Taking Contractors Money
“Taking Contractors Money – How to Take More of it Agent’s Confession” is a follow-up article to ‘Confessions of an Agent – How to hook your contractor’.
It deals with negotiation after an IT contractor has passes the interview and the client offers him the IT contract. This is one agent’s experience of how to take more of contractors money at that stage.
Talking Contractors Money by Stealth
Now comes the money bit.
An IT contractor will normally have told you what his rate is or alternatively you may have told him what the rate for the jobs is.
The IT contractor may try to bump up his rate after he hears that he has the job.
Any recruitment consultant worth his, or her, salt should be able to deal with that. Unless the contractor already has another job in his pocket it is almost certainly a bluff.
They are not in the same league of negotiators as we are. After all, we are doing it every day and they are just doing it once every few months at the most.
Opportunity for More Money
However, there is still some opportunity to take more of contractors money.
You may have put the IT contractor forward for £500 a day, out of which the contractor has asked for £400.
You‘ve got your 20% commission which is quite good but there is still a chance of a drop more.
It is not worth trying this with everybody, but if the contractor is not very experienced or he doesn‘t seem very streetwise (quite common) then it‘s worth giving it a shot.
Problem With the Client
What you say is that he has got the job but thee is a bit of a problem with the IT client. Say that he or she cannot pay more than £375 a day.
This is usually garbage as the client knows the price before the contractor goes to interview. When they say they want the contractor they also mean that they have accepted the price.
However, the contractor is not to know that.
To be frank, it is a bluff on behalf of the IT recruitment consultant.
Contractor’s Three Options
The contractor has three options here:-
1) He can simply say No to the job
2) He can stick to his price
3) He accepts the £25 a day cut
The first one seldom ever happens. IT Contractors seldom, in my experience, do things on principle.
The second one happens often. We usually win but if a contractor does stick out we tell him we‘ll get back to the client and see if he‘ll pay more. Of course we don‘t, but we let the contractor sweat for an hour or two.
Then I would get back to him and say that the IT client would go up as far as £385 but would go no further. It‘s not worth the contractor turning down a sure-fire contract for just 15 quid a day.
He‘s probably been sweating for an hour wondering if he has lost the IT contract. Sometimes they‘ll even phone up and ‘surrender‘.
However, what happens in most case is that the contractor simply accepts a rate cut to £375 a day.
Agency Bragging Rights
That means that I now have a margin of 25% instead of 20%.
At several of the IT agencies where I have worked you are rewarded for getting high commissions. The higher the margin is, the higher the percentage that you are able to get in commission yourself.
You also have bragging rights amongst you peers. Recruitment Consultants who can get the highest margins from contractors are normally looked up to by their peers in the office.
Management are usually very pleased too and you let them know right away.
You are also more likely, therefore, to get promoted if you get higher commissions that the others.
Taking Contractors Money – Poker Game
We never thought that we were doing anything wrong here. We believed it was up to IT contractors to look after themselves.
It‘s like a game of poker with the better players making the most money.
I‘ve met few contractors who were a match for recruitment consultants as far as negotiating is concerned, although the current website proprietor of ITContractor.com gave me a few problems when I got him his two contracts – especially at renewal time. He brought up a few cards from the bottom of the deck himself.
However, most IT contractors are fairly naive when it comes to negotiating.
As I said in a previous article I am out of the game now and I write these articles, firstly because I was asked to do so, but mostly to help educate contractors as regards helping them to deal with IT agencies and recruitment consultants.
There are lots of opportunities to take more of contractors money. We always took them.
Taking contractors money was easy for us.
Being forewarned is being forearmed!
and How to Steal a Contractors job and