How do we break the current crappy contractor system? How do we break the current crappy contractor system?
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  1. #1

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    Default How do we break the current crappy contractor system?

    Serious question, hear me out.

    I'm deeply cynical and dismissive of agencies. In the main, they do nothing to justify their fee. It's rare to encounter one who knows anything about IR35 and proper working arrangements. Their agents are little more than salesman spammers who hit up LinkedIn for skill keywords in the hope of doing a very basic middleman introduction and email of a 'job description'. An agency is considered 'good' if their back-end admin isn't completely incompetent, and even then it normally takes a few weeks for them to get up and running on a new contract. Asking them for contract modifications throws them for a loop and everything is so delayed it often becomes a choice between starting the job or letting it go because they're dicking around too much trying to work out where to paste in some new clauses from.

    Or you could be a permie. Urgh. Eating tulip in a tulipty office with a 3-month notice designed to make it difficult to leave and getting paid below market value etc. etc.

    Worse still, you could be a permie working for a consultancy who farms *you* out at contractor rates whilst your delightful employer takes a tidy profit from the difference. Of course they offer you a free laptop and phone and a fscking scooter in the wacky multi-coloured ultra-hip office with free beer in the fridge. It's peanuts compared to what they're making off you.

    So the question is... what's the better solution? You're a limited company with a single director, engaging mostly through agencies on jobs for a fixed period. You've got a right to substitute but that's not the same as being a viable employer. And you're looking for quality people who, if they're any good, should be contracting themselves, and they don't want to be your employee do they?

    I'm not describing an umbrella company either. That to me is just a construct that's taking a cut of your money to ease the burden of tax and NI for those that don't want to do it themselves. It's easy but it's not exactly the most tax-efficient way. You're still basically operating solo, still dealing through an agency.


    I can't help but feel there's some giant niche here for a better way. Contractors coordinating to work together. Cutting out the agencies. Supplying the demand in a more intelligent manner. Something that doesn't ultimately end up just being another agency.

    Feel free to tear all of that apart, this is just something that keeps occurring to me every time I shift contracts and think 'sheesh, there must be something better than this'.

  2. #2

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    Do nothing, and wait until circa April 2020.

    If you want to avoid agencies, then specialise and build a network. It's "simple" enough, providing you're good enough and don't mind the (not inconsiderable) risk that comes with being a specialist. It's all about power. If you're easily replaceable, then you have no power. If you need to look for work, you either need an agent or a good network but, even with a good network, being replaceable means that you can't dictate the terms.

    Otherwise, suck it up, buttercup.

    There are fifteen million contractors that went before you and thought the same thing. That resulted in about 14.99 million iterations of a "contractor's club" idea of some sort, all of which didn't make it to the launch pad, exploded on launch or exploded shortly thereafter, AFAIK.

  3. #3

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    Quote Originally Posted by cloudcontractor View Post
    Serious question, hear me out.
    Oh OK. Sounds interesting...

    blah blah blah
    Dammit. Should have known better...

    Create yourself a micro consultancy and go for fixed price pieces of work then... No one is forcing you to go via an agent and earn over 100k a year.
    Last edited by northernladuk; 14th July 2019 at 20:33.
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    Quote Originally Posted by northernladuk View Post
    I have no ideas and no suggestions outside of my usual abrasive and patronising condescension.
    Cool cool, but tbh I didn't have you in mind when I wrote the post. You don't have to reply to everything here with your 'opinion', but you also strike me as the kind of person that just can't help yourself either.

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    Quote Originally Posted by cloudcontractor View Post
    Cool cool, but tbh I didn't have you in mind when I wrote the post. You don't have to reply to everything here with your 'opinion', but you also strike me as the kind of person that just can't help yourself either.
    Serious question, hear me out.
    Did that.

    Feel free to tear all of that apart,
    Did that.

