceive no issue.

Having said that, I've usually found out the margin at some point during the contract. If that was published, it would help - but it might be considered commercially sensitive information that I've not actually got a right to, which could land me in trouble.

I can't see it happening.

[Support Monkey]

Hi All

Im seeing a LOT of discrepancy on rates offered by Agencies for the same role.
anything from 400 per day to 650.

Its obvious that the same client will be paying the same amount to an agency - so really this comes down to the markup that the Agent gets.

Now to me its in the interests of the client to get as much of the 'value' going to the contractor.
Means they are less likely to walk, will get a higher priced resource instead of a crap one.

To the contractor we'd rather get more money than less.

Its only the agent that wants to obfusticate things.

But cant we get aorund this - create a full disclosure site where Agencies show the positions and their markup?

Clients can check which agencies are taking the proverbial and so know hiw much budget goes into the guys that do the job and how much to the middle man.

We can all see (including newbies) who to avoid.

Im not saying that all Agencies will charge the same.
As a client I may be happier to pay more to an Agency that gets me good candidates quicker.
As a contractor I may be happier to give them a bigger cut if I get paid quicker etc.

But it will remove uncertainty from both the buyer and the seller - more transparency, more competition, better market results.

ANy thoughts - can we take this forward?
Hilda

And now back to the real world, it's never gonna happen

[Gentile]

It's a difficult balancing act to get right. You might be right that the client would pay the same to each agency, and some of them are just looking to fleece you more than others for rendering their services as an agency.

Or it could be the case that a given gig has been sourced and priced competitively by one agency. Then another agency has called that original agency up under the auspices of being an interested contractor, found out who the client is, and advertised the role themselves. Once they know who the client is, it's an old trick to advertise the exact same role, whilst adding a bit on to the rate to ensure that the best candidates go to them first. They then send your CV to the client unsolicited, which may work or may simply make you both look bad.

You only really know what's what if you keep a very close eye on the market over time. See who's advertising which roles first; see which roles appear with the exactly same keywords and geographic location but a slightly re-jigged JD. After a while, you get a feel for which adverts are real, and which ones are just copycats, created by total chancers with big dreams but no relationship whatsoever with the client and no realistic prospect of getting you the gig.

[Antman]

The point you've raised is valid but unfortunately the agency business model is based on not telling the truth besides what they might say about integrity etc.

What you've suggested isn't going to work, it's going to be a question of experience gained from many contracts to work out where your rate lies. In that space between what you'll work for and what the client will pay for will keep many a spiv in series 1 BMWs until you retire.

That's the way the world is.

[Gentile]

The point you've raised is valid but unfortunately the agency business model is based on not telling the truth besides what they might say about integrity etc.

What you've suggested isn't going to work, it's going to be a question of experience gained from many contracts to work out where your rate lies. In that space between what you'll work for and what the client will pay for will keep many a spiv in series 1 BMWs until you retire.

That's the way the world is.

I didn't actually make any suggestions above. Only observations.

It's for each of us to consider the information we accrue in relation to our own particular circumstances, experience and gut feel. Sometimes it's worth going with the best rate being quoted, sometimes it's best to go with the agency you feel is most likely not to waste your time. Sometimes, where there's a bun fight going on that you don't want to get involved in, it's best just to call the client and introduce yourself, then let them decide which agency to use. It's generally not that hard to work out who the client is without needing to speak to anyone – all you need do is look at the pimp's LinkedIn profile and cast your eyes over to the "viewers of this profile also viewed" panel and see which profile matches the role spec.

[Antman]

I didn't actually make any suggestions above. Only observations.

It's for each of us to consider the information we accrue in relation to our own particular circumstances, experience and gut feel. Sometimes it's worth going with the best rate being quoted, sometimes it's best to go with the agency you feel is most likely not to waste your time. Sometimes, where there's a bun fight going on that you don't want to get involved in, it's best just to call the client and introduce yourself, then let them decide which agency to use. It's generally not that hard to work out who the client is without needing to speak to anyone – all you need do is look at the pimp's LinkedIn profile and cast your eyes over to the "viewers of this profile also viewed" panel and see which profile matches the role spec.

Apologies, I was referring to the OP. I was just giving an opinion but your information was very useful, I'll definitely use it.

