Agency Administration | How to Cash in if your Agency goes bust

Agency Administration - When Agencies Go Into It
Agency Administration - When Agencies Go Into It

Agency Adminsitration


Here’s how to turn an agency administration to your advantage.

So you hear that your agency goes into administration.

What do you do?

Most contractors do nothing at first.

Well, what they do is contact their normal agent and asks what is happening with the administration.

The agent will play for time, hoping that his or her own job is secure. He, or she, will normally come out with some cock and bull story, probably given to them by the company, about how there is only a temporary problem, and that normal service will resume shortly.

Recruitment Consultant
Recruitment Consulant for Contract Agency

This is garbage. However, if the contractor just waits and does nothing, then a lot more of their money is likely to be going down the pan.

Act Immediately

They must act immediately when they find out there is a problem.

However, there is one way that they can take advantage of the situation.

They can try and buy their contract out from the administrator or liquidator and ditch their agency. This wll probably be for quite a lot less than it is worth.

They will especially find it easy if they have one of those clauses in their contract which say that the contract is null and void if either side goes into administration.

Check Contract for Agency Administration Clause

Have a look in your contract to see if that administration clause is there.

There’s a good chance that the agency administration clause is there.

If so, then you are in the clear and no longer have a contract with them.

You could then contact the client and tell them that you will be going direct in the future.

Agency Commission

However, there is a way that is even better.

Dodgy Agencies
Dodgy Agencies that trick contractors

If you go direct the chances are that the client will take most of the agent’s commission and you won’t get that much more.

They might even take the lot.

It is highly unlikely that you will get the lot.

Buy Them Out

What you could do is to contact the administrator and ask to buy out your contract. You may be surprised to find out how little he is prepared to sell it for.

Say, for example, that you have three months left on contract, where the agent is taking 20% out of 1,500 quid a week.

That means that their commission is 300 quid a week – or 3,900 quid for the full 3 months. Make an offer to them of 2 grand for it.

He, or she, will snap off your hand as the contract is null and void anyway if you have that precious clause in your contract.

What this means is that for the rest of the three month contract you and the liquidator will be splitting the agent’s commission.

Real Opportunity from Agency Administration

Your real opportunity will be when it comes to contract renewal time.

The liquidator will be out of the picture then, as you will have bought the contract for a fixed sum.

Bust Agency
Bust Agency

Therefore, you can up your weekly rate from 1,200 a week to 1,500 a week even without getting an increase at renewal time.

You will also be rid of that restrictive agency clause that stops you trying to get any more business from the client.

This could be just the opportunity that you need to turn yourself from a one man band into a company that will have residual value.

This agency administration could be the opportunity of a lifetime – so reach out and take it.



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