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Old 16.01.2020, 21:12
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IT Contractors - why an agency has to be involved? Let's find projects directly

I got my IT contracting jobs always through agencies. Is anyone on the forum who can answer my questions please?

1) Why the contract jobs are not advertised by the clients themselves at all, as in case of permanent jobs? Why any agency has to be involved, who basically does nothing but advertise on job sites, gets a payrolling company for 3% and takes approx 15-20% provision for doing all of this. I tend to assume that in many cases bribe is involved....
I still do not get, if a client needs a professional, why can't he put an ad (and even write they do not accept unsolicited applications from agencies - as many times that is what I read for permanent positions)

2) What is the added value of the agencies for the client? The only thing which comes to my mind is the pre-filtering and searching for the candidate... But if the projects would have been advertised by the clients directly, we (the contractors) could find them easily anyway, when we are available. Why do we have to feed the middle man?!

3) How could we (contractors) skip the agencies and get those projects directly with the client? How the agencies acquire the projects, does anyone know? I do not think that they operate only with marketing cold calls or doing some dirty business... or do they? If yes, then we, contractors are always just a tools only in their dirty game?

Maybe someone more experienced can shed some light on the details.
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Old 17.01.2020, 00:01
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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I got my IT contracting jobs always through agencies. Is anyone on the forum who can answer my questions please?

1) Why the contract jobs are not advertised by the clients themselves at all, as in case of permanent jobs? Why any agency has to be involved, who basically does nothing but advertise on job sites, gets a payrolling company for 3% and takes approx 15-20% provision for doing all of this. I tend to assume that in many cases bribe is involved....
I still do not get, if a client needs a professional, why can't he put an ad (and even write they do not accept unsolicited applications from agencies - as many times that is what I read for permanent positions)

2) What is the added value of the agencies for the client? The only thing which comes to my mind is the pre-filtering and searching for the candidate... But if the projects would have been advertised by the clients directly, we (the contractors) could find them easily anyway, when we are available. Why do we have to feed the middle man?!

3) How could we (contractors) skip the agencies and get those projects directly with the client? How the agencies acquire the projects, does anyone know? I do not think that they operate only with marketing cold calls or doing some dirty business... or do they? If yes, then we, contractors are always just a tools only in their dirty game?

Maybe someone more experienced can shed some light on the details.
When you demonstrate such a lack of knowledge on a topic it is best not to start accusing people of bribery etc...

There was a time when the big banks and chemical companies did deal with contractors directly and I had supplier agreements with several of them. But the reality is that it is cheaper for them in the long run to work with agents. The agency provides them with legal protection in social security law, deals with work permits and about all else deals with the whining nonsense from contractors, particularly foreign contractors in addition to the services you know about including initial recruitment filtering or payroll.

If you want to deal directly with the clients then you’ll need to provide the same service to the clients as the agents do and that is expensive. So much so that many of the foreign agents piggy back of the Swiss agents rather than set up their own shop.
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Old 17.01.2020, 10:52
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

Accusing is not the same as assuming I tend to assume, but at the end I want to beleive that is not the case

I have work permit, no need any assistance from the agency, live in Switzerland since 11 years. I can go to a payroll company directly as well so legal requirements are covered as well. So I could be even cheaper because we could half the provision (let's say 20%) of the agency, so it is win-win for the client and for me as well.

And question remains: why the clients do not advertise such projects directly? Why a middle man is needed who does nothing, but the advertisement for such high profit?
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Old 17.01.2020, 10:58
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

Basically clients don't want to be bothered with contractors who may or may not be reliable.


By working via an agency, the agency holds the baby and finds repalcement babies if necessary to avoid shit with the client.


You as an individual are an unknown entitiy, an agency has a relation built up with the client and can be somewhat trusted.


This has cost money and it is why the agency take a commission from your daily rates.


Clear ?
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Old 17.01.2020, 12:00
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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Accusing is not the same as assuming I tend to assume, but at the end I want to beleive that is not the case

I have work permit, no need any assistance from the agency, live in Switzerland since 11 years. I can go to a payroll company directly as well so legal requirements are covered as well. So I could be even cheaper because we could half the provision (let's say 20%) of the agency, so it is win-win for the client and for me as well.

And question remains: why the clients do not advertise such projects directly? Why a middle man is needed who does nothing, but the advertisement for such high profit?
I assume you're not familiar with risk management.

If a big company hire people through an agency to avoid any liability. Direct hiring may save 20%, but the day something goes wrong with work permits or social security, they might be liable for larger amounts and long legal discussions. The liability is worth for permanent employees, but that's not your case.

