Tag Archive | "agency regulations"

Time to change the world of recruitment methinks


You have to laugh, you know. I never cease to be amazed at the number of posts I see about contractors claiming all sorts of problems with, variously, notice periods (don’t need them, as I’ve said before), IR35-safe contracts (fine as long as they represent reality), the AWR (don’t start me on that one again) and the infamous opt out from the Agency Regulations (opt out if you can but it makes little real difference). Plus, of course, the running complaint about the agency’s percentage of the contractor’s rate: except, of course, as ony fule kno they don’t get the percentage, the contractor does.

However there is a common theme to these various complaints. The agency.

We have to be fair to the poor agents themselves though. Increasingly they are run by accountants targeting sales figures and maximising margin. Little details like serving both sides in the contract have zero relevance to their business model. The individual agents are given achievement targets and so have no time for the niceties if they want to pay the mortgage. And of course it is much more cost effective to employ minimally experienced drones to handle the phones and use software to do the pattern matching between CV and job description.

All of which is fine if you’re dealing with a commodity market like general development, operations and service management roles. But it’s a serious problem for all sides if you are a little more senior, or have niche skills in some area or another. Or even if, like many, you aren’t a specialist in any given field, just a good, solid all-rounder who can make a success of any contract they’re given.

In effect you start from scratch every time you need a new contract. No matter how good you are, you still have to get through the auto-pilot box-ticking recruitment business we have these days. The one that says the agent gets a new role then stands there waving a piece of paper in the air to see who might be interested: usually several hundred, often hopelessly under qualified people on average. The signal to noise ratio in recruitment is actually appalling. How much cleaner if he had the resource to hand when the role comes in.

So how do we change the paradigm (see, I can do business speak as well…). The answer is surprisingly obvious.

The contractor pays the agent, not the client. Shock, horror…

Seriously, it would work. I have many skills but selling isn’t one of them, nor is cold-calling to find work (actually that’s just cowardice, but the result is the same). So why not outsource that part of the business to someone who does it for a living? The agent goes to the client with a zero margin deal. The contract would have to be B2B and, legally, you would have to be opted out of the Agency Regulations, both of which would appear to be good ideas. You know, solid in business indicators, no IR35, no AWR, no secret upper contracts…

There would be no hint of you being anyone’s employee either, since you’re at the top of the contract, not the bottom.

The agent would have to know who you are, what you can do, what you are worth and what your history is. He would be able to sell you actively and be incentivised to find you repeat business, since that’s where his margin comes from. He could specialise in given areas and build up a stable of people with the relevant skills, or he could be the one to fill the awkward jobs from his knowledge of his customers.

Best of all, you set the gross and the agent gets the percentage.

So what’s not to like? If you’re big enough and strong enough to build and justify a working reputation, and be able to be sold into an open market, why not go for it? I’d happily pay for that level of access and support, which has to be better than fighting your way to the top of some disinterested minion’s in tray to get noticed.

All we want is a couple of good agencies with the courage to bite the bullet and disregard the way they’ve always done it.

Ah. That might be a problem. Anyone know any brave, risk-taking agency FDs…?

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

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

Image: SmiAl – Sad by Al aka pintofeggs

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Bring on Utopia


I finished last week by saying that we really need to start to think about how the contractor recruitment market needs to change if we are to get away from the commoditised, one-size-fits-all, dystopian model we are currently stuck with. That model works quite well for the recruiters but it’s not helping a lot of contractors and perhaps also isn’t really helping the end clients. Time for Utopia perhaps?

First though we have to accept that the contractor market – or at least the IT/Telecoms market where I work – is increasingly split into two discrete areas. One grouping – probably the largest by far – contains all the bulk, generalised but still important skills. The other grouping is rather more varied, and contains people who have either specialised or senior skills (or both!).

For the former group the current market does actually work. Well, it does if you ignore the increasing pressure to offshore such roles. The only real problem is the old one of persuading the agents that these skills are actually transferable across industry verticals, but let’s not get too optimistic. Generally speaking these guys don’t have that much of a problem assuming there’s work for them to do.

However the other group present a different challenge, the one I was talking about last week. Too often these are the guys who get stuck because the agents don’t know who they are and what they can do. The ones where keyword matching has little effect and who have to pray the agent has enough wit to read and understand their CV.

So how do we persuade the agents that these guys need a different approach and need to be sold proactively rather than hit and hope?

How about they pay the agent rather than the client? Just like actors do already? “Ah hah!” I hear you cry, “You can’t charge work seekers for finding them work”. Well no, you can’t, that’s enshrined in the Agency Regulations. But what if the Agency Regulations don’t apply? Say, for example, by the worker (and their company) opting out of the provisions of the Agency Regulations altogether? Then the agent stops being a work-finder and becomes an outsourced marketing operation

So how does that help?

For one thing, the better the agent knows the contractor, the more likely he is to be able to sell them when an opening appears. When filing a new role, rather than waiting for the right CV to appear through Jobserve – along with two hundred useless ones – he will have a stable of good people and will be able to suggest one (or two) to the client right away. Also he can go to the client with a zero margin offer. Also he has to look after his contractors for a reasonable cut of the gross and keep them fed with work or they’ll simply go elsewhere. The more high-value contractors you have in work, the more money you make – but without the tedious rework and box-ticking that goes on at the moment. You might even specialise in a given discipline so clients look to you first when they need someone special.

Of course there are agents out there who work that way at the moment (albeit charging the client rather than the contractor) but they are rare beasts. The increasing use of sites like LinkedIn to bypass the agency by a lot of senior contractors says to me that the agency model as is does not offer them the right support and marketing. This kind of change is desperately needed.

Snag is, the average agency is too risk averse to try it. Utopia may have to wait a while. Heigh ho…

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

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