Current Rates = Ticking Timebomb

[Support Monkey]

Is it just me or does anyone else think this:

Desperate contractor takes poor rate offered just to keep the money coming in.
Agency thinks great i filled a post and will get my commission (or: i got a larger % for paying the lower rate).
Client thinks great i filled the post (or: i got someone cheap).

2 months down the line

Desperate contractor keeps looking for better rate on offer and although he would never do this normally he cannot work for peanuts so jumps ship or just does not extend, making contractor look bad and effecting his reputation.

Agency thinks contractor is unreliable and also gets it in the neck for supplying unreliable contractor and loses client

Net result is: Client thinks twice before using any contractors or agency.

Unrealistic rates are going to effect everyone in the supply chain eventually.

[SuperZ]

Is it just me or does anyone else think this:

Desperate contractor takes poor rate offered just to keep the money coming in.
Agency thinks great i filled a post and will get my commission (or: i got a larger % for paying the lower rate).
Client thinks great i filled the post (or: i got someone cheap).

2 months down the line

Desperate contractor keeps looking for better rate on offer and although he would never do this normally he cannot work for peanuts so jumps ship or just does not extend, making contractor look bad and effecting his reputation.

Agency thinks contractor is unreliable and also gets it in the neck for supplying unreliable contractor and loses client

Net result is: Client thinks twice before using any contractors or agency.

Unrealistic rates are going to effect everyone in the supply chain eventually.

Dunno about you but I`m open and honest enough to give both the client and agents my reasons for leaving? Surely the client knows they got you dirt cheap and will either expect to pay more down the line or will have to let you go. Same for agents, they know the rates but know the rates won`t stay this low and the occassional better paying contract might fall into the contractors hands.

Ditching client/agency without notice though or "due to illness" will damage your reputationthough and good thing also.

[BrilloPad]

So the alternative is they outsource it all to India?

[Not So Wise]

My client has known from day one they are getting me cheap and that when the market improves in first half of next year (hopefully) i am out of here

They get me cheap for 18 months
I get a safe harbor for 18 months

Everyone is happy

But yes do understand what you are saying, but really don't think it is that much of a issue, pay crap in any business and you end up with a high turn over, pay decent and people will put up with nearly anything (see IB sector)

I am more concerned with all these "desperate contractors" keeping rates low and making tulipty deals with agencies the norm (lengthy payment terms, stupid T&C's, so forth).

[northernladuk]

I think this is a tad simplistic and is looking at one version of events. The other version is as follows.

Desperate contractor takes poor rate offered just to keep the money coming in.
Agency thinks buggger i filled a post and got the worst commission I can remember. Client thinks great i filled the post cheap!

2 months down the line

Contractor jumps ship for a better rate making all aware. Agency advises that this was always a possibility at this rate and warned the company at the beginning.

The company get cheap contractor in who does it again. Companies start to realise they pay peanuts they get sh*t service and start upping the rates to reduce the risk of contractors leaving which is actually costing him more than taking him on at a reasonable rate.

Thats what I have my money on anyway.
At end of day we are a service that has a certain value and that value cannot be pushed past a certain level (i.e. less than permie pay) without problems

[XLMonkey]

Its just you.

the complete story is:

client might be grumpy, but still has a project to deliver, so pays the agent to find another contractor. the market's going up, so the client pays a premium, and the agent gets a higher commission. contractors at other clients see that rates are going up, and start asking for more money/leaving. rates get inflated. before you know it....

Boomed again

this is the joy of the market and herd economics. When its bad, its very bad. When its good, its just silly

[Lumiere]

Desperate contractor keeps looking for better rate on offer and although he would never do this normally he cannot work for peanuts so ..

.. he goes permanent.

Less contractors - more demand for contractors - rates rise ..

[chris79]

I turned down my last contract extension citing the rate being offered was not good enough.. I finished on the Friday and they had a replacement starting on the Monday.

[malvolio]

Oh FFS, it's called supply and demand. Lots of contractors on the bench, low rates. As the supply of contractors goes down, rates go up.

What is doing damage is people not taking work becuase of the current low rate, so guaranteeing the work goes to offshore teams. Clients aren't interested in who does the work, merely the bottom-line cost. So take the lower rates and prove you are worth a rise when rates themselves go up.

[Bright Spark]

I agree that having low rates attracts a different breed of contractors who
are more likely desperate and lack skills or integrity, that's a generalisation
and guess applies to any market not just contractors.