Contractors complain constantly to the Contractor Doctor that their agency is ripping them off by taking ‘huge’ margins, including restrictive covenants in contracts and insisting that contractors complete contracts they signed up to, rather than skipping to a better-paid contract elsewhere. But in most cases agencies are simply doing good business and are not ‘dodgy’. Too often, contractors’ poor negotiation skills are where the fault lies.
The stories of those contractors who have genuine cause to complain about their treatment at the hands of recruiters feature regularly on the Contractor Doctor’s pages, with ContractorCalculator’s Expert Contributors helping them find solutions. Some of the underhand tricks a tiny minority of agents try on contractors are shocking, and it is right that they should be exposed.
But many contractors are highly critical of agencies that take what they see as high margins, or higher-than-reasonable margins. Other contractors don’t believe margins should be made by agents, full stop. However, except where the recruiter has a fixed-rate margin agreement in place with the client, margins are there to be negotiated, because recruiter and contractors are both businesses.
If contractors feel so strongly about reducing their margins, they should stop complaining and instead sharpen their negotiation skills to ensure they achieve a better deal on future contracts.
Think of it like this. Let’s say you decided to start a magazine and needed to find a printer. There’s one down the road, nice and convenient, who provides a quote at £X per issue, and offers a good reduction if you sign up for 12 months. You do the deal. Then you find out that the printer is charging you above the going rate and is making a particularly good margin on your business.
Whose fault is that? The printer’s, for being an effective negotiator and businessperson? Or yours, for not bothering to check market demand and pricing for magazine printing services, and then negotiating the printer down to a price that is at or below the market-based price.
It’s the same with a contract. When contractors [get ripped off] [negotiate poorly] (delete as applicable) by a [dodgy agent] [savvy businessperson] (delete as applicable) they should direct their anger and frustration inwards, and give themselves a good talking to.
Business negotiation isn't part of the “It's not my fault” society, in which if you blindly walk down the road after a few drinks and push past a danger sign before falling into a hole you can sue the council. No, if you blindly go into business-to-business negotiations and strike a bad deal then it's absolutely your own fault, and not anybody else’s.
Contractors must take responsibility for their failures in negotiation and learn how to do it better. For a start, they could read the expert advice and winning tips in chapters 5 and 10 of the Contractors’ Handbook. Then they’ll be in a position to negotiate themselves better deals, and will be able to put failures behind them and take responsibility for their successes.