IT contractor - just found out what my agent is taking
Discussion
I'm livid 
Bit of background - I'm an IT contractor and have been for just over 20 years, so I know the score with agents, rates etc.
Back in 2008 I got my first contract with my current client; I've left, worked for other clients (twice) in the intervening period. The agent concerned has always been, so I thought, a straight bloke with me; we've become quite good mates, he's got some similar petrolheady interests and me and my OH have been out with him and his OH. I thought I could trust him.
About 10 months ago I was asked back here by the client - note this bit - I was asked back, the job wasn't fielded elsewhere - for something quite specialist; it's an excellent role and I love it.
However I was accidentally emailed one of the agent's invoices to the client a couple of months ago and just got round to having a look at it. Despite my agent claiming that there's "next to nothing in it" for him, and he's making nothing it turns out he's taking 20%
This is a fairly hefty sum.
I don't think that I'm unreasonable in thinking this is way too high; I've always worked on 7.5 - 12% as a ballpark. I don't think that after four years and several different contracts (the last couple of which have not been his doing, I've just merely gone through his agency due to re-engagement rules) that 20% is cricket at all.
Any idea how I can broach this with him or what I can do? He already knows that I know.
Bit of background - I'm an IT contractor and have been for just over 20 years, so I know the score with agents, rates etc.
Back in 2008 I got my first contract with my current client; I've left, worked for other clients (twice) in the intervening period. The agent concerned has always been, so I thought, a straight bloke with me; we've become quite good mates, he's got some similar petrolheady interests and me and my OH have been out with him and his OH. I thought I could trust him.
About 10 months ago I was asked back here by the client - note this bit - I was asked back, the job wasn't fielded elsewhere - for something quite specialist; it's an excellent role and I love it.
However I was accidentally emailed one of the agent's invoices to the client a couple of months ago and just got round to having a look at it. Despite my agent claiming that there's "next to nothing in it" for him, and he's making nothing it turns out he's taking 20%
This is a fairly hefty sum.I don't think that I'm unreasonable in thinking this is way too high; I've always worked on 7.5 - 12% as a ballpark. I don't think that after four years and several different contracts (the last couple of which have not been his doing, I've just merely gone through his agency due to re-engagement rules) that 20% is cricket at all.
Any idea how I can broach this with him or what I can do? He already knows that I know.
20% is quite normal, even seen 30%. What's the issue with this? You were happy to sign a contract and so were happy with your rate. What the agent/3rd party makes isn't any of your business as that's their business. Some people could see what you're getting paid and be shocked at that but again, it's none of their business.
Silver993tt said:
20% is quite normal, even seen 30%. What's the issue with this? You were happy to sign a contract and so were happy with your rate. What the agent/3rd party makes isn't any of your business as that's their business. Some people could see what you're getting paid and be shocked at that but again, it's none of their business.
20% is normal? I might have seen that back in the early 90s (I remember Computer People and their 30% plus rate on n00bs), not seen anything like that in years. I remember getting some agencies down to 7.5% back in the day. It would be vaguely acceptable had the job came via the agent, and not vice versa. (Incidentally - I'm not happy with the rate, however the role makes it tolerable) I do see your point - you should at the end of the day only be concerned with what you yourself are seeing going into your bank.I just feel aggrieved at the margin. I doubt I'll be staying here now, out of principle.
Dog Star said:
Silver993tt said:
20% is quite normal, even seen 30%. What's the issue with this? You were happy to sign a contract and so were happy with your rate. What the agent/3rd party makes isn't any of your business as that's their business. Some people could see what you're getting paid and be shocked at that but again, it's none of their business.
20% is normal? I might have seen that back in the early 90s (I remember Computer People and their 30% plus rate on n00bs), not seen anything like that in years. I remember getting some agencies down to 7.5% back in the day. It would be vaguely acceptable had the job came via the agent, and not vice versa. (Incidentally - I'm not happy with the rate, however the role makes it tolerable) I do see your point - you should at the end of the day only be concerned with what you yourself are seeing going into your bank.I just feel aggrieved at the margin. I doubt I'll be staying here now, out of principle.
You've already said you like the job. If the rate is currently too low then renegotiate at the extension.
