Good Contract Rates – How to get them by an Agent | UK Contractors

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Good Contract Rates for contractors
Good Contract Rates for contractors in the UK

Getting Good Contract Rates

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How does one go about getting good contract rates? An Agent gives his advice on how to get the best rate possible. It’s worth listening to.

After our series a while back on Agency Tactics: How to Deal With Them, and the one on Getting Good Rates from your Agency, a recruitment consultant sent us the following reply. He would like to take issue with some of the advice given, and some statements made.

Getting a Good Contract Rate from an agency
Getting a Good Contract Rate from an agency on a contract

The reply was as follows:-

Thanks for the reply and not just binning my comments under the assumption that I was just another agent complaining about how contractors perceive us.

To be honest though, your articles are years out of date. Blimey! You must have dealt with some bad agencies.

Fair to Everyone

I can’t remember the last time we have ever had a role which didn’t have a top end price.

The days of ridiculous charge rates and margins are over.

Back in boom times you could place people at good contract rates in banks in the city at £70ph (where today it is about £50) and put a 25-30% margin on top.

This WAS NOT robbing the contractor. They get the good contract rates they want and we could make up a figure on top.

It would only be robbing a contractor IF there was a maximum price for the job. Then, obviously, 25-30% would be outrageous.

Bottomless Pockets

It wasn’t robbing the client either. They had bottomless pockets and there was NO set margin.

Contract Rate Rise at Renewal Time
Contract Rate Rise at Renewal Time for Contractors

Those days of good rates are over and very shortly afterwards, they introduced standard margins.

The majority of companies have preferred suppliers and set margins which range from 12-18%.

They cannot increase, AND, BELIEVE IT OR NOT, reduce these margins.

No Rate Reductions

A lot of the big companies have set procedures and they will not let an agency reduce a rate to give it to a contractor.

Strange but I can assure you it is VERY TRUE. The market has changed and budgets are far more important.

Clients want to know how much a contractor will work for. That’s because it can have a bearing on whether they get an interview or not.

No Rate Changes

If a contractor says he will do it for one rate and has an interview and then moves the goalposts, I will more likely say “sod him/her – Messer”. You want us to be more professional and then advocate that?

Another reason for having a set rate at submission is that I  never have a problem with getting a set rate from a contractor- unlike leads! I tell you about a job. You say yes/no. If yes, how much do you want?

That’s fine! Now it’s up to the client. Remember in the vast majority of cases they fix our margins. Therefore, we want as much for you as possible. We want you to get good rates.

Clients Are Our Friends

IT Contract Developer Rates
IT Contract Developer Rates can vary greatly

There are lots of people looking at the moment- If I think someone is messing around, or going to other interviews, I WILL LET THE CLIENT KNOW and recommend further interviews.

If my candidate drops out another agency could place their candidate. The days of picking and choosing contracts has gone in most but not all vertical markets

To be honest there is a lot of closeness between agencies and most clients. The bigger companies will have been courted for decades by established agencies on their preferred supplier list.

Not Complacent

We, obviously, are not complacent. We look after the clients on a regular basis. However, to be quite frank, we aren’t going to lose business because one contractor wants to play ‘silly buggers’.

Contractors are far more likely to piss us off. They will blot their copybooks for the foreseeable future, especially if it is down to greediness.

Whatever you think, and I can’t speak for every agency – God, I know there are terrible ones out there – but if we are on a PSL, then we act in a totally professional manner and they know us well. So, who do you think the client will side with?

Greedy Contractors

On the other hand if contractors are handled in a bad way, and it becomes a more regular thing, then they will chuck that agency off the list.

Contractors being greedy and changing the rules because they think that the clients are so in need, will not affect the relationship.

Contract Rate Rise at renewal time
Contract Rate Rise at renewal time

Most recruitment in the big companies is through HR, and to be honest they will not be quite as annoyed if someone doesn’t go in, as the hiring manager would be.

HR also love set procedures and in a lot of cases, if a set rate is not submitted, the CV won’t get further than the HR desk. Believe it or not this goes for reference contacts!

Please the Client

We try to be flexible with contracts and if anything can be changed to please a client or contractor we will do it. However, the contracts mirror each other, so if a client, for example, wants notice periods set up in a certain way then that stands.

We will not alter anything if the client is unhappy with it, or sets us up with legal and/or insurance problems.

Like I said, I can’t speak about every agency and to be honest I dislike intensely the majority of t***s that write on the foul mouthed site etc.

Good Agency and Good Contract Rates

The agency I work for, which shall remain nameless, is a large company with what I feel is a good to very good reputation mainly due to the ideals of the people who set it up quite a few years ago.

I hope that this could be deemed in a constructive manner. There are not set cases in everything and it vastly changes from company to company.

I appreciate what you are trying to achieve and I dislike agencies that are greedy with margins just as much as you do. However, there is no set ways on approach. Also, a lot of what is written is for a market that is gone and won’t come back.

Market Changed for Good

Even if the contract market takes off massively again, set margins and procedures are in place with companies who have tight PSL’s.

It is only the very small companies who don’t use contractors on a regular basis who don’t have PSL’s, and as they don’t have a regular budget for contractors, the charge is very small anyway with no room for large margins.

These days good contract rates have to be earned.

Regards
Xxxxxx

Comments

Is he correct? Are my comments way out of date? Do they not apply now?

See also our section Getting a Good Rate

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1 COMMENT

  1. Right now rate is king the client has all the power they know the market is over saturated with way too many applicants & few decent contracts so rates tumble & a lot of agencies will only put the cv’s forward for those who will take the lowest rate. The more experienced preferred applicants get binned without ever knowing why!

    I speak from personal experience the agent will go through the role over the phone with you but if they get enough people to accept the lower rate in the range they will be the only ones sent over to the client.

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