Regular readers will know I have never had a lot of respect for the average agency, thinking that most of them exhibit a degree of professional casualness totally at odds with their advertising. Today, for example, I got another email offering me work as a support technician in the Midlands at a whole £20k a year. Be still my beating heart.

But this week, one of them has managed to surpass even that fairly mediocre level of success.

Someone in Hays thought it a good idea to remind the people contracting through them to RBS to complete their timesheets prior to the bank holiday weekend. So they sent out an email, with, for some reason, an attachment. Followed very quickly – but not quickly enough, needless to say – by a recall of the email.

Why? Because the attachment contained a list of 3000 contractors, their day rate, the day rate to Hays and a few other interesting details. It seems that some of these contractors are on really quite juicy rates. Oops…

OK, so perhaps that’s the rate for a senior HR manager in charge of a multi-million pound restructuring programme, but needless to say the ignorati rapidly jumped on the bandwagon, demonstrating a total lack of knowledge of several fairly key areas.. The meeja started it, shouting about excess salaries for temporary staff. A spokesman from Unite – who, let us not forget, are representing workers and so might be expected to have at least a working understanding of the labour market – started banging on about “overpaid contractors” taking work from “permanent staff”. Assorted comments in a range of newspapers picked up the baton. A shadow Treasury Minister came out with the same line. OK, so he’s a politician of course, so we shoudn’t expect too much wisdom perhaps.

The thing is, to a man they were going on about excessive salaries. Nobody can possibly be worth that much (well they can, actually, work out the cost of employment of a permie on an £80k salary plus bonus and package). And what is more, as ony fule kno these aren’t salaries, they’re payments to companies for services rendered. To convert them into salaries, you have to knock off the long list of expenses that contractors have to cover for themselves – employers NICs, holiday pay, sick pay, pensions, expenses, bench time funding, corporation tax and all the rest. And even then you probably haven’t got to a salary since you don’t know how much the contractor is taking back out of his company.

Or perhaps these deluded souls actually think that the fitter from British Gas charging you £80 an hour to fix your boiler is on £166,000 a year salary? I suppose that’s quite likely, given the state of our education system…

The really sad thing is that we have a unique and highly effective contractor workforce in this country. Its end clients – like RBS – recognise its worth and understand the economic realities that make a contractor a very good use of money. One recent client of mine paid £60k for a contractor’s services over several months, but he left them with a £430,000 saving. Which I, and they, think is actually not a bad return.

Good contractors are worth their day rate. Such a shame that people who probably understand that perfectly well prefer to distort reality in the pursuit of cheap, and very hypocritical, political point scoring.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Superman (Christopher Reeve) by MEDIODESCOCIDO

How would you feel about a business where you didn’t really understand what the product is and were selling to someone who also doesn’t understand what it is but whose understanding was different to yours? But nevertheless the overall business has an annual turnover close to £30 billion.

Because that’s the Recruitment industry these days.

I was in a meeting recently where an account manager from one of the local agencies gave a talk on how the agency interacts with the contractor and all the various add on services they provide. Made for several PowerPoint slides of things ranging from de-risking payments to providing help and guidance And very interesting it was too, until another speaker, this time a contractor, stood up and gave their view of the same relationship..

Guess what? They didn’t really match.

To be fair to the agency, they do find the business and they do factor the money and they will, if pressed, negotiate rates and the like with the end client, all of which is pretty valuable if you want a quiet life. Where it goes wrong is how they represent us to the client.

Every agency tries to tell the client that they have this pool of highly expert staff ready to fulfil any role the client wants filling. And what is more their sophisticated search facilities and in-house databases match candidates to roles with unfailing accuracy. So explain why, if that’s what they do, why is my Inbox getting three or four emails a day from agencies offering me a whole series of roles, almost without exception ones that bear little or no relationship to my actual skills or location. Could it be that what they do and what they tell people they do aren’t exactly fully aligned?

And, of course, this same doublethink has permeated the client HR departments. Because they get contractors from the “recruitment” agencies and those contractors are presented as individuals, rather than as service providers, they see us as a slightly weird form of employee. OK, we may have different email addresses to the permie staff and we might miss out on things like car parking rights and canteen access, but ultimately we are still seen as just another worker.

So why is this important? As long as we get paid, does it really matter?

