Re: How much should staffing agencies get above my hourly billable rate?

Terrence Brannon wrote:
> ...the agency that contacts me has a clear understanding of the...
> rate that the company will pay per hour.
> ...instead of telling me this and how this will be
> divvied up between me and them...

It's obviously not in their interest to divulge that information, and 
unless you've developed a long-term relationship with an agency, it is 
unlikely they will ever disclose the details.


> So, my feeling is the agencies sometimes (a) don't put all the cards
> on the table (b) try to bid me down so that they can clear a higher
> margin.

They absolutely do on both points. Obviously they have a financial 
incentive to do so.


> "How much would you take for this position?" And of course my
> answer is: "As much as I can get, I will never be satisfied unless I
> am getting 1 million or 2 (or 10!) per year for my work" And then they
> reply, "Ok, but how much would you find acceptable for this?" And then
> when I relent and give them a figure, they usually seem to try to bid
> it down 5 or 10 dollars.

At one time I heard it was typical for agencies to add a 30% markup on 
the hourly rate, but in reality it varies widely, and in the end it 
doesn't really matter what the number is. If an agency is taking a huge 
cut, and you happen to find out about it, your only recourse is to avoid 
doing business with that agency.

Ultimately this comes down to a matter of pricing your services, which 
is independent of whether an agency is involved. If you've determined 
that you are worth $x/hr and the agency is offering less than that, and 
you can get that rate elsewhere, walk away from the deal. If you can't 
get a better rate elsewhere, then the market is telling you you need to 
adjust your rate.

What the agency might be making out of the deal is irrelevant. The 
difference should show up to the employer, who, for whatever reason, has 
decided that the (perceived) extra services the agency provides are 
worth the extra cost.

Similarly, if you think the agency offers benefits to you (insurance, 
W2, whatever), then it would make sense if you discounted your rate. For 
example, it's common to knock off 15% when going from 1099 to W2.


> ...I agreed to 47/hour w-2. But a staffer just posted the same
> position on the la perl mongers list for 55-60 per hour. 

If you think that same employer is doing direct hires at a higher rate 
than you're getting from the agency, then it's up to you to find those 
job postings and apply directly.

If you found this job posting, then what do you need the agency for?


My personal experience has been that a lot of agencies that used to be 
in the contract field have moved into permanent placement, and the 
Internet has somewhat helped facilitate a direct market between 
consultants and employers, making agencies less relevant. It's still a 
long way from where it should be, though...

  -Tom

-- 
Tom Metro
Venture Logic, Newton, MA, USA
"Enterprise solutions through open source."
Professional Profile: http://tmetro.venturelogic.com/