just to shed a little light on the subject of how much agencies make, i have worked for 2 companies one up north who had a horrible firm rack up in excess of 40k debt then go under and restart the next day.
and down here i have known another company who have tried to fleece at least 3 agencies for over 30k each (i have worked for 2 of them!) luckily 1 got paid the others i dont think were so lucky.
so for you £2-3 margin its a calculated risk especially in haulage!
and the worst thing is there are still people fighting to supply these low lifes.
war1974:
work out pay rate add on NI, holiday pay and pension then add on how much you want to ‘make’ then thats it!
fyi if you pay someone £10 per hour it costs approx 12.40 before any profit
It should be pointed out that this relationship is NOT linear.
For £20ph, it would not cost “£24.80” - but more like £22.40 is what I’m saying…
The higher the base rate of pay therefore, the lower the percentage overhead.
Yeah actually it is linear as statutory holiday pay and employers NI are fixed as percentages. So it would cost £24.80/hr. Overheads don’t come into it.
If it is linear, then why on earth don’t we have Agency Footballers, Agency Celebrities, Agency Politicians, etc etc?
The very notion it costs a linear percentage for the overheads OTHER than tax & insurance seems bonkers!
It’s like saying ‘it costs more to take a taxi to the airport because you’re older/fatter/male/British’ or whatever.
Stick an extra person the same size in the taxi, and the cost does not double - not anywhere near it. The government will not be levying a linear amount of extra tax on the takings for two passengers instead of one either.
Winseer:
If it is linear, then why on earth don’t we have Agency Footballers, Agency Celebrities, Agency Politicians, etc etc?
Celebrities and footballers are agency to all intents and purposes. They’re not employed by the football club etc, they’re separate business entities with their own managers and provide a service to a client.
The very notion it costs a linear percentage for the overheads OTHER than tax & insurance seems bonkers!
Nobody but you has mentioned overheads. The only things we’ve been talking about have been employers NI and holiday pay. That is why I said its linear because the employers NI and holiday pay were what was being discussed.
Chap I’ve known for years is still on agency and he was saying about the rates had gone up 80p phr …he was chuffed.
Told him to tell the agency he wanted another £1 phr as he could get that on another job doing similar work …kerrrrrrrrrching the upped his rate so he’s well happy a £1.80 ph pay rise in 2 months
jonnyquango:
I am trying to ascertain what the average hourly rates of pay an agency would charge a client. For example, if a driver was paid £10 per hour by the agency there would be additional costs on top of this for the agency but what is the margin the client would pay the agency. Would this be £12,£13 or more £s per hour.
Hoping some of our more business minded members can help out here
Cheers JQ
This isn’t easy to generalise on as there is some variation based on job/area etc.
But often well over double what the driver is paid. I have successfully extracted quite a bit out of agencies in the past without effort… up to five quid + per hour on occasions without too much effort.
It would surprise a lot of drivers the amount (though not always of course), the company are paying for their services…
It surprises me how much rubbish a driver can dream up
On a contract I binned recently, the client paid £12.20 per hour and £11 of that came to me. I have seen it in black and white for myself. Nobody would pay double what the driver gets
That’s down to the agency then. The client I am currently working for wont pay £17 per hour. I don’t know what he is paying but it is obviously less than that. The gap certainly isn’t as much as some people seem to think it is
Depends on the work a lot. Since multidrop food deliveries are so unpopular with drivers for example, you might see many agencies charging about £15ph to a client, and passing £11ph onto the driver (let’s use weekday rates here for a benchmark)
Work requiring use of specialist trailers & attatchments such as Sewage, Tankers, HIAB, Moffet, or even roll carriers - might need a ticket to use such, but many yards just want someone inducted/experienced rather than “with a certain ticket”. You might get such client yards paying an agency £16ph for drivers, but the agency still pays the driver the same £11ph as in the previous example. Over time, the number of drivers available to do the “speicliast” work might start to dry up, and at this point a differential in pay rates might be set up.
