Why do Contractors want to work direct with clients?

Why do Contractors want to work direct with clients?

Whilst there are many individual reasons that Contractors might give in answer to this question, at Contract Spy we have found that the answers fit into one of four main categories.

1)      Contractors have had a bad experience at the hands of an agency

2)      Contractors don’t trust agencies to represent their best interests

3)      Contractors want to work for their own clients, not an agency’s clients

4)      Contractors feel that the agency margin takes too much out of the pot

Let’s have a look at these categories in a bit more detail!

There could be many reasons that contractors have had a bad experience relating to agencies in the past. Perhaps the most critical in terms of confidence, are issues around payment for services. Being paid on time, or perhaps not at all when an agency runs into financial difficulties, can leave a lasting legacy of mistrust in the agency system. Recently, issues around correct application of holiday pay and the confusion around advertised rates offered though umbrellas have added to the general discontent.

Other issues being reported to us by contractors include being mis-represented by agents, where skills have been misunderstood, roles mis-represented or inflated, and CVs embellished or changed without reference to the contractor. Contractors have also complained that they have been pumped for information not relating to their current application, such as being asked for recent interview details with other clients, or asked to provide references at clients prior to accepting a role.

Do you have an agency horror story? Send us your story and we will collate the information and publish it anonymously as a warning to less experienced contractors.

Some contractors believe that recruitment agents are often not negotiating with clients in their best interest, but in the interest of the agency. They feel that they can negotiate a better rate without the agency middleman marking up their rate, or would find it easier to negotiate flexible working arrangements by talking direct to the client. More experienced contractors often want to improve their IR35 standing by using their own Terms & Conditions with the client, which they can only do by going direct.

Increasingly, many contractors want to work for their own clients, rather than the agency’s clients. Perhaps they just want to feel secure that they can approach the client direct in the future for follow on work, without putting the client in a tricky legal position, or perhaps they want to move from being a one-person contractor into a small consulting business, and are looking to build a portfolio of client companies which can help them grow their consulting ambitions.

Finally, the thorny question of daily rates and the effect of the agency “take”.  Typically, a client will engage with an agency on the basis that “x is my maximum daily rate”; the agency will then deduct their margin from this, leaving the balance as the daily rate available to potential contractors.  Many contractors feel that this margin is too high, especially in relation to the perceived service offered by the agency, and make the move to direct contracting in order to bypass the agency margin completely.

At Contract Spy we’d love to learn more about your own reasons for wanting to work direct. Perhaps you have had a bad experience at the hands of an agency, or have managed to build up your own portfolio of direct client contacts. Or maybe there is something that’s stopping you from going direct – just let us know your views by responding direct to this email – we promise to read all the responses and curate them for a follow up newsletter!

Look forward to sharing your experiences!


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