[Gentile]

Apologies, I was referring to the OP. I was just giving an opinion but your information was very useful, I'll definitely use it.

Sorry, my misunderstanding.

[BolshieBastard]

I've recently seen roles for my specialism in my locality paying as much as 50% more than what is the normal rate for the same.

Its clear these are just fishing exercises by agents to get more cv's and hence the possibility of new leads. There is just no way roles are going for these rates where I am.

In all my time contracting, I only ever had one client ask me to confirm my rate with them. At first I was a little uncomfortable with this but they said it was so they could confirm the budget they'd given the client and to make sure the agent didnt take an excessive mark up. Seemed reasonable to me.

Fact is, when you go for any role, you dont know how much the agent really is holding back. I agree if you get the rate you asked for, you tend to be happy with that. But, if you later find out the rate you asked for was based on incomplete information, either what the role actually entailed or in these circumstances, what the true budget was, I think you have every right to now be unhappy with a rate you were previously happy with.

What I cannot fathom is why clients are happy to get ripped off by agencies creaming £100 - £150 a day off for themselves. Let's face it, agencies do **** all once they have sourced the contractor for the role. They cant tell me their joke of a payments system and admin (which now means the contractors has to provide envelops, stamps etc to submit timesheets et al) cost £500 a week (ie £100 a day 'margin') to provide.

Until clients change their mindset how they pay the agents nothing will ever change.

[IR35FanClub]

What I cannot fathom is why clients are happy to get ripped off by agencies creaming £100 - £150 a day off for themselves. Let's face it, agencies do **** all once they have sourced the contractor for the role. They cant tell me their joke of a payments system and admin (which now means the contractors has to provide envelops, stamps etc to submit timesheets et al) cost £500 a week (ie £100 a day 'margin') to provide.

Until clients change their mindset how they pay the agents nothing will ever change.

That’s the situation I just found myself in – found the agency margin is £70/day coz some numpty mailed me a copy of the agency contract with the end client along with my renewal documents – so I saw the end rate.

Now I’m in a great position to negotiate – as a guy I’d worked with previously asked me to come and do the job– no recruiting was done and no interview was required – the agency are there simply as all contractors have to go through the agency on a typical “prime resource supplier” basis for all agency staff whether they are “High Paid Contractors” or temporary cleaners and admin staff.

Currently – I’m effectively funding a fulltime admin person or lease payments on 4x1 series BMW’s depending on which way you look at it, basically to pay me my invoice (that I generate on a 30 day payment basis) once per month.

What I’m not sure of is what a reasonable margin is for them, given that I don’t need self billing/invoice factoring etc. Would £5/month cover it you reckon? LOL. As in – when I buy something from Ying and Yang Trading Co (I buy stuff from China in another business I run) – they don’t charge me £1,500 to raise the invoice – it is part of the products £15 to £30 cost.

I don’t have a problem in companies having mark up if they add value like taking raw plastic and turning it into widgets, or using human labour to provide customer service, but in the case of the agency – they do nothing. Zero. Nada. Well actually – they take my monthly invoice, add £1500+ to it and send it on. 5-10- minutes work max! LOL.

Plan B is to buy myself out the contract. Just checked and it’s £4,000. But as I’ve been offered a 6 months extension they’d would have taken £5,500. So a saving to me of £1,500 plus any other future extensions (which are likely).

So back to the original post …

Rather than transparency it seems there’s a market for a new agency to have a fee based charging structure that would introduce some competition
I.e.
Charge end client £n,nnn finder fee. 4 figures. Same costs as finding a permie presumably. (in my case this would have been waived as they didn’t find me).
Charge contractor £x contract set up fee. Couple of hundred at most : validate your company, get references in, set you up on their payment systems.
Charge contractor monthly invoicing self billing fee if you need it. Couple of quid.
Offer contractor invoice factoring service – if required x% of invoice fee.

That then is transparency. You pay for what you use. What we get at the moment is a bit like going into Curry's to buy a TV and instead of letting you make a cash purchase, they make you take a loan, extended warranty and also throw in payment protection insurance. So instead of getting the TV for £600 you get it for £75 a month until you decide to get a new TV. LOL.

But as we know – it won’t happen unless some bright soul reading this decides to enter the market and do everything a new way.