An agency also means reliability. As Today only mentioned, if they hire you directly and for whatever reason you cannot deliver the project is in troubles. The agency just needs to find a suitable and the project keeps running to avoid delays, penalties or operational loses.
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Old 17.01.2020, 13:42
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

Why the contract jobs are not advertised by the clients themselves at all, as in case of permanent jobs?
Not even permanent jobs are advertised by clients themselves. Clients are effectively outsourcing the filtering of applications to the agency. This way they only deal with people who are (in theory!) suitable for the work.

Why any agency has to be involved, who basically does nothing...
The agencies do not do nothing. They build up a list of clients to work with, and a list of contractors, and attempt to match them. To get the list of clients takes quite a lot of work, including cold calling, networking etc.. And even when you've got them, trying to find a contractor who's suitable for a role and available requires considerable legwork.

Bribery
No. Corruption is not unknown in Switzerland, but it is perceived as the 3rd least corrupt country in the world. Hungary, just to pull a country at random is 64th.

Added value for the client
Not having to deal with a million applicants from all over the world, handling payroll, holding the contractor at a distance so not so easily deemed to be an employee, being a single supplier instead of one for each contractor, separates negotiations regarding pay rates, no work permit hassles etc. etc.

Added value for the contractor
Get paid on time and not having to chase the client up. I've worked on contracts here where where I got paid immediately after submitting my timesheet. I've contracted directly and had to chase up several times - never when via an agency.

Agencies are sales people. I use them to outsource the work involved in finding work. It takes considerable time and effort. I'm not a salesman. I'm no good at it. The only times I've contracted directly is through word of mouth recommendations. If you think it's easy finding clients, why not employ a salesperson yourself?

Bottom line - clients,especially big ones, prefer working through agencies because it is more efficient. For us contractors, it's an evil, but a necessary evil. If you think it's money for old rope, why not become one?
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Old 17.01.2020, 14:06
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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Accusing is not the same as assuming I tend to assume, but at the end I want to beleive that is not the case
Yawn

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I have work permit, no need any assistance from the agency, live in Switzerland since 11 years. I can go to a payroll company directly as well so legal requirements are covered as well. So I could be even cheaper because we could half the provision (let's say 20%) of the agency, so it is win-win for the client and for me as well.
Well obviously not a single client agrees with you.


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And question remains: why the clients do not advertise such projects directly? Why a middle man is needed who does nothing, but the advertisement for such high profit?
If you don't like the answers your getting that is your problem. Why not go around a cold call some of them and have them explain to you why they don't want to do business with you.
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Old 17.01.2020, 14:11
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

Big multinational companies do not contract with some random entities.

They have procurement policies in place, they have preferred vendors (who are screened, known, trusted, etc.), hence their resource needs are fulfilled via those vendors (agencies), too.
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Old 17.01.2020, 14:16
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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Why the contract jobs are not advertised by the clients themselves at all, as in case of permanent jobs?
Not even permanent jobs are advertised by clients themselves. Clients are effectively outsourcing the filtering of applications to the agency. This way they only deal with people who are (in theory!) suitable for the work.

Why any agency has to be involved, who basically does nothing...
The agencies do not do nothing. They build up a list of clients to work with, and a list of contractors, and attempt to match them. To get the list of clients takes quite a lot of work, including cold calling, networking etc.. And even when you've got them, trying to find a contractor who's suitable for a role and available requires considerable legwork.

Bribery
No. Corruption is not unknown in Switzerland, but it is perceived as the 3rd least corrupt country in the world. Hungary, just to pull a country at random is 64th.

Added value for the client
Not having to deal with a million applicants from all over the world, handling payroll, holding the contractor at a distance so not so easily deemed to be an employee, being a single supplier instead of one for each contractor, separates negotiations regarding pay rates, no work permit hassles etc. etc.

Added value for the contractor
Get paid on time and not having to chase the client up. I've worked on contracts here where where I got paid immediately after submitting my timesheet. I've contracted directly and had to chase up several times - never when via an agency.

Agencies are sales people. I use them to outsource the work involved in finding work. It takes considerable time and effort. I'm not a salesman. I'm no good at it. The only times I've contracted directly is through word of mouth recommendations. If you think it's easy finding clients, why not employ a salesperson yourself?

Bottom line - clients,especially big ones, prefer working through agencies because it is more efficient. For us contractors, it's an evil, but a necessary evil. If you think it's money for old rope, why not become one?
Good points.

The agency does much more than advertise a job. Going through all the applications is very time consuming (and most of the applicants are not suitable anyway), so is chasing the money when clients don't pay and all of the points mentioned above. Not mentioning the reference checks which companies also expect.

By using an agency, a company also protects its reputation. The agency gets all the blame whatever happens.

You don't get paid on time? It's the agency (when actually it's the client who doesn't pay on time).

You don't know if you will get the contract or not because the end client is still figuring out whether they want to hire you or not? You will blame the agency, who doesn't get back to you but is actually still waiting for feedback from their client.

