Do agencies really pay referral fees – A Contractor Asks

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Referral Fees from Agencies
Referral Fees from Agencies for supplying IT Contractors

Referral Fees from Agencies

This article about referral fees paid by agencies was sent to us by Alan seeking our advice/

Agencies Referral Fees

Dr McLaughlin, as I‘ve gone round the sites I‘ve met up with quite a few contractors.

Agencies have said that they‘ll give me a referral fee, usually about £150 if they find any of the candidates I put forward to them contracts.

Golden Rules of IT Contracting
Golden Rules of IT Contracting – if you want to get rich

However, although I‘ve put through quite a lot of contractors to them over the past few years I‘ve never received any money.

Surely they must have found some of them work.

Have you ever had a referral fee from an agency Dr McLaughlin.

Dr McLaughlin‘s IT Contractor Surgery

Yes I have Alan, quite a few times. However, that’s only when the agency knew that I knew that the person I‘d put forward had got a job through them.

In fact it was often at sites where I knew a contract job was on offer and I knew someone who would fit the bill.

I would contact the agency, give them the contractor‘s details and quite a few times the contractor got the job. That’s especially after I recommended them.

That was pretty dumb of me.

Agencies Do Nothing

The agency had to do virtually nothing except send out the monthly invoice and collect the money for the freelancers put through to them.

Contractors are the Goose
Contractors are the Goose that lays the golden egg

All I made was about £150 each from them while the agency creamed in hundreds a week from each one.

After the first one or two I should have gone directly to the client and said ‘You‘ve taken a couple of people through me and you‘ve liked the job they‘ve done. I know quite a few more contractors with the same skills and just as good. However, I think you would agree that I‘m doing all the matchmaking whilst the agency make all the money which isn‘t really fair.

‘I‘m happy to continue to get you good contractors. However, it doesn‘t make sense to keep feeding them to you via an agency. I‘d like to supply the contractor myself. What do you say?’

Direct IT Contractors

Of course there may be problems in terms of whether they would be allowed to take contractors through you. However, there may not be.

Most people are fair. They would see the unfairness of you doing the work and the matchmaking and the agency taking all the cash.

Even if they don‘t take them directly through you I‘m sure that they could work something out where you would benefit – and they may be happy enough to take the contractor through you.

Stung by an Agency
IT Contractor Stung by an Agency

It could be that they took them direct and gave you a £500 bonus or something like that.

Referral Fees – Contractors Put Forward

Now, as regards contractors that I put forward to an agency that the agency knew that I didn‘t know that they‘d got them jobs, it happened twice that I found out about (and there were probably more) – but the agency didn‘t get in touch to say ‘Hey, we owe you some money’.

I had to get in touch with them and ask them for the money.

One paid up promptly but I had to keep phoning the other one to ask him where it was.

He wasn‘t very gracious when he had to hand it over in the end when I said I was going to contact his boss.

Agents and Agencies

So, there you have it.

It‘s a small sample, I know and other people might give you different advice from their own experiences.

Of course, not all agents and agencies are the same.

However, it is fair to say that if you are going to recommend contractors to agencies, it might be an idea to keep the contact details of those contractors and to contact them down the line to see if they have ever had work through the agency.

Just in case…

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