IT Contractor found Consultancy had mark up on him of 647 per cent

Mark up by Consutlancy for IT Contractor was outrageous

High Mark Up on IT Contractor Rate

This article, about the astonishing, and greedy, mark up put on an IT contractor by a consultancy, was posted in our comments section after one of our articles.

Consultancy Ripping IT Contractor Off

I worked for X software / consultancy once on a huge mark up.

They were paying me the equivalent of £108 per day and I discovered they were charging me out to their client at £800 per day.

Mark up by IT Consultancy
Mark up by IT Consultancy on new IT Contractor

When I asked them to explain the difference they put it in terms of ‘the free coffee we provide in the office’.

So I quit, split the difference, and went direct to their client on £400 per day. comment

It‘s strange how companies will pay different prices for the same person.

If the person goes direct they may pay £450 a day for him or her.

However, they may pay an agency £550 for the same person.

Again, they may pay £1,000 for the same person coming through a consultancy.

Treating Contractors Differently

When the above contractor wanted to go direct to the company they saw him differently again and would only agree a rate of half what they would pay the consultancy for the same person.

Contractor Going Direct to Client
Contractor Going Direct to Client

It just shows what a title means in terms of what a company will pay for someone.

If a company is sent a recent graduate, out of university just a few months, by a consultancy company and he, or she, is given the term consultant, even if he, or she. is only doing development work, companies are prepared to pay as much, or more, for this person as an experienced contractor.

It seems like a terrible waste of money for the company – and a terrible waste of potential money for the contractor.

It is all perception as they are getting the same job done.

How IT Contractors Present Themselves

IT Contractors must surely be able to think of a way to present themselves as a £1,000 a day person rather than a £400 a day person.

Direct Contracting for IT Contractors
Direct Contracting for IT Contractors

After all, we know that the client thinks they are worth that grand a day.

It would be nice if the IT Contractor could keep the mark up too.

However, even though I give out lots of advice here I can‘t think what it could be.

Anyone else got any thoughts?

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