You get laid off because the company thinks you actually can't do the job or you lied about your skills? The agency has to call you to give you bad news and deal with all the paperwork involved.
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Old 17.01.2020, 14:19
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

I have a friend who does just that. He is a one-man-GmbH. He finds his costumers for big and small projects - would you? Go on and do it. And report back.
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Old 17.01.2020, 14:21
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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Added value for the client
Not having to deal with a million applicants from all over the world, handling payroll, holding the contractor at a distance so not so easily deemed to be an employee, being a single supplier instead of one for each contractor, separates negotiations regarding pay rates, no work permit hassles etc. etc.
Dealing with a lot of the nonsense that some contractors whin about is also part of the package. I considered setting up an agency before retirement and after spending a week working for one of the well known agencies I decided it was not for me. Out of five contractors, about two are fine and you don't hear from them but once a month when the submit time sheets, the other three are on the phone every other day - they don't like the apartment they rented, can you fix it... can you go with them to garage to sort out their repairs for them... they don't like the colour of the walls at the office, can you ask the client to repaint them..... one moan after another... then there the ones that just walk of the job (usually on Monday after going home for the weekend), women that try to make the client pay maternity leave, others who suddenly decide to try and claim disability and on and on...
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Old 17.01.2020, 14:26
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

TO get out of this, you should start offering a service as a company instead of being an (outsourced) headcount. Of course, you would also need to take over the client acquisition part of the agency.
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Old 17.01.2020, 20:34
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

Thank you, (especially NotAllThere and aew), you wrote some valid points.

I should have written the topic title as "how to find contracts directly", not discussing only the role of agencies.

I would be interested about such "one-man-GmbH", how do they find their projects...
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Old 18.01.2020, 09:41
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

The direct projects I've had have been from others recommending me. I'm no good at selling, so I've never searched for direct contracts.
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Old 18.01.2020, 11:17
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

Maybe not directly relevant, but I have ambiguity about what you guys mean by agency here. Is that a consulting firm like KPMG or Accenture, or a recruitment agency like Oxygen,..

If later, I thought recruiters only are involved until the contract is signed and then it's you and your employer :-/
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Old 18.01.2020, 12:11
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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Maybe not directly relevant, but I have ambiguity about what you guys mean by agency here. Is that a consulting firm like KPMG or Accenture, or a recruitment agency like Oxygen,..

If later, I thought recruiters only are involved until the contract is signed and then it's you and your employer :-/
KPMG, Accentures and their peers do projects. They need resources to staff their projects. They have their own pool of contractors but also use agencies to find contractors.

Agencies are also used by clients to fill resources. Can be on a contracting base (they get a percentage of the day rate) but also to provide candidates that flow in the regular recruiting process (get a fee if the candidate is hired).
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Old 18.01.2020, 12:35
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

I have meant only the recruiting agencies. I speak german, no need help in housing, have C Bewilligung... If I had the client, I could go to a payrolling company so all the legal aspects are covered for a 3% as I wrote above.

The only service of an agent in my case is the job search and I am ready to honor this service with their commission fee because I can imagine how hard it could be.

Many of you were thinking of the big clients only. I understand that they have their procurement procedure - but my target are the smaller businesses (KMU). Btw, I wonder how much does it make sense for a recruitment agency getting a project opening from a big firm, along with other 10 agencies at the same time. It used to happen that 5 out of these 10 agencies start to phone me on the same day giving me a pleasant negotiation situation to choose the one with the lowest commission fee. At the end 10 agencies provide their 2-3 applicants each, resulting that 20-30 candidate profiles land at the line manager's inbox, and he has to read the cvs, setup interview (some overhead by coordinating with the agencies)..so I the agency can't save too much. And the success rate could be low for the agencies as well.

But I would like to give it a try and find the clients directly. But first I would like to understand (again, these questions applies only for smaller clients):

1) why all contracting jobs are through only agencies
2) why the agencies have to search for such projects and I do not see ANY contract jobs advertised by the smaller clients. If I was a such client and needed an external employee for a specific task, I would rather give it a try so search them instead of going to a software firm how bills min 50% more (or an agency, who bills at least 20% more...)
3) how the agencies get the projects, how do they operate.
+1) which agency do you know about to focus on KMUs for IT projects?

I look forward to read some answers for these 3 questions.
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Old 18.01.2020, 13:36
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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Old 18.01.2020, 14:44
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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I have meant only the recruiting agencies. I speak german, no need help in housing, have C Bewilligung... If I had the client, I could go to a payrolling company so all the legal aspects are covered for a 3% as I wrote above.

The only service of an agent in my case is the job search and I am ready to honor this service with their commission fee because I can imagine how hard it could be.

