Agency Percentages

[luckyjim37]

Hmmmmm , Not sure about the VAT there old chap 😕
If you are working Local and in the UK then It’s good but if you are freelance all over the world VAT does not help at all ! 😯

Without wanting to take this to far off subject you are right but if you are working in the UK and you are set up on the right VAT scheme you in effect gain a 3% pay rise.

Also where you can charge VAT is relevent to where you are invoicing to not where you are actually working. Which brings me back to the point if you have negotiated a rate with a UK based company why bring the agency in it is much more tax effective to have the Ltd company.

[effinreps]

In the last 10 years I have never failed to do enough days to claim SED. I pay the agency a bit more than 3600 pa but it’s f**k all compared to the 20+k tax rebate I get every year.

No brainer in my book!!!!

[Scott Beveridge]

Back on the subject again….

435 GBP is a bit low Effin’, 450 is closer to the mark.

[effinreps]

Who’s on 435 or even 450 for that matter? I was getting 435 a good while ago as sub eng but that was a short term job. I’m on considerably more than 450 ATM but the job ends soon so it will be back to crap rates again. Hopefully if the predictions are right for q3/q4 then it will be time to name your price again, and we can screw the companies like they have been screwing us over the last 18-24 months.

[luckyjim37]

In the last 10 years I have never failed to do enough days to claim SED. I pay the agency a bit more than 3600 pa but it’s f**k all compared to the 20+k tax rebate I get every year.

No brainer in my book!!!!

Well done you. Personally I have work to live so very rarely do over 180 days a year when contracting. So I have found the most tax efficient method of working for my circumstances.

It would appear though that you are being very defensive with regard to this. I would also question your day rate figures. Last time I contracted around a year ago and from seeing what guys get through the agencies I have been hiring through I would suggest that you have been lucky in your day rates. Around two years ago 430-450 was the going north sea rate for an agency supervisor. I take them figures from a guy I know who was on 450 a day and against the rates I was working for both through an agency and contracting direct to a company. Those rates are with me doing my own taxes.
Looking at what I know a couple of the agencies charge and pay in current times I would say that you are still quoting very high figures.

Good rates are fine if you can get them but the vast majority of agency guys either do not have the time or the inclination to chase for every last pound they can get. Most guys seem to have an upper and lower bracket they will work for and go with that. There are times when the work is lean and you are forced to take what you can get. This situation is pressed home more for guys with families than the single guy who can possibly wait out for the rates to improve.
The other side is mid season when the rates seem to jump up and everyone is happy although personally if I was ever offered something where the rate seemed too good to be true there was normally a catch.

The quicker IROVA takes off and gets some pay standardization going the better; it is starting to get a bit boring reading the same old rhetoric about how rates were fantastic two years ago but poor now and how on one job the rate was this and it was wonderful but it has never been offered again. Poor me only earning twice what a policeman earns this year and having twice as much time off.

It is about time some people on here got over themselves and realized that there are a huge number of people out of work at the moment and they are lucky to be working and have an income. Times are not great at the moment so make the best of it.

Now that I have got that off my chest it is time for tea.

[Scott Beveridge]

Jim,

By all rights and sensibilities, there should be some consideration to the years in service dictating pay rates. Agencies / clients please note. Is it not done on most inshore jobs? When I said 450 GBP (which would be too low for some of us), that really SHOULD be the rate for SOME folks. I’m satisfied with what I receive (quite a bit more thank you).

[effinreps]

Companies tend to pay more for quality personnel they know, with a proven track record. If your on a low day rate then it’s cos you’ve not worked for that company before or………….

[James McLauchlan]

I note there was some discussion on VAT earlier in this thread.

It was a little off topic so there is now a thread on VAT for UK Ltd companies in the financial section.

Please use that to discuss VAT and how it may apply to your limited company.

[luckyjim37]

Good to see that a few guys do get more. However looking at this with my management hat on I have a budget and that dictates what I pay people. Incidently 450 GBP a day is my absolute top line for a supervisor regardless of years experience.
There are a lot of good guys around who have a lot of experience and a lot of older guys who have not moved with the times hence they would be handy to have on a Scorpio (or any other old vehicle) however if you put them on a Quantum they potentially could struggle as technology has moved on. Again that does not apply to everyone but is a consideration. I know plenty of people on the shore side of things who get time served bonus’, additional leave, better pension scale. None of that equates to how good they are at the job. If you a contract supervisor day one of the contract is the same for you as anyone else the same as if you join a new company you may have been with your last employer for twenty years but that does not entitle you to benefits with your new employer.
Yes experience should be recognised but if companies have to pay through the nose for it they will just take additional inexperienced staff as you end up pricing yourself out of the market.