Edited by 98elise on Tuesday 16th April 08:43
20% is high. It is nearly 10 years since I contracted & I remember the client nailing down the rate & the agency fee. Pretty sure it was 7.5% & those agencies unhappy were knocked off the list & if they wanted to keep the contractor they were asked to swap agencies.
At one point in negotiations in an earlier role I'd got my rate increase partially through the client & partially through getting the agent to drop from 12% to 8%.
At one point in negotiations in an earlier role I'd got my rate increase partially through the client & partially through getting the agent to drop from 12% to 8%.
98elise said:
Why have a hissy fit over it? You're sub-contracted to the agent, they make a mark up, so what. Are you going to ask what the margin is on the next job, and turn it down if the agent makes too much? 20% is on the high end, but not taking the piss.
Yes but remember that ALL they have done for 20% of my labours is mail me a contract. They don't even put a stamp on the envelope.(Yes, I know they handle my payments too).
Dog Star said:
98elise said:
Why have a hissy fit over it? You're sub-contracted to the agent, they make a mark up, so what. Are you going to ask what the margin is on the next job, and turn it down if the agent makes too much? 20% is on the high end, but not taking the piss.
Yes but remember that ALL they have done for 20% of my labours is mail me a contract. They don't even put a stamp on the envelope.(Yes, I know they handle my payments too).
When is your current contract up (ie when is the next extension). Just negotiate then if you think the rate is low.
I'd say 20% is normal. I've been on both sides - consultant/contractor, and purchaser of contractor services.
Back in the late 90s when "everyone" was a contractor, I worked (employed) for a high-profile company in London and we were cold-called by agents incessantly. Back then, rates were 15%-ish and we used to say to agents that we wouldn't even talk to them unless they were coming in at 12% or less. Most didn't; the hungry ones did.
But these days 20% is definitely around the going rate, for contract and perm. Sometimes more.
I wouldn't get too antsy with your agent. Remember that (assuming he's paying you?) he's carrying the risk of paying your £10k invoice and waiting 3 months to get his money back plus his £2k, during which time the company could go under. I have myself thought about (a) trying to go direct, but how do you find the contracts, and you have to fund yourself whilst the company takes 90 days to pay you, and (b) being an agent - I've known people who have made good money from this, but conversely, he needs a fund to pay you and as above, carries a risk.
He's not having you over. And meals out etc are part of the deal! (He paid, right?).
Back in the late 90s when "everyone" was a contractor, I worked (employed) for a high-profile company in London and we were cold-called by agents incessantly. Back then, rates were 15%-ish and we used to say to agents that we wouldn't even talk to them unless they were coming in at 12% or less. Most didn't; the hungry ones did.
But these days 20% is definitely around the going rate, for contract and perm. Sometimes more.
I wouldn't get too antsy with your agent. Remember that (assuming he's paying you?) he's carrying the risk of paying your £10k invoice and waiting 3 months to get his money back plus his £2k, during which time the company could go under. I have myself thought about (a) trying to go direct, but how do you find the contracts, and you have to fund yourself whilst the company takes 90 days to pay you, and (b) being an agent - I've known people who have made good money from this, but conversely, he needs a fund to pay you and as above, carries a risk.
He's not having you over. And meals out etc are part of the deal! (He paid, right?).
Edited by CAPP0 on Tuesday 16th April 09:47
I had this a few years ago at a long term previous client.
My original contract had the agent taking nearly 25%. I was a bit annoyed but that was the contract I had signed up to so I stuck it out until renewal at the end of the year.
Then I told the agency that I wanted my % upped. We had a bit of negotiation and signed a new contract where their % was more like 15% or so, which is more normal.
My original contract had the agent taking nearly 25%. I was a bit annoyed but that was the contract I had signed up to so I stuck it out until renewal at the end of the year.
Then I told the agency that I wanted my % upped. We had a bit of negotiation and signed a new contract where their % was more like 15% or so, which is more normal.
Dog Star said:
98elise said:
Why have a hissy fit over it? You're sub-contracted to the agent, they make a mark up, so what. Are you going to ask what the margin is on the next job, and turn it down if the agent makes too much? 20% is on the high end, but not taking the piss.