Many of you were thinking of the big clients only. I understand that they have their procurement procedure - but my target are the smaller businesses (KMU). Btw, I wonder how much does it make sense for a recruitment agency getting a project opening from a big firm, along with other 10 agencies at the same time. It used to happen that 5 out of these 10 agencies start to phone me on the same day giving me a pleasant negotiation situation to choose the one with the lowest commission fee. At the end 10 agencies provide their 2-3 applicants each, resulting that 20-30 candidate profiles land at the line manager's inbox, and he has to read the cvs, setup interview (some overhead by coordinating with the agencies)..so I the agency can't save too much. And the success rate could be low for the agencies as well.

But I would like to give it a try and find the clients directly. But first I would like to understand (again, these questions applies only for smaller clients):

1) why all contracting jobs are through only agencies
2) why the agencies have to search for such projects and I do not see ANY contract jobs advertised by the smaller clients. If I was a such client and needed an external employee for a specific task, I would rather give it a try so search them instead of going to a software firm how bills min 50% more (or an agency, who bills at least 20% more...)
3) how the agencies get the projects, how do they operate.
+1) which agency do you know about to focus on KMUs for IT projects?

I look forward to read some answers for these 3 questions.
1) Because finding people to do the work for your company is a REAL JOB. It's difficult and challenging. It's time consuming (find reliable, skilled people then check references then do all the paperwork as mentioned above) and expensive (advertising on platforms such as jobs.ch for example is very expensive) - tools which are used to find contractors in general are expensive and how can freelancers know you're hiring if you have no visibility?

I think what you don't get is that agencies use expensive tools and resources to fill jobs. People spend thousand of hours to find the right contractors. And even when you find the right people, the job is not over. Today Only is right, people who move to CH call you because they need to know about work permits, apartments, insurances etc. Then they call you because they don't like their work and want to change or they have problems in their relationships and are thinking about quitting or suddenly they want to resign because they got a new opportunity or want a massive pay raise or whatever. Agencies deal with all of this and you don't see it.

When you go to the hairdresser they have expensive scissors/tools and knowledge about hair you don't have.

Now sure you can buy or rent these expensive scissors and shampoos and get a hairdresser training or learn on youtube how to cut your own hair. But how often do you need a haircut? Maybe 3-4 times a year? Is it worth the hassle?

If we follow your reasoning, why hire a plumber, why hire a web developer, everything can be learned on Youtube or online now so what's the point?

2) Finding people is expensive, see 1). If they have a few people inhouse who are only dedicated to find and manage contractors, working 100% the whole year round, it will be more expensive for them than appoint an agency whenever they need people. It's a service companies pay for.

Same when they hire a cleaning company for their small business. Why not hire a cleaner 100% instead of going through a cleaning company? Because it wouldn't make sense to have the cleaner work for 2-3 hours / day and then do nothing 70% of the time.

Agencies works for a lot of clients because working for one client wouldn't be sustainable.

But if we follow what you're saying maybe we should ask the secretary to do the cleaning, this way no need to hire a cleaning company at all.

If looking and finding contractors would need a 20 or 30% resource all the time or a 100% resource 4 months a year then you clearly see why companies hire agencies instead of looking themselves.

No one would accept a 30% contract or a 100% contract for 3 months (maybe one month in November, then February and June or whatever). It wouldn't make sense.

FYI some people are also freelancing in the recruitment sector and working for SMEs. So freelancing can be done is every sector but hey you still need the knowledge, network and (expensive) tools.

3) Networking, online research, cold calling, speaking to lots of candidates/freelancers... and lots of leads usually lead nowhere.

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Old 18.01.2020, 17:52
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Re: IT Contractors - why an agency has to be involved? Let's find projects directly

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1) why all contracting jobs are through only agencies
2) why the agencies have to search for such projects and I do not see ANY contract jobs advertised by the smaller clients. If I was a such client and needed an external employee for a specific task, I would rather give it a try so search them instead of going to a software firm how bills min 50% more (or an agency, who bills at least 20% more...)
3) how the agencies get the projects, how do they operate.
+1) which agency do you know about to focus on KMUs for IT projects?

I look forward to read some answers for these 3 questions.
Obviously the agents provide you with a valuable service, since you clearly have not got the foggiest idea how to go about it on your own, even after you have received some good explanations.

Why would you even think that smaller companies have a needed to hire contractors to write custom software for them in the first place? Most smaller companies cannot afford to run in house software projects, so they use standard packages, excel, access and specific packages written by the small Swiss software houses that target their market and if there is custom work to be done it is to those Swiss companies they go to get it done not some random foreigner, who might not be around next time they need help.

Outside of the agency work most other needs are met by Swiss software companies. They usually employ 5 to 20 people, sell some kind of product or tool targeting a particular sector and doing custom development as well. Go to any national industry show and you’ll find dozens of such firms advertising their services.
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