[Scott Beveridge]

Good to see that a few guys do get more. However looking at this with my management hat on I have a budget and that dictates what I pay people. Incidently 450 GBP a day is my absolute top line for a supervisor regardless of years experience.
There are a lot of good guys around who have a lot of experience and a lot of older guys who have not moved with the times hence they would be handy to have on a Scorpio (or any other old vehicle) however if you put them on a Quantum they potentially could struggle as technology has moved on. Again that does not apply to everyone but is a consideration. I know plenty of people on the shore side of things who get time served bonus’, additional leave, better pension scale. None of that equates to how good they are at the job. If you a contract supervisor day one of the contract is the same for you as anyone else the same as if you join a new company you may have been with your last employer for twenty years but that does not entitle you to benefits with your new employer.
Yes experience should be recognised but if companies have to pay through the nose for it they will just take additional inexperienced staff as you end up pricing yourself out of the market.

Jim,

Wouldn’t it be interesting to obtain info or statistics concerning "How many systems go back to the yard with EMPTY TMS’s in recent times"??? There goes your budget!!! There are a good number of "old hands" that take on the job load and task list for the young guys. The young guys are often told to go get a cuppa tea whilst the supv (in this case, old hand) does their work. Yes guys, there is exactly the opposite scenarios… But any old hand supv worth his name does the former. You guys wearing the "management hats" should really put your foot down. Firstly to some of the inexperienced and / or gutless marketing personnel…. Then maybe you can get a better budget. Mini rant complete – for now.

[Craig Thorngren]

I think we’ve gotten a little off the original topic… so to try and bring it back on course let me surmise some of the PM’s and emails I’ve received on this topic…

Observation #1- ROV personnel think that agencies in general are just trying to make money off of their work but see them as a necessary evil.

Observation #2- Agencies (I’ve had either PM’s or emails from 5 different agencies. I should clarify that I had two other that said they were, but I could not verify and believe they were some sort of BS artist…) work for the client (i.e. the person who is hiring them to find workers) and as such most terms are dictated to them.

Observation #3- There are way more people looking for work than there are jobs (I get probably a dozen CV’s a week and I’m not even advertising for personnel…).

Percentage’s seem to range from 11.5% to almost 45%. What i really found inteesting was that when i asked someone what they thought was a fair wage, and they said "XX amount" then i said so if someone paid you that much of a daily rate, does it really mater what percentage they are making? Some folks were OK with someone making money (any percent if they were gettingwhat they felt was fair) while others were upset because if someone was making as much or more more money then them, they felt they were entitled to more money not because they were doing more, but because they just wanted more.

Personally, i believe that if you want more money, than you have to not only work harder, but you have to show your worth it..

Chief

[effinreps]

Personally, i believe that if you want more money, than you have to not only work harder, but you have to show your worth it.

So what ‘hard work’ does an agency do that entitles them to cream off 30-45%?

[Craig Thorngren]

So what ‘hard work’ does an agency do that entitles them to cream off 30-45%?

It’s not only hard work, but risk that justifies the higher percentage. Let’s use my company as an example shall we.

As an example, lets say a company hires us to go to Costa Rica to recover something off the ocean. I’m going to charge them $2259 USD per day plus expenses. So I send two people to do the job. The person in charge will get $800 a day, and the assistant will get $700 a day out of that $2259 (both are pretty equally qualified). That puts $759 into the company coffers (or roughly 33%). Why should i get to "cream" 30% or more off the top? Quite simply because I’m the one who has the most at risk, from gear to reputation. Unless we’ve made some sort of pre-arrangement, if we don’t succeed, we don’t get paid. If the gear gets lost or damaged, who is going to pay for it? Moi…

Trust me, when you put $100K worth of gear into the water, you want to make sure you are getting something back for the financial risk your taking.

Chief

[effinreps]

Chief,

The clue was in the post, the word AGENCY should have given it away. If you/your company are putting equipment in the water then you are an operator and you sub contract or employ personnel. You are not an agency!!

An operator has totally different costs and expenses to a body shop (Agency)
If your mark up is only 30% as an operator that is way too low!!

[Ray Shields]

OK, one "risk" the Agency takes is not getting paid by the Client, even though they have to pay the Agency worker. They also pay the Agency worker each month, even though they have to wait a few months to get paid from their Client.

They also handle paperwork, book and pay for travel, etc. I think it all comes down to what is "reasonable" or more likely what people think is reasonable. e.g. 10% cut is more reasonable than 45% cut in my opinion 🙂

[Author]

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