A contractor finds out from somebody at the client what the day rate actually is. It is meaningfully more than he is paid, nobody ever explained the gap, and he now believes he has been exploited for eight months.
The margin may be entirely reasonable. The secrecy is what made it feel otherwise.
A worked example
One assignment, explained the way a contractor can follow.
Line 1: the charge rate
What the client pays per day. The figure the contractor eventually discovers and the one that causes the problem when it appears unexpectedly.
Line 2: what comes out of it
Employment costs where applicable, insurance, payroll processing, invoicing and the cost of carrying payment terms. Real costs contractors rarely consider.
Line 3: the payment terms gap
That the agency frequently pays the contractor before the client pays the agency, which is financing with a genuine cost attached.
Line 4: the agency margin
What remains, stated. It is usually far less than a contractor assumes once the other lines are visible.
Line 5: the pay rate
What reaches the contractor, and whether it is inside or outside any employment arrangement, which changes the comparison entirely.
Line 6: the honest comparison
What the same contractor would net going direct, including the invoicing, chasing, cover and gaps between assignments they would then manage themselves.
Explain the rate at the outset
Before an assignment starts, in writing. A contractor who agreed knowingly does not feel deceived eight months later.
Explain whether the margin is fixed
Or a percentage, and whether it changes if the rate is renegotiated. Contractors want to know whether a rate rise reaches them.
Explain the extension position
What happens to the rate on extension, and whether the margin reduces over a long assignment. Many agencies do reduce it and never mention it.
Explain the direct engagement question
What happens if the client wants to engage them directly, which is the same territory as any transfer arrangement and should be stated plainly.
Explain what the agency does for the money
Finding the assignment, the relationship, the contract, the payment and the next assignment. Listed rather than assumed, it is a reasonable case.
Publish the payment schedule
When timesheets are due, when payment is made and what happens if a client is late. It is what contractors care about most day to day.
Be honest about the market
Where a rate is below market, saying so rather than hoping they do not find out. Contractors talk to each other constantly and discovery is certain.
Explain what happens between assignments
Contractors worry about the gap far more than the margin, and an agency that keeps somebody working is worth a great deal. Saying plainly how far ahead you start looking, whether you contact people before an assignment ends and what your pipeline looks like is what keeps a good contractor loyal.
Answer rate questions at any hour
Because contractors compare in the evening between assignments, which is the out of hours reality in travel operators and the midnight booking question, alongside candidate questions recruiters answer every day, exclusivity and multiple agency questions and the rate structure ground in minimum charge and half day rate questions.
Getting started
Publish your rate structure and what sits between charge and pay, explain it before every assignment and answer at any hour. SpideyChat for recruitment agencies answers from your published pages, plans are on the pricing page, and the chatbot ROI calculator works through the numbers.