Advice on best way to ask for rate increase...

[TechJinx]

Interested if anyone has had their agency bring out an argument to justify their margin that involved how much it cost them to borrow the money needed to pay contractors before they themselves got paid? (i.e they pay monthly for all invoices receded up to the week before regardless of when they get paid by thinned client)

This got trotted out by mine after 6 months when I enquired about a rate raise by them dropping their margin which is around the 15-16% mark.

I didn't want to move at the time so didn't make a big thing of it but it seemed like a strange argument. I'm personally not bothered if they moved me to 60 days payment terms if it meant I got them to drop their cut.

Anyone else seen this?

[jmo21]

The reason for mentioning the other contractors is because the client has decided they want me rather than the others (they only have a small amount of money left on the project and can't afford to keep all of us). The agency isn't the one who is choosing me, so even though they do have other contractors willing to step in, it's not up to them! It would be an interesting conversation if the agency had to tell the client I didn't renew because they wouldn't reduce their margin (and if the agency were to lie about that, the client will know, because I will tell them)... I was thinking this puts me in a stronger position, not a weaker one...

Easy in theory.

The problem for you comes when the agent tells the client you want more money, and you have another role lined up (regardless whether you do or not).

The client then thinks you are just a money grabber and trying to play them off against another offer, and decide to give another guy the extension before you even hear your extension is off the table.

By the time you try to tell them your side of the story, your name is already mud and it's too late.

But you might be fine :-)

[BrilloPad]

By the time you try to tell them your side of the story, your name is already mud and it's too late.

One should always get retaliation in first.

[jmo21]

One should always get retaliation in first.

Indeed.

Just pointing out a possible scenario.

[rootsnall]

Easy in theory.

The problem for you comes when the agent tells the client you want more money, and you have another role lined up (regardless whether you do or not).

The client then thinks you are just a money grabber and trying to play them off against another offer, and decide to give another guy the extension before you even hear your extension is off the table.

By the time you try to tell them your side of the story, your name is already mud and it's too late.

But you might be fine :-)

WHS/WSS - if it gets even remotely messy then 9 out of 10 client managers don't want to know. Be very selective about when you are going to try it on.

[Antman]

Not much else to add to what's been said, it's hardball time. Lesson learned for me was that it's also much easier to negotiate this before signing anything.

From my experience the agents that talk the most about integrity, transparency are the ones that have a business model based on a level of keeping end-clients, contractors in the dark.

Not to tarnish all agents with the same brush, they are an essential part of our industry.

[rootsnall]

Lesson learned for me was that it's also much easier to negotiate this before signing anything.

+1 with knobs on, you always think you can correct a ropey rate later, but rarely can

From my experience the agents that talk the most about integrity, transparency are the ones that have a business model based on a level of keeping end-clients, contractors in the dark..

Best not mention that group with a letter and number in the name as I think I have seen someone lurking on here ( or I missed the gag )

Not to tarnish all agents with the same brush, they are an essential part of our industry.

currently negotiating on 3 possibles, all via direct contacts, but all have to use an agent

[kaiser78]

Everyone - be careful, as there are 2 issues here, slightly related but also slightly different;

I) what margin is the agent taking
II) what rate is the contractor actually on

Issue II) should be considered regardless of the agency margin and factored in when asking for a rate increase (title of ths thread) - ie what rate do you feel you are worth for the role you are undertaking, regardless of any agency margins.

So I would detach the two issues and concentrate on II) - where I have just successfully taken this approach and achieved a decent rate rise.

[psychocandy]

In your demands, make sure that you make it clear to the agency that you expect the increase to come from their margin being cut rather than them asking the client for an increase.

And they still might ignore you and go to the client and make you look like a right greedy git.

I had that once. Found out agency were taking almost 40% so told them next renewal parties over, cut your rate but dont ask client for more.

So they went to client accidentally on purpose and said ps said he'd leave unless you up the rate by £x. Client was not impressed. I did explain it to them because they were ok but still....

Agents aint daft - they know how to keep hold of their money.

Another guy I knew there got told the day before he started - sorry client budget has been cut. £50 less per day sorry. So he sucked it up.
Found out months later client hadnt said a word so agent had been sticking the £50 in his pocket. Borderline fraudulent and client was a bit put out but its not their money they were losing so agent managed to blag his way out of it.

[zippy.mini]

Thanks All

I shall give this all due consideration and before saying anything, I will make sure that I am willing to walk if I don't hear the answer I want. I believe I am easily worth what I want - both skills and role wise. I thought originally that perhaps the client was just one of those clients that don't pay as much as the big boys, but now I know they do actually pay the right money it's just the agent takes the big cut, it changes my view somewhat. Especially as I think there could be plenty of repeat work.

It still begs the question - is it bad form to let the agent know that I know what cut they are taking when\if I start negotiations? Is it helpful or counter-productive?

The hiring manager here is also very approachable so I was wondering whether to ask him if he knows whether they are on a fixed rate before mentioning anything?