Well yes it does, actually. In fact it’s getting increasingly important. The career contactor has to demonstrate more and more to HMG that we are free-standing businesses; small ones, admittedly, and ones who probably won’t ever grow too much, but still businesses with all that implies. Sadly, that argument gets cut off at the knees by the way the market treats us as a lightly modified employee with an inflated salary.

Of course, deflecting this juggernaut from its path is not going to be easy; in fact, it may not even be possible. After all, £30 billion a year is something with a lot of momentum. But that doesn’t mean we shouldn’t try. The freelancing model we have in the UK is certainly unique in Europe, and pretty much unique in the rest of the world, with only Australia and the USA coming close to the level of operational freedom we enjoy.

So it’s a real shame that the very people we have to deal with to get our skills to work are the only people who seem not to understand the value of that uniqueness. I think it’s time they found out.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

Image: HAIER kids by boni_face

Have you ever thought that contracting is about the only job where you have no idea how much you should be charging? You go for a job, you talk to the agency advertising it (assuming you can find them at their desk…) and you have a two minute chat about the work required. With a bit of luck (and some smart questions) you will know where the job is based, roughly what’s to be done and what the agency believes the key issues are (there’s always issues in my experience!).

What you don’t yet know, usually, is who the client is and quite probably not even what their line of work is. That’s because if the agent decides you’re a waste of his time, he doesn’t want you calling the client and offering your services directly, so he’s only protecting his own business.

But on the basis of this rather minimal information you will be asked how much you would charge. And that’s where it gets difficult.

Personally I have a clear idea in my head about what I would like to charge. The answer, oddly enough, is not “as much as I can” although that is certainly one of the parameters. I know what I need to live and I know my routine overheads, so I can work out how much I need to earn a year to pay the mortgage and keep the dog in biscuits. Working on the assumption I’ll probably work seven months a year (OK, that’s a bit low, but I’m getting lazy in my old age) I can set a base day rate.

To that you add the cost of getting to the job. Daily commutes are either so many miles at 40 pence per mile or the rail fares. Staying away I usually cost at £100 a day (slightly more in the Smoke, but that’s usually commutable). Either way I add that amount to the day rate; while I do an all inclusive deal for my labour, I also aim to recover all my costs.

Finally I add a fiddle factor, based on the seniority of the role (it costs more if I’m managing people, for instance) and something I call the risk factor, which reflects how hard the job is going to be and how much damage I could do if I get it wrong. Then add 15%: after all, I aim to make a profit at the end of the day.

So then I have a base price. Sadly, so does the agent, driven by what the client tells him the budget is and his own margins. If we’re really lucky the two will coincide. If we’re even luckier, the agent will be willing to beat the client up to what I want, since he gets more money that way as well. These days, though, that’s increasingly unlikely.

One problem is that the clients have a very clear idea of what they want to pay, Unless you are a serious specialist, there is very little chance you can name your own price any more. Most clients have a rate card of their own which they use to cost their own internal budgets: it’s a brave manager who will deliberately put in an overspend on his own budget. Then there are the companies who have no idea, who set the budget by dividing the permie’s salary by 260, who set the rate stupidly high – councils are good at that one – or even do a kind of Dutch auction, asking for three CVs and saying they’ll take the cheapest (oddly enough they are also the ones wondering why their delivery record on projects is so poor…).

Of course it would be good if we could delay the rate discussion until the interview stage, but that would expose the agent’s margin which would never be allowed. Or we could go in with a per diem and a percentage share of any resultant savings or client income growth depending on the role. (Someone I trained did exactly that: offered to do a job for 10% of the first year’s savings then proceeded to save his client £2.4 million…)

But at the end of the day you are having to bid for work in a fog of ignorance. This probably explains why my rate now is usually within 10% of what I was on 15 years ago when I started out.

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Image: vector scuba diving by ?ukasz Strachanowski

I know I keep banging on about ICT abuse, but I make no apologies for it. The systematic destruction of one of the few things we do well in the pursuit of short-term gain is getting well beyond a joke. Just look at what’s been reported in the last week or so.

Firstly, it seems that British business is in dire straits, utterly unable to get the skilled staff it needs to fill some key roles. Therefore, we mustn’t put any kind of cap on intra-company transfers or we will go even more bankrupt than we already are.

