This is how an agent engaged in outwitting contractors when it came to the contract renewal rate rise.
Confessions of an Agent. Tales from the Other Side.
Outwitting Contractors – Recruitment Industry Tricks
Once again I must point out that I am no longer in the recruitment industry. I write these articles simply because the proprietor of ITContractor asked me to. It’s to give contractors an inside into what happens ‘on the other side‘.
After the previous articles this one now explains how we manage to extract more money from contractors at renewal time.
Hopefully I already have a good cut of what a contractor is earning from the client. However you are under pressure in your office from your bosses to bring more money in.
You can try as much as you like to get new business but sometimes enough of it just isn‘t there.
Therefore you have to make your existing assets sweat, i.e. the contractors that you already have out.
Renewal Time for Contractors
The best time for that is at renewal time. That’s when the cat and mouse game between the contractors and the recruitment consultants continues. However, normally we are more than a match for them.
Indeed many contractors are a bit wet behind the ears and simply believe anything you tell them.
Often contractors will supply you with the ammunition to help get you a rise.
The first thing that you must do is to talk to the contractor himself (or herself) in order to find out if they want a renewal. The contractor may also ask you to obtain a rise at this stage.
‘We‘ll do our best’ you‘ll say.
‘Can you give any good reasons why you should get a rise’?
Hopefully the contractor will give you the ammunition to be able to get something more out of the client.
Contacting the Client
When you contact the client you will first enquire as to whether the client has an interest in renewing the contractor.
If he or she has an interest then the negotiations begin.
If the client is dead set against a rise then it is not worth pushing it as you don‘t want to lose the business.
However, if they are susceptible, then try to get a feel for how the client thinks that the contractor has performed. Even if he, or she, makes some criticisms then finish by asking what good points the contractor has. That leaves him thinking positively about the contractor.
Add some reasons of your own, gleamed from what the contractor has said.
Contractor’s Business Knowledge
Say also that the contractor has now picked up a lot of business knowledge of the client‘s business as well as knowledge of the client‘s systems which added to the skills knowledge that he or she brought with him makes him or her a far more valuable asset to the client.
If the client were to replace the contractor with somebody else it would be someone without the business and systems knowledge of the company – and it would also take way the time of others gainfully employed on the project to explain it and pass information across.
Normally you can get some kind of a rise here.
Keeping Renewal Rise
Once you‘ve got the rise out of the client then you must try to keep as much as possible for yourself.
The worst possible scenario here is that you have to hand over the whole of the rise to the contractor. The best scenario is that you keep the lot. The neutral scenario is that the rise goes to each of you in the same percentages as the previous contract, e.g. 80/20 in the contractor‘s favour.
However, the neutral position is your short stop. You need to try and get a bit more.
Outwitting Contractor – No Contract Renewal Rise
The first plan of action is to tell the contractor that there is no rise at all, i.e. that while the client is happy with his or her work that there is no more money on the table.
Many contractors will simply accept this. In fact the majority of them will – with a bit of a whine. Very few will actually say that they are turning down the offer and are leaving.
If they do kick up a stink about it you say that you will go back to the client and ask for some more, but that the contractor is potentially jeopardising his or her prospects by demanding more.
Of course you wouldn‘t normally go back to the client. You would just leave the contractor sweating for a while before getting back to them.
Offer to the Contractor
When you do get back to them you should have decided by then how much to offer the contractor out of the rise you have obtained. I tended to go for 50/50. You don‘t want to be too greedy.
Almost always, those that are remaining will take this new offer. If they do stick out then you may have to give them 80%, or, heaven forbid 100% of the renewal rise – but if you are any good this won‘t happen very often.
Outwitting Contractors is not that hard.
I have come across a few tartar contractors before, including, I may say, the proprietor of ITContractor who I placed twice, but the great majority just take what you say at face value and accept what you decide to give them.
Now, I am not trying to justify what I have done in the past but I suppose this is a kind of ‘Act of Contrition‘ on my part so that contractors are better prepared when it comes to dealing with agencies in the future.
Outwitting agencies can be just as easy as outwitting contractors.
To be forewarned is to be forearmed!
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