With HIAB and MOFFET of course (ie those requireing an actual ticket) that differential might be in place already…
There are invariably some hoops for newbie drivers at a client yard to jump through - if they are to pick up the plum work. For those for whom “plum work” is what most other people hate (eg imagine if you LIKED multidrop food deliveries!) - then I’d say Happy days have come as of about 6 weeks ago… Plenty of work out there both full time and on agency…
Long distance trunking overnight on the other hand used to be unpopular (it’s boring driving 400 miles up and down motorways every night…) - but with the ageing driver population as it is now - I’d suggest it has grown in popularity to the point that middle-aged drivers PREFER this kind of work to the “early starts” grind popular perhaps over the last couple of decades for the “working family man” who wants to be home in time for tea, and possibly a pint or two down the local with their mates… Family now grown up, more money required to get that mortgage cleared, some of their mates already missing - the appeal of moving from days to nights as one gets near to retirement is obvious. Those on a final salary pension will also bump up their pension A LOT if they spend their last decade before retirement on nights as well - it has to be said.
Fully agree, Winseer. The reason Tesco at Goole is one of the best paying agency jobs in the area is because nobody wants it.
As for the night trunking, when I was at TPN on Tuesday night it was quite surprising just how many of the drivers looked at or past retirement age. It was either that or young kids driving blinged up units. Same at the APC hub as well. Have to admit I do it from a pathological hatred of being woken up by an alarm clock.
I realised I was cut out for nights back as a teenager, when I found I could effortlessly stay up to 2-3am even on “not enough sleep”, but I’ve always felt knackered at 8-9am regardless of how much sleep I had prior to the shift I was on. Getting up at say, 10pm for a 1am-10am shift was like “early early” rather than “super late” for me essentially.
As for ‘getting up in the morning’… I have a pathalogical hatred of that with or without an alarm clock!
I wanna be in bed by morning rush hour - always.
My ideal shift is 6pm-5am - such as I’m on tonight. I could also have done 3pm-6am at a push as well, these representing my ideal times for doing a 15 hour shift…
winseer if you work it out logically rather than with blinkers on (fail to see what the taxi analogy has to do with a rate unless they start charging more per kilo) it still costs around £13.65 to pay a driver £11 so that leaves a (margin) of 2.35 on £16 charge that is possibly why a driver wont get paid anymore for having hiab etc.
however most will pay a bit more (normally £1 unless we have a dirth of said driver in the locality) and charge more, i speak to some companies who would rather stand a truck than use agency then complain when a drive is off that its costing them x,y,z to sit it in the corner of the yard.
yes you are right market forces drive the rates but even this will have a cut off point where it levels out.
I thought my linear agument was refering to it costing say, £13.65 to pay £11 and £23.65 to pay them £21… The same flat rate merely added onto the end.
This would mean it would get progressively cheaper in overhead percentage terms to pay a higher base hourly rate.
It doesn’t stand to reason that a £2.65 surcharge being used for “margin” purposes has to be raised to a lot more - as the base hourly rate increases. This, I would suggest, is merely profiteering by the firm.
Thus, if I were starting an agency - I would be chasing the former model rather than the latter one. It would mean no matter what hourly rate I paid, I’d be making the same margin per driver/hour, and therefore I’d elect to charge/pay a higher base rate from the very outset - because I’m going to get more bums on seats for £15ph than for a tenner!
If, I’ve got no work on the other hand, then I’m going to drop my rates, to get shod of a few drivers - driving away the best ones first most likely - and encourage client yards to load me with some more work - because ‘I’m cheaper’. Everyone else might think this ‘a real swell idea’, but I think it’s a recipie for disaster in the medium-to-long term!
Among a bunch of agencies all with roughly the same margins - the one that wastes the least will be the one that profits the most. Pretty much the same with any business really, but there again most firms think that the way to make more money is to employ more for longer for less than get waste to a minimum, by employing proper professionals that have a greatly reduced risk of adding to a yard’s loss deduction sheet…
but the costs increase as the more you pay the more it costs? if you add 10% onto a £1 its 10p 10% onto £10 is £1 hence more cost the only way your model would work is to be a scumbag ltd company or umbrella scheme only agency where the guys are forced into one or the other and then yes you can say to any companyits the pay rate plus £3.
not a good way to attract drivers from my own experience.
jonnyquango:
I am trying to ascertain what the average hourly rates of pay an agency would charge a client. For example, if a driver was paid £10 per hour by the agency there would be additional costs on top of this for the agency but what is the margin the client would pay the agency. Would this be £12,£13 or more £s per hour.
