Charities – Contractors must remember we’re not charities says agent

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Agency Charities

This article is from an agent, telling contractors that they are not charities.

This response to one of our articles, ‘Advice to agencies – 10 ways to keep contractors happy’ came when Aussie contractor site www.Brainbox.com.au picked it up.

Started My Own Agency

I’ll start by saying:

“You cannot please all the people all the time”.

I have a technical background and have been a contractor, employee and employer.

As with the strong sentiment on this site I didn’t like agencies, and still don’t like, most of them. However, I was not prepared to sit on the side lines and whinge about it. So I started an IT recruitment agency a few years ago.

I have taken all mine and my associates experience in creating a different (from the pack that is) agency.

While not charities, we are different in that we do the following: (in relation to the points in the original article).

Pay on Time

Yes.

Names Fee Up Front

Always disclose when our margin to both clients and contractors when requested. As the UK recruiter pointed out, it’s the client paying us for OUR service, not the contractor.

No Spamming References

We do not engage in this practice.

No Fake Job Adverts

We have never engaged in this practice, as it has peed me off in the past also.

You might be interested in checking out www.it2.com.au. This is the ITCRA job board, where only ITCRA members can advertise.

All ITCRA members are bound by a code of conduct which stipulates you only advertise ‘real’ jobs.

If you find a member breaching this on this site I am quite certain ITCRA will act on this.

Have Client / Customer Relationship

We do this in a variety of ways: lunches, coffee’s, morning tea/cakes. However, this has to we balance  thiswith the margin we make on the assignment, as not all our assignments make the margins quoted on this site (say 20%).

Keep Out of Hair

Most of our contractors like us to communicate with them on a regular basis, as we treat them like employees who happen to work on a remote site.

I have worked as a contractor and on my own as a small business. It is nice to have someone that you can talk to about problems or issues with the site you are on.

In the case a contractor does not want us to provide account management, we leave them be.

Reduce Cut at Renewal

This is a reasonable concept, as we actually employ this as part of our on-going relationship with clients and contractors.

However, you should not expect agencies to drop their margin after 3 months. They may not have recovered direct costs, let alone make some sort of profit.

What you also need to remember is that invoicing is not a free task. Not only are there costs with generating the invoice, but there are costs in collecting the funds.

If you are happy to wait the sometimes 45+ days for payment, and that’s after you making dozens of calls and resending invoices, then go for it.

But if you like payment weekly/fortnightly/monthly, use an agency.

Remember, you get paid hourly/daily for your time, our time does not come for free on the administrative tasks either.

Pay Commission to Contractors who find contractors or opportunities

On-going commission.

Well you now have just increased the agencies margin to pay another sales person, who only provided the introduction and did not actually make the sale and will not provide any on-going service.

So why should you receive an on-going commission when you will not be providing any further benefit?

Using this analogy I should approach all my clients where we have filled a permanent role and ask them to provide me with a fee until the employee leaves the company.

I believe in paying for value and service, that is why I started my recruitment company, as I didn’t believe that agencies were doing this.

IR35 Free Contracts

We have actually performed research at our own cost and collated information for our company contractors on the alienation of personal services income tax.

We have amended our agreements to assist our company contractors meet the various rules tests.

As I mentioned above, contractors time is not free neither is ours.

Take Out Restrictive Clauses

I believe that there should be some restriction, 12 months is too long and would be very difficult to enforce under the Trade Practices Act, as the agency has invested in obtaining and maintaining the relationship with the client.

Obtaining new clients is an expensive exercise. Most sales and motivational books highlight the fact that it costs you much more to obtain a client than it is to maintain one.

Having said that, people move, so quite often a company may need to be ‘obtained’ again when a new person arrives).

With regards to this stopping you from having a small business, that’s just not true, as I have started several small businesses even with the “non-engagement” restrictions.

What it means is that you have to work harder and become a sales person to secure another client.

Agency Margins

To summarise, I have unfortunately had the experience of meeting contractors who still want us to make no margin on their assignments, or expect us to provide the highest levels of service for a fee of $3 per hour. We are not charities. I admit it is the minority.

It is also unfortunate that there are still quite a large number of agencies that do misbehave.

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