    What's the issue?
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  6. #6

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    Quote Originally Posted by jamesbrown View Post
    That resulted in about 14.99 million iterations of a "contractor's club" idea of some sort, all of which didn't make it to the launch pad, exploded on launch or exploded shortly thereafter, AFAIK.
    That's fine, and kind of interesting, reminds me of xkcd: Standards

    The fact that a good answer isn't readily available doesn't make it not a valid question. It just means the successful format hasn't been found yet, or perhaps a 'contractors club' is the wrong kind of vehicle. It's more than just not having to use an agency to find work for yourself. Agencies are an unnecessary middle-man, and then it's down to the individual to check contracts, conditions, negotiate on rates, etc. and if you're on the ball you're in a good spot and you've got it all covered, but you're also having to expend a lot of effort each time on something that should be more easily solvable, almost automated.

    If anything the impending 2020 changes are crying out for a more holistic solution such that individuals don't have to fret about each engagement and the private sector won't panic and declare everyone a dependent PAYE contractor just to be safe.

  7. #7

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    I am as critical of agents as the next person but all they do is bring the two of you together, write up a contract and settle invoices. They don't hold a gun to a contractor or clients head and tell either to turn the working relationship into something on the way to being employer/employee.

    Everyone shares a little bit of the blame for what is happening but if clients treated contractors as someone brought in to do a bit of work and go again and contractors stopped wanting to embed themselves into the client to get a new extension we might not have reached this stage.

    Stop treating agents as the pantomime villain in all this.

  8. #8

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    Quote Originally Posted by SussexSeagull View Post
    They don't hold a gun to a contractor or clients head and tell either to turn the working relationship into something on the way to being employer/employee.
    But they do hold a metaphorical gun to contractors heads to prevent them either going direct with the client or switching to another agency. This is often applied long after the original contract has expired.

    Perhaps if contractors could cut the agent out of the loop once they've been introduced to the client (in other words, acting solely as a "finder") and the client has decided that they would like to hire the services of the contractor, then you might be in a better position to legitimately claim that "all they do is bring the two of you together".

  9. #9

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    Quote Originally Posted by cloudcontractor View Post
    You've got a right to substitute
    Do you? Do you really have a legitimate, usable RoS?

  10. #10

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    I think you are looking at this "problem" from the wrong end.

    The question you need to ask yourself is : Do the end-clients, who ultimately engage the contract staff, feel the system is broken?

    Largely the answer is "No". Of course they could save agency fees by advertising their roles directly on LinkedIn, filtering the CV's, interviewing and then directly contracting the contractor ... but they don't want to do that. It's time-consuming, expensive and of course, removes one level of indirection between themselves and the end-resource who is ultimately doing the work.

    This extra level of indirection is important to them. Otherwise, they are far more exposed to being accused of having disguised employees.

    The other weakness in your argument is that the agencies do nothing to justify their fees. You are not thinking this through. The agent get's the contract, runs an office, collects the CV's, sets up contracts, runs the payments process etc etc. All this has a cost. And like it or not, all this has to be done. Their fee covers all this and of course also makes up for all the times they didn't place a contractor ... but still ran the adverts, sifted the CV's, and shmoozed the clients.

    The same applies to consultancies, they may "farm" you out, but their profits are not as fantastic as you think. Every consultancy employees sales staff, admin, "Account Directors" and has to support a "bench" of un-placed resources. Again all this has a cost which consumes a very large proportion of the fees generated by their consultants.

    Agencies and consultancies are not massively profitable business on the whole. They are all fighting each other hard to win business, squeezing their suppliers ( aka "You" ) is a natural consequence of this.

    The power in this relationship, especially in current market, is:

    End-Client-->Agent-->Contractor

    If you want to change the system, you need to focus on the End-Client. She's the one with the money and she's the one doing the hiring. So how do you make her life easier? How do you save her time and money? How do you reduce the risk to hiring temporary resources? How do you guarantee a positive outcome for her?

    If you can answer those questions then you'll be quids in.

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