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I work in a town where the majority of work comes from the government. As a contractor, I generally have to apply for work through agencies which are on the government's preferred vendor's list.

Most jobs are publicly listed and to apply for them, you generally need an agency to represent you by submitting your application with a rate which is usually your rate plus their commission.

I've been trying to figure out what the agencies do, and it seems a large part of what they do is 1) get on that preferred vendor's list and 2) forward resumes.

So right now, my policy is that since their commission affects how expensive I am, one - I don't work with companies that do not disclose their margin. And two, I go for the agency that takes the least amount of commission for the job I want to apply for.

IS that the best approach? I would think applying for a job with the most competitive rate is the best approach but I also wonder whether which agency you're applying through actually matter?

I know some agencies actually build personal relationships with senior managers but how do I know which one? How do I know that actually affect my job prospects?

What criteria should I use to decide which agent I go through for the job?

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closed as off topic by Thomas Owens Mar 13 '12 at 16:52

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My sympathies. Extremely morbid situation to be in. –  Fanatic23 Mar 5 '11 at 13:25
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@Fanatic23 : the difference between agency rates are pretty massive, we're talking several thousand dollars per year. If I'm going with a more expensive agency, I would like proof they are improve my odds of getting the job –  RoboShop Mar 5 '11 at 13:28
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Wouldn't this be better asked at the Professional Matters site? (When it makes beta, anyway). –  Cyclops Mar 13 '12 at 13:34
    
This question, in its present form, is off-topic here on Programmers since it is not a matter unique to professionals in the software field nor does it require any unique insights from the education and experiences of software developers. You may be interested in The Workplace Stack Exchange proposal, which is currently in the commital phase. –  Thomas Owens Mar 13 '12 at 16:52

5 Answers 5

I was exactly like you. I was shocked about how much they could make on my back with so little efforts. I was wrong.

I cared too much about what they earned, while I should have cared more about what I earned.

I said to myself: if you dislike the rules of the game, don't play or it will hurts.

But I did choose another strategy that worked very well for me:

  • do not care about what you can't possibly control (their commission) and focus yourself on what you can control:

Your rate

Be firm and don't negotiate it. Never. Only accept increases.

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I've worked as a contractor for several years at various positions through multiple agencies. I've found that it isn't the agency that really matters. It's the specific recruiter/account manager that you work with at that agency. Like any job, some of them are fantastic, will work hard to promote you and build relationships with area companies, while others will just "mail it in", doing only the minimum. It's really impossible to judge it by agency.

What you should do is build relationships with several recruiters. Watch how they act when you meet them. Are they organized? Are they providing leads? Are they proactive in calling you, or do you have have to get in touch with them to learn anything.

And remember, you don't have to limit yourself to a single agency. Build a relationship with several of the ones that seem the best to you. Avoid any agency that wants you to sign an exclusive contract with them (few try to do that anymore). The only catch with that is that you have to be proactive in keeping track of what positions each of them submits your resume to as a candidate.

Make it clear to them that they must discuss any potential submissions with you before submitting. This is so you can keep track and avoid multiple submissions, but don't tell them that :). No recruiter worth having should be submitting your resume without discussing a position with you first anyway. If a hiring manager gets your resume from four different recruiters, it can be a mark against you in their mind.

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+1 for ensuring a recruiter doesn't submit your resume without first discussing the position with you. Also worth mentioning is if you are working with multiple agencies, be sure to tell each of them that you are working with other agencies as well; you don't have to disclose the other agency names. –  Metro Smurf Mar 5 '11 at 19:28

I would go and meet with several of them until you find one that you like. It is going to be about 95% about relationships so you need an agent that is top notch. Talk to you friends and see who they work with and if they are happy, and if so get references.

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Contractors have to deal with this a lot, so I wonder why there isn't some underground website like glassdoor for contracting agencies. If contractors shared information, we'd ideally weed out the bad agencies, though of course the reality is much more difficult than the theory.

Re: Only picking honest agencies

I like your intentions of not working with agencies that don't disclose their margins to you. If they won't tell, you, that's sort of an admission they're screwing you, isn't it? Unfortunately, I have encountered a couple issues in this approach.

  1. The number of agencies that will provide full transparency in billing is about the same as the number of honest politicians and car salesmen out there. That is, there are indeed honest salesmen and politicians but they are rare. The margins to be made in the human trafficking trade for IT are too high and too easily had to give up to the status quo of doing things the old way.
  2. If the honest vendor doesn't have a spot on a client's approved vendors list, well, you'll find the sad truth that honor and a dollar might not be enough to buy a cup of coffee. You have to play the game sometimes, and that means going with an agent that has a connection. When you're between gigs, and if you don't already have an absolutely ripping network of your own, then you don't have a choice. You depend on them, they get you a job, and they make a boatload of money off you. I agree it's unnerving at times to think that you're the one in the trenches doing the work and they're making anywhere from 20 to 50% of the rate. Heck, it's more than unnerving, it ought to be illegal, like indentured servitude or sweat shops, but the alternative is worse: you could both be making 100% of zero. At the end of the day if you're getting a good rate and able to take care of your family, be thankful.

Re: Picking the agency with the lowest commission

This seems too like the logical choice, doesn't it? Of course, knowing this depends on the agency being honest. Even if you can find and compare the rate breakdowns, you'll have to take into account a variety of other factors, just as you would with any potential employer. In other words, it depends. Consider these options:

  • Vendor A has a 10% margin and goes corp-to-corp with you. No other benefits or assistance. It's an individual business where the guy has a few contacts in some companies that trust him and he himself is still a consultant programmer that works, so this is something he does on the side to bring in a little extra cash and help out friends when he can.
  • Vendor B is a typical mid-sized body shop. They take a 35% margin, though you don't know that because if they're truly typical, they won't tell you. But they are very established, they have lots of agents working with nearly every major company in the city and they offer a few benefits:

    • They'll record you as an employee so your tax paperwork is taken care of and they pay their share of the employment tax.
    • They check in on you regularly and buy you a nice lunch and keep you up to date on the goings on with the client. Maybe they can clue you when something is going to happen and can help get your next gig lined up so you have minimal downtime.
    • Access to the company 401K. They won't match for employees paid hourly, but you can invest with no additional administrative costs
    • Group health care plan. You pay the premium, but it's better coverage than what you get with an individual plan.
    • Training provisions (this is a bit of a pipe dream, but I have had vendors that reimbursed books or paid for a class once in a while).
    • Company-like atmosphere. Ok, now this is a reason a lot of people actually leave full-time jobs and go consulting, but others may appreciate company gatherings, a nice holiday party that you attend with your spouse, regular happy hour events, and a general sense of belonging to an organization.
    • Work insurance. I forgot the formal terminology for it, but some clients require contractors to be insured for cases of severe misdeed (you got a support call at 2am and typed "Delete from customers" on accident). Some vendors will take care of this for you.
  • Vendor C is a huge corporation. You won't know what their margins are but they'll be disgustingly high to account for their overhead, you'll probably get a salary instead of an hourly rate, and they'll have a presence around the world (think Accenture or EDS). Their sheer size means it's a total crapshot how you'll be treated but also means you'll have decent healthcare and plenty of process cruft.

There's no doubt Vendor A gives you the fairest shake on the rate, assuming all three vendors negotiate the same rate from the client (and that's not a guarantee, Vendor B and C may have leverage or more persuasive agents). If you can string together a lot of gigs with Vendor A, you'll do really well and be able to buy all of your own benefits. The tradeoff to take a job with Vendor B or C will cost you but unfortunately, I have found that in some cases you may only be able to get a job with a B or C. And while I sporadically encounter vendors like Vendor A and Vendor C, there's a large continuum between them where the various Vendor Bs can fall.

In conclusion, I don't think your rules are wrong at all. But you will encounter times when it doesn't always work out. You might have to bend those rules on occasion.

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I'd say some tips to consider are:

  • Is it a specific industry or a general agency? If specialised, they may have contacts with employers in your area of expertise, increasing your chances of work
  • Research online for reviews of the agency your planning to choose
  • Ask the agency their success rates in placing candidates and their experience of workers in your industry
  • Use your instinct. Recruitment agencies contact clients on your behalf, so think about your prospective client will perceive them.

If you want further pointers on dealing with a recruitment agency see these tips

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