Looks like my contract is going to be renewed again (woop woop!).

I’d quite like a pay rise (wouldn’t we all), but the project I’m working on is pretty strapped for cash, so I doubt they’d be able to approve it. My agency, however is taking a pretty massive cut (28%) considering all they are now doing is collecting money and forwarding it to me.

Has anyone successfully renegotiated for an agency to take a smaller cut? How did you go about it?

Cheers,
Dave

You would need to contact the agency and see what they say.

I’m guessing it will be No, they’re not going to give you some of their money to keep you on that job, they would simply try and transfer the cost to the employer.

Only then when the employer says no will they most likely negotiate if they are keen to keep you on the job.

28% – are you really sure, as in you know for a fact?

I’m surprised the customer is happy at that rate, my supplier agencies use to work on 15-20%, and if need be would run down to 12% on a repeat – to give a payrise that didn’t cost me 🙂

Yeah, that is definite – my project manager told me how much he’s paying, and the shortfall as a percentage of the total is 28%.

Although, now I’ve said that, I’m having doubts about where VAT sits in that….

hmm.

I spoke to the agency last time I was renewed, and they didn’t seem keen to raise anything to do with rate increases, and definitely didn’t mention anything about their cut (but why would they).

I’m quite new to this, and I have no idea how far I can push it.

Dave

I would be careful about discussing your rate in the current climate

My companies view is contractors are paid a good rate partly due to the additional risk they are accepting by not being perm. For contract renewals or longer term renewals we often look to reduce the contractors rate.

Of course you could leave, but at my company the vast majority of time contractors don’t.

You also need to factor in what is happening to perm rates at your company. At mine people have taken a paycut this year, with another on the cards for next year.

I’d keep quiet…

EDIT – re-read your post, see you are referring to your agency and margin – I doubt it is 28% and even more doubtful they would change, but if it wont risk your contract with your current company you could always give it a go. You need to be prepared to potentially walk though.

Some agencies are very up front with their margin and make it clear to both contractor and company

right, I’ve redone my sums taking into account VAT on top of what my PM says he’s paying, and subtracting VAT from the amount that I was thinking my agency was taking as profit.

now it looks like they are taking a 20% cut.

would still like to squeeze that a bit, since they’re not doing anything to earn it… maybe I’ll ring them and have a chat.

Dave

My view is that if you can financially cope with walking away from this contract and have a lot of other opportunities waiting for you then push for what you think it is worth.

If you don’t have the safety net above then don’t do anything and wait for the next contract renewal.

Depends on how much you are needed. If you can threaten to not renew due to contract problems then your employer might lean on the agency. Also, the agency know full well they are getting money for nowt and WILL reduce their take.