Terrence Brannon wrote:
I should look at my expenses and spending habits and bill for a rate
that gives me a reasonable cushion above that and quit worrying about
whether or not the agency is making a killing off of me.
Just be careful when doing a cost based analysis. It's useful to do in
order to determine whether you should stick with contracting or not, but
it is less useful when it comes to setting your price. You may determine
that you need to make $Y/hr to meet your targets, but that doesn't
necessarily mean an employer will pay that. Similarly, even if you only
need to make $Y/hr, if the market rate is higher, that's what you should
negotiate for. The tricky part is determining the market rate, taking
into account all the variables.
Larson Rider wrote:
...try to bid me down so that they can clear a higher margin.
They absolutely do on both points. Obviously they have a financial
incentive to do so.
Most common reason for bidding you down is that your
rate does not fit what the client thinks they ought to pay...
Yes, that's probably true.
But that doesn't invalidate the fact that agencies have a financial
incentive to pay as little as they can to the consultant. Whether it is
a strong incentive or one they act on is another matter.
...mostly because client companies low ball rates.
My purely anecdotal observation is that companies seeking commodity
temporary workers are the ones more likely to use agencies, which might
explain the correlation to low rates.
At one time I heard it was typical for agencies to add a 30% markup...
Markups range from 40% to 55... Some charge up to 70%.
My information is perhaps 10 years old, so I don't dispute your numbers.
My personal experience has been that a lot of agencies that used to be
in the contract field have moved into permanent placement...
The trend was the opposite in the 1990's. The contract market boomed and
engineers could make much more contracting. That is not so much the case
anymore.
Yes, it seemed around 1998 or 1999 things shifted towards permanent
placement. There was lots of capital flowing into tech companies, lots
of stock incentives to offer, and everyone had an optimistic all-growth
outlook, so hiring people full time seemed like the cheaper alternative
to using contractors.
I tend to believe that with the average job duration shrinking the
industry also started to learn that they could hire and fire people
fairly inexpensively, so the traditional lure of using contracting
agencies for temporary workers faded.
So while the Internet was what enabled it, it was not the
direct connection to companies that became the phenomena, it was the
ability to have the work done offshore for $15 an hour that would cost
$80 an hour in California.
Perhaps. We see now that a not insignificant percentage of the ads on
the perl jobs list are for jobs in India.
-Tom
--
Tom Metro
Venture Logic, Newton, MA, USA
"Enterprise solutions through open source."
Professional Profile: http://tmetro.venturelogic.com/