Yes but remember that ALL they have done for 20% of my labours is mail me a contract. They don't even put a stamp on the envelope.(Yes, I know they handle my payments too).
Dog Star said:
20% is normal? I might have seen that back in the early 90s (I remember Computer People and their 30% plus rate on n00bs), not seen anything like that in years. I remember getting some agencies down to 7.5% back in the day.
Yes 20% is normal. I know of Senior Appointment agencies that refuse business below 20%. I also assume that you are talking about 20% gross margin on sales, rather than 20% mark up on your day rate (which would be more like 18% margin).You might look at that and think he is making a lot, but most agencies will pay you as soon as you put your timesheet in. This means they are out of pocket for a month by the time the client pays the invoice. If they are using a factoring service then they can wave goodbye to as much as 4-6% of the 20% margin.
At 7.5% there would almost literally be nothing in it for them unless they are dealing with massive volumes of business from that client. However if the agent has said to you before that he makes nothing out of it then this is wrong of him as 20% is healthy.
As others have said already, you were happy to take the job on with the day rate offered, and the client was happy to pay the Agency the gross rate, so what's the problem? Would you have this work if it wasn't for the Agent in the first place?
Edited by topless_mx5 on Tuesday 16th April 15:09
Who says that the current Terms signed with them arent at 20% flat across the board and you're merely on the flat rate - the same as everyone else on the current framework for agencies?
Is it Margin or Mark-up btw? a 20% mark-up is a lot less as a margin?
Also, you mention that you trust this guy, you get on personally and that everything is basically as good relationship between a contractor and an agent gets, I'm also assuming that he's paid you on time?
Is it Margin or Mark-up btw? a 20% mark-up is a lot less as a margin?
Also, you mention that you trust this guy, you get on personally and that everything is basically as good relationship between a contractor and an agent gets, I'm also assuming that he's paid you on time?
Most of my contracts have been direct, so haven't really experienced this. I got a very weird daily rate with my last contract so presumed they were taking a set percentage. I start a new contract next week and I'm more than happy with the daily rate so what the agent takes is none of my business. I would of course be gutted if I found out they were getting a massive slice, but either way, I'm happy with the bit I get so won't lose any sleep over it.
Not really sure what you're so annoyed about OP?
If he's making 20%, good luck to him. I assume you're happy with what you're being paid?
If you're that bothered about it, cut him out and get work directly yourself....?
It's like complaining that a dealer is making too much money on a car - if you don't like the margin; bypass them and buy where they buy. If you can't do that, suck it up.
If he's making 20%, good luck to him. I assume you're happy with what you're being paid?
If you're that bothered about it, cut him out and get work directly yourself....?
It's like complaining that a dealer is making too much money on a car - if you don't like the margin; bypass them and buy where they buy. If you can't do that, suck it up.
RSoovy4 said:
Dog Star said:
98elise said:
Why have a hissy fit over it? You're sub-contracted to the agent, they make a mark up, so what. Are you going to ask what the margin is on the next job, and turn it down if the agent makes too much? 20% is on the high end, but not taking the piss.
Yes but remember that ALL they have done for 20% of my labours is mail me a contract. They don't even put a stamp on the envelope.(Yes, I know they handle my payments too).
If they are talking to you, they are probably lying and if they aren't talking to you they are working out how to lie to you.
Just don't take it personal, take the money and smile.
Muzzer79 said:
Not really sure what you're so annoyed about OP?
If he's making 20%, good luck to him. I assume you're happy with what you're being paid?
If you're that bothered about it, cut him out and get work directly yourself....?
It's like complaining that a dealer is making too much money on a car - if you don't like the margin; bypass them and buy where they buy. If you can't do that, suck it up.
Exactly. You wouldn't go into Tesco, buy a Mars bar for 60p and then come out and be livid that Tesco have just made 40p profit If he's making 20%, good luck to him. I assume you're happy with what you're being paid?
If you're that bothered about it, cut him out and get work directly yourself....?
It's like complaining that a dealer is making too much money on a car - if you don't like the margin; bypass them and buy where they buy. If you can't do that, suck it up.
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff