I would like to write about something I overheard this week.
A couple of contractors were talking about recruitment agencies. I was taken aback by the disregard and disrespect that they were showing towards recruitment agencies. In most cases contractors, particularly people new to the field, find it difficult to sell themselves to potential clients. It made me think, “That’s why they need the professional selling skills of recruiters”. Recruiters are in effect, commission-based salespeople for the contractors they serve.
Recruiters, as those in the industry can testify, invest hugely in lead generation and building the professional sales skills of the recruitment consultants who place contractors with their clients.
Many contractors lack the required sales experience and knowledge of the sales process in selling their professional services. It is the recruitment agencies that plug that skills gap.
In the case of IT contractors for example, recruitment agencies are responsible for finding over 85% of contractors contracts with their end clients. Not only do agencies find contractors work; they do it on a commission-only basis. Some contractors, particularly those new to contracting, naively assume that they can find their first contract from a standing start without an established personal contact network.
Some contractors may be able to achieve this, but they are few and far between and I’ve yet to meet one. More often, it is only after many years that contractors have a sufficiently robust personal network, in which they have invested much time and expense, that can then establish an on-going stream of lucrative contracts.
So, to those contractors starting out and who resent the idea that an agency takes a cut out of their day rate, I would urge them to ask themselves whether:
- a) they have the skills and resources to successfully undertake the sales process; and
- b) whether they could do it more cheaply than the cut they give to a recruiter that has found them a contract.
Be thankful that there are salespeople out there prepared to sell you, find you contracts and negotiate on your behalf. All that at a reasonable rate.
And remember, if you think the recruiters cut is too high, then negotiate… That’s sales!!
This post was provided by Cameron Carnegie – a Business Development Consultancy that specialises in the professional services sector. They also work with owner/managers of SME businesses in a broad spectrum of sectors as well as a number of leading national and international organisations. Their strategic business development philosophy is results based and incorporates sales, marketing and social media.
If you want to learn more, don’t hesitate to get in touch with one of our experts.
More Blogs
Is Freelance the Same as Being Self-Employed?
Whether you choose to operate as a limited company freelancer or a self-employed sole trader, each has its own set of benefits and challenges. Understanding these can help you make an informed decision that aligns with your personal and professional goals, ensuring you take the path that best suits your needs in the complex landscape of self-employment.
What are Payments On Account For Self-Assessments?
Understanding and managing payments on account is crucial for taxpayers within the self-assessment framework. Effective planning and budgeting are key to handling these payments without disrupting your financial stability. With careful management and the right tools, you can ensure that payments on account do not become a burden, maintaining smooth financial operations throughout the year.
What is an Umbrella Company?
An umbrella company acts as an employer to contractors who work under temporary contract assignments, usually through a recruitment agency. This arrangement is typical in industries like construction, IT, and education. An umbrella company simplifies the administrative process for contractors by managing payroll, taxes, and other employment-related paperwork.