Agency bug bears

[speling bee]

The calculator is fun. You put in the current agency margin you pay as a client, which they then compare to their mark-up.

Calculate savings | Hireonomy

So inputting a 7% margin for 1 contractor at a daily rate of £500 per day, you get this:

Competitor charge per day = £537.63
But with the Hireonomy Markup of 7%
You pay
£535.00
per day

Hireonomy Savings

Per day: £2.63
Per week: £13.17
Per month: £57.08
Per year: £684.95

So they assume 260 days worked per year. I wonder if that is their mean, or are they over-inflating? It must be the former because it states on the same page:

We want to earn trust and build lasting relationships with clients and candidates.

However, if you input a margin of 6%, you click on Calculate and get this:

Thank you for considering Hireonomy for your IT Contractor requirement. We would be happy to discuss your enquiry in more detail with you, please contact us on 023 8018 0025

And just for fun:

If you have 99999999999999999999999999999999999999999999999999 99999999999999999999999999 contractors each at an daily rate of £9999999999999999999999999999999999999999999999999 9999999999999999999999999 and a current agency margin of 99%, you get this:

Competitor charge per day = £8,507,059,173,023,461,586,584,365,185,794,205,286 ,400.00
But with the Hireonomy Markup of 7%
You pay
£91,025,533,151,351,044,265,503,168,302,000,635,90 4.00
per day

Hireonomy Savings

Per day: £8,416,033,639,872,111,127,892,305,893,328,211,148 ,800.00
Per week: £42,080,168,199,360,555,639,461,529,466,641,055,74 4,000.00
Per month: £182,347,395,530,562,415,830,505,425,119,639,072,9 31,840.00
Per year: £2,188,168,746,366,748,989,966,065,101,435,668,875 ,182,080.00

I don't think that is correct, because the calculated values don't change if I knock a few digits off the number of contractors or daily rate.

[Boo]

@Boo - yes, we've (Deerfoot Group) have been going for a long time.. since 1997... and have made a profit each year. The reason Hireonomy has been formed ...

I.e. you (Hireonomy) have only just formed. As I predicted.

Sorry to seem like a cynic but we've been here before with firms putting up sites advertising fixed markups - most recent one I remember was 9% but I can't remember whether that was margin or markup nor what the firm's name was except that it had "nine" in it. They made no kind of market impression and from what I could see of their website had not a single advertised job in their entire history. Where are they now ? God knows...

The reason that fixed markups don't exists is simply that the corrupt system we use for recruitment in this country makes the client insensitive to the price / cost / worth of IT contractors. The HR departments, in cahoots with the non-technical management of the firm, choose which contractors are taken on by selecting which agencies are accepted onto the PSLs. These decisions are not made on technical grounds because the people concerned could not make technical decisions. The decisions are made on "how nice a bloke" the agent is. And we all know what that means...

So your chance of selling contractors to clients is not improved by your low markup, rather the opposite : you will not be able to afford to seem like "good blokes" if you are yourselves only on 7%, and you won't be able to sell on the strength of your contractors' abilities because the people you are selling to don't give a tulipe. When you compete against the unscrupulous who put forward the dregs of the contracting world at hugely inflated margins you will lose out.

So my prediction is : you will never place a single contractor and you will silently revert to the standard operating mode of the highstreet agency : big margins with cheap contractors and screw the job, the work and the rest of the world generally.

...is to try and change the feeling/animosity towards Agencies, which is clearly visible here.... and quite rightly so in many cases. It is you, the Contractor, who is doing the hard work afterall - why should an Agency charge 15, 18, 25% Margin on your hard work.

You are right to say that your setup will appeal to contractors. What you have not said is that it will not appeal to the clients, for the reasons I have given. A real cynic would wonder whether there was something else unsavoury going on here ? Because I rather doubt that the average MD of a firm of rec. con.s will not fully understand what I have said above. Is Hireonomy selling something else, may we ask ? Or up to something else ?

Note: I know nothing of Deerfoot and the above is meant to be general comment on the state of the UK recruitment market and in no way intended to reflect on either Deerfor or Horeonomy themselves who all, I am sure, always act with the utmost probity.

Boo

[DodgyAgent]

Even at a 7% mark-up?

It is based on turnover

[speling bee]

"We have a 15-year track record of sourcing " Really? how does that work, so you registered the trading name in 2010.

Agency bug bear --> The ones that lie to you ^^^^^

I guess they mean Deerfoot.

[Batcher]

I guess they mean Deerfoot.

Has anyone on here had any experience of Deerfoot?

I've been contracting for 17 years and this thread is the first I've heard of them.

[Boo]

Don't you think a website should say whether VAT is included in the price?

Not if it is obviously a b2b transaction as selling a contractor to a client. VAT is assumed in that case.

But the post of yours to which I was referring said that it should say whether VAT was being charged on just the Agent's markup or the contractor's cut. In fact under the normal VAT rules VAT would be charged on both since both are being charged to the client by the agent who is VAT registered.

Boo

[TheFaQQer]

Not if it is obviously a b2b transaction as selling a contractor to a client. VAT is assumed in that case.

But the post of yours to which I was referring said that it should say whether VAT was being charged on just the Agent's markup or the contractor's cut. In fact under the normal VAT rules VAT would be charged on both since both are being charged to the client by the agent who is VAT registered.

Boo

Does that hold true if the company isn't VAT registered? I didn't think you were allowed to charge VAT if you aren't, but I'm happy to be proved wrong.

[original PM]

Has anyone on here had any experience of Deerfoot?

I've been contracting for 17 years and this thread is the first I've heard of them.

In a former life when I worked for an Umbrella (e.g at the Umbrella and not through them for billing) we did have a couple of people through Deerfoot - and I do not seem to remember them causing any major headaches surrounding contract paperwork or payment timescales.

[DodgyAgent]

However you dress it up the model that works is the same as it has ever been. The difference is that contractors are easier to find. There are always great opportunities for niche agencies and body shops/RPOs - and then there is S3 Group - they are very profitable. Those that copy S3 to the letter do OK those that want to be "touchy feely" will fail. The name of the game is filling gigs anything else is bo**ocks. .

Most contractors understand this and play according to what works for them..

[gardener]

What I find remarkable on CUK is the lack of moaning about agencies. OK we get our fair share of stick but most of the threads that complain about our behaviour/existence are usually turned around and end up with attacks on the OP. I think this is because most CUK users "get it" as far as agents are concerned and know how to use them. As a result very few feel "victimised".

I intend to change that of course and get you lot to be "our bitches"

Hmmm... A service provider makes its uses very clear and tends to advertise it. But to use a parasite like you, one has to be street smart and "figure you out"?

A list of your uses please. How are you usable?