Hoping some of our more business minded members can help out here
Cheers JQ
This isn’t easy to generalise on as there is some variation based on job/area etc.
But often well over double what the driver is paid. I have successfully extracted quite a bit out of agencies in the past without effort… up to five quid + per hour on occasions without too much effort.
It would surprise a lot of drivers the amount (though not always of course), the company are paying for their services…
It surprises me how much rubbish a driver can dream up
On a contract I binned recently, the client paid £12.20 per hour and £11 of that came to me. I have seen it in black and white for myself. Nobody would pay double what the driver gets
The primary agency I contract to has always made a point of slipping into every conversation “I don’t make anything on you as it is” which, knowing how much crap comes out of their mouths, I’d concluded to be exactly that: a load of crap. Some time later I happened to stumble upon their client’s Excel spreadsheet showing the rates all their agency suppliers charged and it was quite an eye opener. The main supplier (which is the agency I go through) make the grand sum of £1/hr on my basic rate and £1.13/hr on my overtime rate . Even the 2nd and 3rd tier agency suppliers were only marginally more expensive. Even the thick [zb]s that work for the rate the agency tells them still aren’t going to be making the agency more than £3/hr at the most.
Maybe back in days of old when there weren’t that many agencies about they could make double on what they paid their temps, but these days where everyone and their brother is running an agency there’s just far too much competition to be making those kind of margins. As an agency the only thing you can compete on that’s of interest to your client base, is price. But the lower your price, the lower your rates to your drivers . Agency drivers tend to flock to the agencies that pay the most so while you may now be the tier 1 agency supplier for your new client with your super cheap price, in reality it means diddly squat as you can’t actually supply them with any drivers when they need them .
totally agree with some of the above, in the 1990’s yes we could charge what we wanted as it was a whole new thing in the world of Haulage!
yes again too many little mickey mouse agencies are about trying to cut the rates down to the bear min and working tirelessly to make very little ( i know a good few contracts like this ).
the other side of the coin is HR departments are more comercially aware so therfore they also contribute to lower rates.
war1974:
but the costs increase as the more you pay the more it costs? if you add 10% onto a £1 its 10p 10% onto £10 is £1 hence more cost the only way your model would work is to be a scumbag ltd company or umbrella scheme only agency where the guys are forced into one or the other and then yes you can say to any companyits the pay rate plus £3.
not a good way to attract drivers from my own experience.
Where does the actual extra cost to the actual agency come from?
I’m suggesting if take as your margin £1 on £10ph paid to the driver, you’d NOT be moaned at for “crooked umbrella” or all the other ills if it were £2.20 on £22ph…
The Agency is getting an extra £1.20ph margin - for no extra work at all! Who’s gonna complain though?
If the hiring yard can simply “Make do” with an inferior driver’s agency, if they don’t fancy paying the top dollar depicted - they’ll presumably do that…
Take RM this coming Christmas for example… You’ll get top dollar PAYE perhaps, but no extra for Ltd/Umbrella because they don’t want “private drivers” - they want the fully insured employee drivers! You’ve got the choice of PAYE or nowt there, and have to pass an assessment to get in. Now look across the road to somewhere like TNT who’ll put all their agency on some kind of job & knock contract, so a lot more smashed up vehicles, customer complaints, shed loads, and PCNs ensue for that great old cause of “knocking a few quid off the going rate”…
Let’s hear from someone at TNT who’s on over £15ph and getting 12-15 hour shifts whenever they want it this Christmas - or, come to that, any other courier firm I’m not familiar with.
I’m offering a full half-hour argument here absolutely free…
The profit, being the same per driver but with a much higher hourly rate for the driver - means you’ve got 100 x drivers making you £1.50ph x 10 hours per day for example (£1500 operating profit per day) compared to only getting 20 x drivers making you £1.50ph - or any other number “lower than 100” - since you’ve put a lot of drivers off signing up with otherwise inferior pay…
. Even the 2nd and 3rd tier agency suppliers were only marginally more expensive. Even the thick [zb]s that work for the rate the agency tells them still aren’t going to be making the agency more than £3/hr at the most.
. Agency drivers tend to flock to the agencies that pay the most so while you may now be the tier 1 agency supplier for your new client with your super cheap price, in reality it means diddly squat as you can’t actually supply them with any drivers when they need them 
