Daily Rate Contractor. Recruiter taking too much @ 33% per day??

ChikiChiki

Hi

I am currently working as a daily rate contractor in the finance industry doing project management tasks. My initial 6 month contract is due to finish next week and I have been offered a further 6 months. I am quite happy in this role and really enjoy the team I work with and the travel opportunities it brings so am happy to extend. Upon discussing it with my recruiter a few weeks back, I indicated I was happy to stay at the same rate and will request an increase in 6 months time upon a further extension.

The recruiter has been slacking on getting the new contract out to me and I raised that here with my manager who contacted them. Just to show me that the issue was raised my manager forwarded the email and within the email was the rate my company are paying the agency. I was surprised to see that my recruiter is getting paid a full 33% above my daily rate off the company for each day worked. I.E: I am on E375 and recruiter is charging E500

I do not believe that is justified as I have maybe spoken to the recruiter twice within the 6 months and a good portion of that money should be going in my pocket. In essence they are making E625 a week off me. Personally I think they are taking too much and I am now tempted to ask for an increase of E75 per day leaving E50 per day to the recruiter.

Has anybody else been in this position before and how would you approach it?

skallywag

Is the situation that you are being paid by the Recruitment Agency, who are themselves being paid by the company?

If so then what you are describing is very common. It is also the case for the contractors that we currently employ, i.e. we know that a large chunk of the rate goes to the agency. If you have an issue with it you can try to approach the company directly, but for many reasons that may not be possible.

JMR

ChikiChiki wrote: »

Hi

I am currently working as a daily rate contractor in the finance industry doing project management tasks. My initial 6 month contract is due to finish next week and I have been offered a further 6 months. I am quite happy in this role and really enjoy the team I work with and the travel opportunities it brings so am happy to extend. Upon discussing it with my recruiter a few weeks back, I indicated I was happy to stay at the same rate and will request an increase in 6 months time upon a further extension.

The recruiter has been slacking on getting the new contract out to me and I raised that here with my manager who contacted them. Just to show me that the issue was raised my manager forwarded the email and within the email was the rate my company are paying the agency. I was surprised to see that my recruiter is getting paid a full 33% above my daily rate off the company for each day worked. I.E: I am on E375 and recruiter is charging E500

I do not believe that is justified as I have maybe spoken to the recruiter twice within the 6 months and a good portion of that money should be going in my pocket. In essence they are making E625 a week off me. Personally I think they are taking too much and I am now tempted to ask for an increase of E75 per day leaving E50 per day to the recruiter.

Has anybody else been in this position before and how would you approach it?

Would you have been able to secure the contract yourself, directly with the company without the agency?
I would think not, for a multitude of reasons.
Contractors based on customers sites (of which I am one by the way) often do not see the value in the agency as they may have little contact outside of invoicing once a month.

skallywag

JMR wrote: »

Contractors based on customers sites (of which I am one by the way) often do not see the value in the agency as they may have little contact outside of invoicing once a month.

This is very much also my experience.

For example we pay the agency two months after the work is done, whereas they pay the contractor upfront before they are paid themselves. Some agencies also offer some paid holidays, while we only pay for when the contractor actually works.

Your manager was a right idiot to forward the rate to you though all the same, it can obviously be a bone of contention.

The question you need to ask OP is were you happy with the rate that you are paid before you discovered this? If you think that it is unfair than you may be justified in bringing it up, but be advised that the agency are going to pass this increase on to the company, who may simply not accept it.

By the way, the way I would see it myself is that you are getting 75% of the overall rate, which in my own experience is actually not bad at all.

Krombopulos Michael

I was a DRC in dublin and the agency I worked with got about 100euro a day from the rate. But they did place me in the role and when it was coming to an end, they had other options available to me.

When working for said company, found out they only hired via 2 agency's and never dealt with applications directly so my only way into the role was via the agency.

whoopsadaisy

€375 per day works out as an annualised salary of €97,500 per annum (if a permanent role). At that level, 25-30% would be the norm for an agency fee. Contract positions always come with an additional mark-up due to payroll and other administrative costs. Given that I reckon 33% sounds exactly right for the agency.

The market is extremely tight, we're at full employment. If companies could hire directly and avoid paying out so much in agency fees then they would. It is highly likely that they would not have the resources to get you to where you are now without agency assistance.

As skallywag pointed out, if you decide to demand an increase of €75 per day, that is not going to reduce the agency fee down to €50 per day. It is going to increase the cost to the employer from €500 to €600 which they quite likely wouldn't be too happy about.

I would imagine you found the rate you were offered to be fair at the time or you wouldn't have accepted. The additional % charged, and the relationship between the agency and the employer, is really nothing to do with you.

ChikiChiki

Thank you to everyone for your input so far. It is helping me understand the overall picture much better. Now is not the time for an increase but I am delivering to my objectives so I will approach the issue again in 6 months time where I will have bigger case of achievements.

In fairness, I like the environment and there is much more autonomy about the role than I have ever had before which I am thriving in. I have had higher rate offers via LinkedIn but would be reluctant to move as the work/life balance is right for me here. Money cannot buy that.

Krombopulos Michael

in 6 months, the approach may be to your agency to have them reduce their daily fee and increase yours, with no impact to the company you're working for.

CrabRevolution

Is it the case that your rate is X, and the agency charges the business X+33%, or that your rate is X, but the agency takes 33% and you only get 66% of X?

My only agency experience was through the HSE, and you were entitled to the same pay as full time contracted workers. I saw my invoices and the weekly bill to the HSE was a good bit higher than my gross wages, but I don't see how it could be classed as stealing from me. It was never my money, and I was being paid the agreed rate. The money on top of that is a separate business transaction between the agency and the customer, not my business.

Do you know if this included VAT? I know the HSE were charged VAT on my services, on top of the commission etc., so for every €1 I got paid, the price to the HSE was over €1.50.