Finding out the rate being charged?

[LondonManc]

Just thought I'd my own experience on this one, its been a particular bone of contention in the teams I've worked in.

In the contract before this one, there was 2 of us recruited to do the same role via the same agency.
A few days in, in general conversation, he asked me what rate I was, I told him £250, he said he was on £200. He was not pleased, he was much better than me, knew everything about everything! Turns out Agency had asked him what is lowest rate would be, he wanted to secure the contract so went in low. He was pretty cool about it, agency was annoyed that us contractors are discussing rates - dumb agency should have known if you recruiting people for the same team its bound to happen. None of us knew how much we were being charged out to the client though, we often wondered how much they would be making on top.

In my last contract, I joined a team with other contractors who had been there a few months already. First day at lunch, talk immediately turned to how bad this agency was. One of the guys said he was beaten down to £200 per day to secure the contract. He said the agency had basically told him if he wanted to secure the contract this would be the rate he would have to accept. He became quite friendly with the permie staff and managers and saw the paperwork what the agency were charging the client, £400 per day!, the agency were creaming off double! He was livid to say the least, the client didn't know how much the contractors were getting and thought he was getting close to £350. Because the contractor had become integral to the team and built up such morale within, the manager did not want to let him go and had a right go at the agency, the agency promptly put up his rate.

There really needs to be a lot more transparency of agency fees/cuts. The agency cut should be separate and not eat into the rate of the contractor. The current state of play only leads to a barrel load of issues.

I have seen similar. It's not nice. Then they wonder why they get referred to as pimps!

[Danglekt]

This is why I love going direct

[TheFaQQer]

In the contract before this one, there was 2 of us recruited to do the same role via the same agency.
A few days in, in general conversation, he asked me what rate I was, I told him £250, he said he was on £200. He was not pleased, he was much better than me, knew everything about everything! Turns out Agency had asked him what is lowest rate would be, he wanted to secure the contract so went in low.

He offered a discount to ensure that he got the work. In the same way that I told the guy that did my gates that I'd had other quotes that he'd need to beat and he came back a lot cheaper than the others.

That's business.

He was pretty cool about it, agency was annoyed that us contractors are discussing rates - dumb agency should have known if you recruiting people for the same team its bound to happen.

Really? I've never worked with anyone where we've discussed rates with each other.

There really needs to be a lot more transparency of agency fees/cuts. The agency cut should be separate and not eat into the rate of the contractor. The current state of play only leads to a barrel load of issues.

The agency doesn't eat into the rate of the contractor - the client pays everything to the agent, and the contractor eats into that. The size of the bite that you take is what matters, so you need to maximise that and not worry about what other people earn.

[moneymoney]

Just thought I'd my own experience on this one, its been a particular bone of contention in the teams I've worked in.

In the contract before this one, there was 2 of us recruited to do the same role via the same agency.
A few days in, in general conversation, he asked me what rate I was, I told him £250, he said he was on £200. He was not pleased, he was much better than me, knew everything about everything! Turns out Agency had asked him what is lowest rate would be, he wanted to secure the contract so went in low. He was pretty cool about it, agency was annoyed that us contractors are discussing rates - dumb agency should have known if you recruiting people for the same team its bound to happen. None of us knew how much we were being charged out to the client though, we often wondered how much they would be making on top.

In my last contract, I joined a team with other contractors who had been there a few months already. First day at lunch, talk immediately turned to how bad this agency was. One of the guys said he was beaten down to £200 per day to secure the contract. He said the agency had basically told him if he wanted to secure the contract this would be the rate he would have to accept. He became quite friendly with the permie staff and managers and saw the paperwork what the agency were charging the client, £400 per day!, the agency were creaming off double! He was livid to say the least, the client didn't know how much the contractors were getting and thought he was getting close to £350. Because the contractor had become integral to the team and built up such morale within, the manager did not want to let him go and had a right go at the agency, the agency promptly put up his rate.

There really needs to be a lot more transparency of agency fees/cuts. The agency cut should be separate and not eat into the rate of the contractor. The current state of play only leads to a barrel load of issues.

very interesting

I suspect something similar has happened in my instance. It was my first contract, I was keen to get in so dropped my rate by £50, which I'm pretty sure the pimp pocketed. All the more reason why I would now like to squeeze it out of them, and will certainly try to come renewal.

[northernladuk]

A few days in, in general conversation, he asked me what rate I was, I told him £250, he said he was on £200. He was not pleased, he was much better than me, knew everything about everything! Turns out Agency had asked him what is lowest rate would be, he wanted to secure the contract so went in low. He was pretty cool about it, agency was annoyed that us contractors are discussing rates - dumb agency should have known if you recruiting people for the same team its bound to happen. None of us knew how much we were being charged out to the client though, we often wondered how much they would be making on top.

Never discuss rates with other contractors. For a start only an idiot will tell you the truth and if you don't like what you hear it could turn a contract that you are currently happy with in to a nightmare you can't stand anymore. It's your business, no one else's.

