RE: Seeking assistance-contract rates

Subject: RE: Seeking assistance-contract rates
From: "Murrell, Thomas" <TMurrell -at- alldata -dot- net>
Date: Mon, 21 Feb 2000 09:02:25 -0500

> I have been offered a contract position through a nationwide recruiting
> agency. My concerns are three fold -
> 1 - I understand that agencies may charge clients anywhere from 25% to
> 100% of the rate they offer consultants. In other words...the agency pays
> the
> consultant $45 per hour, but they collect $75 to $90 per hour from the
> client. Is this correct??
The numbers you quote sound reasonable to me. These agencies have to make
money somehow. Most choose to factor their overhead and profit needs in on
top of the fee they need to pay the skill they are placing in the job. The
agency serves as a go-between. They contact, and contract with, the
companies that have the positions needing filled. Then they contact with
the individual skills (not just writers) to meet those needs. The amount
they charge over your rate indicates what they see as their costs plus a
profit. The companies who use agencies will try to drive the agency rate
down, of course, just as the agency works to keep your rate in line with
their perception of your marketability.

> 2 - This would be an hourly rate contract, at 40 hours per week. Is the
> agency obligated to pay time and a half for overtime? Or just straight
> rate regardless of the total number of hours per week?? BTW...Peter Kent
> discusses this topic in this book and seems to be of the opinion that
> contractors
> should receive OT pay, at time and a half.
Overtime is one of those things you need to ask the agency about. Is
overtime expected on the contract? If so, how much and at what rate? If
not, but overtime might come up (assume that it will) negotiate it into your
contract, or negotiate it away for something else. Again, remember that the
agency is there to make money, just as you are. If you price yourself too
high, they'll go elsewhere, just as their clients will go elsewhere if the
agency prices their services too high.

> 3 - The recruiter mentioned I would need to sign a contract....any
> insights or web sites to recommend on what to watch out for when signing a
> contract??
Assume that you are a business, just as the agency is a business and the
agency's client is a business. Negotiate your position as you would in
business. Negotiation is give and take. Read the contract. Ask for the
changes you want and be prepared to negotiate everything in the contract.

It might also be useful to put yourself in the agency's place. If they pay
you $45 and need to charge $90, what happens when overtime occurs? Will
they get an overtime rate for your services, if they pay you at an overtime
rate? Remember, if they don't make money on your services, they will look
elsewhere for someone they can make money on.

Tom Murrell

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