Agency Margin

[Moscow Mule]

I've been out of the game for a while (joined the dark side) but have just started looking to hire a couple of guys to our team.

Agency margin (for a preferred supplier) is 15%.

Is that:
a) taking the piss,
b) about right,
c) a bargain?

In my 10+ years of contracting before this job, I never had to suffer any more than 10%...

[Dallas]

If you are the hirer why do you care, thats betwen the contractor and agency. The agency tends not to reveal the percentage to the contractor, dependeing on the industry between 6-10 % is the norm.

[reformation]

I've been out of the game for a while (joined the dark side) but have just started looking to hire a couple of guys to our team.

Agency margin (for a preferred supplier) is 15%.

Is that:
a) taking the piss,
b) about right,
c) a bargain?

In my 10+ years of contracting before this job, I never had to suffer any more than 10%...

Its not too bad. I wouldn't get too fussed about it, worry about the quality of the people they supply rather than who's getting what, if the contractors are happy and you're happy then theres no reason to let it get under your skin.

That aside 15% is well within reasonable terms.

[Moscow Mule]

If you are the hirer why do you care, thats betwen the contractor and agency. The agency tends not to reveal the percentage to the contractor, dependeing on the industry between 6-10 % is the norm.

Because I don't want contractors to be treated like crap, and I want a good deal for myco?

[Dallas]

Thats not about their treatment, their deal with the agency is their deal?

[Moscow Mule]

Thats not about their treatment, their deal with the agency is their deal?

Suppose it's semantics rather than anything else. If they are happy with the rate then so be it.

If they are just taking the rate until something better comes along, I've lost the investment of my time in introducing the new guy to my team.

[reformation]

Suppose it's semantics rather than anything else. If they are happy with the rate then so be it.

If they are just taking the rate until something better comes along, I've lost the investment of my time in introducing the new guy to my team.

I know contractors dont particularly like agents and we're seen as the bad guy, but most agents arent trying to rip contractors off by taking £500 a day paying them £200, in practice this is rare and almost non existent.

[northernladuk]

What level rates are we talking? 15% of 250 is a different issue to 15% of 600. The agency has to meet a certain figure to be profitable so margins (should) vary depending on rate range.

[wonderboy]

If you are the hirer why do you care, thats betwen the contractor and agency. The agency tends not to reveal the percentage to the contractor, dependeing on the industry between 6-10 % is the norm.

In the .NET space (IME) 10-15% is the norm.

He *should* care only if the agency is low-balling candidates without his knowledge because he is unlikely to end up with the best one (the best ones just won't apply).

He should *not* care because "20% is outrageous?!" because 20% of 450 GBP/day is 90 GBP and the company can well afford it. I am confident in saying that because they are hiring a contractor.

Transparency is the best policy, and if he is not getting candidates of sufficient quality, he should find additional budget for the role (whilst remaining calm about the agency margin).

Given that he knows the agency margin, if he feels the contractors are being "treated like carp" then it is *his* fault for not getting a decent budget for the role.

Alternatively, he should advertise direct himself....

[reformation]

What level rates are we talking? 15% of 250 is a different issue to 15% of 600. The agency has to meet a certain figure to be profitable so margins (should) vary depending on rate range.

Exactly, and most smaller agencies will be factoring their invoices and paying a hefty fee for the privilege, so about 30% of the agency 'profit' is eaten up in factoring costs. I know thats not your problem and its a cost of doing business for the agency, but its a consideration.

I dont know if this is the done thing here, but if you're looking for contract resources I can definitely help and would like to work with you Moscow Mule.

If me asking for business is a bit naughty on this forum then i'll obviously stop!