In my last contract, I joined a team with other contractors who had been there a few months already. First day at lunch, talk immediately turned to how bad this agency was. One of the guys said he was beaten down to £200 per day to secure the contract. He said the agency had basically told him if he wanted to secure the contract this would be the rate he would have to accept. He became quite friendly with the permie staff and managers and saw the paperwork what the agency were charging the client, £400 per day!, the agency were creaming off double! He was livid to say the least, the client didn't know how much the contractors were getting and thought he was getting close to £350. Because the contractor had become integral to the team and built up such morale within, the manager did not want to let him go and had a right go at the agency, the agency promptly put up his rate.

There really needs to be a lot more transparency of agency fees/cuts. The agency cut should be separate and not eat into the rate of the contractor. The current state of play only leads to a barrel load of issues.

This is just a tale of peoples failure to secure the best rate. Doesn't need to be any transparency at all. That's for the general public that don't know what they are doing. You are in a B2B negotiation and you sell your skills at the price you want. Agent wants the best cut, you want the best rate. You thrash it out together. What anyone else does is irrelevant and non of your business.

[tomtomagain]

OK ... I haven't read the in's and out's of this thread.

But if I wanted to find out the rate I was being charged to the end client I wouldn't bother approaching the agent. They aren't going to tell you. Why would they weaken their negotiating hand come next renewal?

If you are on a project and it is being managed there will be a budget somewhere. Simply find the project manager, befriend him and then politely tell him you are interested in becoming a PM but don't understand budgeting and planning. Ask him to take you through the plan and budget.

All good PM's have their own private little Excel spreadsheet with the costs in. Your full cost will be in there somewhere.

[northernladuk]

OK ... I haven't read the in's and out's of this thread.

But if I wanted to find out the rate I was being charged to the end client I wouldn't bother approaching the agent. They aren't going to tell you. Why would they weaken their negotiating hand come next renewal?

If you are on a project and it is being managed there will be a budget somewhere. Simply find the project manager, befriend him and then politely tell him you are interested in becoming a PM but don't understand budgeting and planning. Ask him to take you through the plan and budget.

All good PM's have their own private little Excel spreadsheet with the costs in. Your full cost will be in there somewhere.

The rate used for a person doing what you are on a project isn't always the rate you are being paid though?

[tomtomagain]

The rate used for a person doing what you are on a project isn't always the rate you are being paid though?

No. But it often is.

When I was a PM I asked for and was usually given the actual costs for staff and contractors rather than the rate paid to the individual. As PM you don't really care what the contractor gets, you care about how much you are paying for him. How else are you going to make sure you are in budget?

It's not uncommon for a "blended" rate to be used though. For example in the BigOil Co I worked at for many years we always used an "internal cost" of $1200 per day for contractors in other departments and $250k per year for permies.

But I don't really think knowing your charge-out rate is useful. You agree a rate with the agent, and presumably it's acceptable ( otherwise, you wouldn't accept it. ) and how much the agent makes is immaterial in most cases.

It might feel like "He's robbing me of 20%" but you have no idea of his costs and the costs he has incurred to get a contractor placed.

And it might feel like he's getting money for nothing, but you really want your agent making money. Believe me, its a lot less painful than working for agents who are losing money.


* * Spare a thought for the poor old consultant. They normally get charged out at 25 - 30% above a contractors rate, but only get around 50k in salary. And when times get hard for consultancies they are not slow to axe their "bench". The journey-men consultants are the ones who get really shafted.

[Cirrus]

All good PM's have their own private little Excel spreadsheet with the costs in. Your full cost will be in there somewhere.

You have to realise a lot of us work for big companies. They usually don't have personal rates. They'll have notional numbers (sometimes pages and pages of them). They will often include hefty overheads so a developer in Krakow might be $310 per day. No way anyone puts that in their pocket.

I was recently at a challenger bank. There were three of us starting within a couple of weeks, doing much the same thing. One was on £375, another on £400 and I was on £600. There's no way the client department was being charged those different rates. I was obviously being subsidised by others on some blended figure.

[tomtomagain]

You have to realise a lot of us work for big companies. They usually don't have personal rates. They'll have notional numbers (sometimes pages and pages of them). They will often include hefty overheads so a developer in Krakow might be $310 per day. No way anyone puts that in their pocket.

I was recently at a challenger bank. There were three of us starting within a couple of weeks, doing much the same thing. One was on £375, another on £400 and I was on £600. There's no way the client department was being charged those different rates. I was obviously being subsidised by others on some blended figure.

I do realise. It was in my second sentence about "blended rates". However it's not always true. I worked in a company in the top 3 of the FTSE100 and knew the "actual" rates of the contractors on my projects. Mainly because I had reconcile the actual numbers coming in through SAP with the invoices from the agents.

But yes. When dealing with contractors from other departments/divisions it was generally an inter-company recharge using fictitious money.