OK, so explain this. While most companies need a hundred or so ICTs a year to bring in their key personnel, how come just five of them consume over 10,000 a year? If these highly skilled employees are so necessary, why are the people already doing the job being tasked with teaching the newcomers how to do it? Isn’t the point of an ICT that the holder knows what they’re doing already?

Also why, may I ask, if one of the key tests for granting an ICT is that the imported worker should not displace an established worker, why are increasing numbers of established workers being displaced as soon as possible?

Or if we really can’t supply the skilled staff we need out of the thousands of out of work contractors and the 17,000 IT graduates who can’t get work, just why aren’t UK companies training the people they need from their existing workforce?

Then I read of someone whose freelance colleagues have been told they have to become employees of the agency – not, you notice, the client – at a set maximum salary. Needless to say, they have universally decided that’s not how they want to live their lives and are leaving as their contracts run out. So now they’ve been asked to stay on long enough for their replacements to get their visas processed and receive training and mentoring on how to do the job of the departing freelance.

Kafkaesque, isn’t it?

There are faint glimmers of hope. For example, the suggestion is that you have to pay an ICT at least £40,000 a year – and that’s meant to be a genuine salary, not £20,000 plus subsidised accommodation, flights, and other ethereal additions to make the numbers look good. Although that’s been offset by the threat not to include ICTs in the immigration cap. After all, they’re not going to swap the ICT for a Tier 1 after a while and stay here, are they? Oh, hang on a minute…

The Coalition have been researching and consulting very hard on this whole subject. They have been lobbied by groups such as the PCG who feel they would rather like to hang on to their market, and by others who business model seems to be based on taking that market and moving it elsewhere. I think the policy will make interesting reading. I don’t think, however, that I’m going to like it very much.

Never has that old Chinese curse seemed so totally apt…

Alan Watts can found at LinkedIn.
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Image: Say No to new Japanese Immigration Procedures! by stbeck

Another frustrating week in the hunt for the next contract. It’s clear that there is still a fair bit of work out there for the taking. Sadly it’s also clear that there are an awful lot of people out there trying to take it and competition is very strong. But it seems to have had at least one side-effect; you must only apply for a job if that’s the job you’re already doing.

You can accept that if the role is in say Finance, then clearly you do save a lot of issues taking on someone who already works in Finance, since they would know the regulatory and business environment. Actually it turns out an awful lot of openings are in Finance since the only people with the money to spend are the banks. Wonder where they got it all…

Anyway, I digress. Taking someone already in an industry vertical, while frustrating to the outsiders looking in, is quite understandable. However, the market now sees to be taking this to a whole new level which is what causes the frustration: no matter how good you are at what you do, if someone doesn’t want you to do exactly the same thing for them that you’re doing now, then you have a problem.

I’ve talked before about the whole agency candidate-finding process being reduced to a box-ticking exercise in an attempt to get the flood of applications down to manageable levels. This also saves them a lot of money themselves of course, since the bulk of the work can be delegated to fairly junior researchers who don’t actually need to understand the role or the candidates.

So getting a role is now totally dependent on what it says on the CV. And that is where it all starts to go a bit wrong.

If your CV is to stand a chance it has to be a very close match to the original requirement. Sadly, however, with the laziness of the average agent, a lot of the job specification doesn’t make it to the advert; probably takes too long to cut-and-paste it in to Broadbean or whatever they use to set the adverts up. Given a career history like mine that is pretty wide ranging, I then have to work out which bits to highlight in the first page summary on my CV – no agent bothers to read the detailed job history any more – to stand even a vague chance of getting past the first filtering process at the agency, never mind getting passed on to the client. And if the advert misses a key bit of information, then you fail at the first hurdle.

As an example, I put an application in yesterday evening and around midday today I finally got to talk to the agent about the role. Too late! It seems the role was largely about recovering a programme of work that was not delivering and needed a total shake up. “But you didn’t ask for that, and as it happens that’s what three of my last four roles were mostly all about, fixing and successfully delivering broken projects” I pointed out. One of which, incidentally, was worth around £250 million.

“Ah but”, was the reply, “You didn’t state that explicitly so I didn’t pick it up. Sorry, but I’ve already sent in all the CVs I’m allowed to”. End of conversation.

So there in a nutshell is why good people are sat on the bench. This whole market needs a different approach. And that’s something I will talk about next week.

Meanwhile, anyone need an expert is anything?

Alan Watts can found at LinkedIn.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Experts Only by Ross Mayfield