I wonder if something like an agent could help with that.
In many freelance-heavy professions, like music and acting, having an agent handle this part of business seems to be the default. Is there something similar in tech?
Maybe not. The agent should get a percentage of your income and should be trying to get you the best income possible (well a mix of bess possible / low vacancy rate)
But the employee gets let’s say $150k/y and f you are hired out for $5k a day you still get your same salary regardless.
When you are a regular employee at an agency you don't have much of a choice on what jobs to take. With an agent you are much more free in that regard.
Being a contractor for an agency is the worst of both worlds: no choice on what to work on that you'd get as a freelance contractor and no career growth wherever you're placed.
I did it for a year and it was miserable. It was great for the first few months, but then I started getting put on more and more menial tasks just to fill out my contract duration and I realized that there was no real point in understanding the systems I was working on in much depth beyond what it took to execute my task.
The other contractors who'd been at it for longer wrote some of the worst code I've seen, even though they were obviously very talented; they just didn't see the point of writing beautiful code if they're not going to be around in a few months to maintain it.
It's called recruiting, but it doesn't work like you described.
In freelance tech recruiting, the jobs are the scarce resources, not the candidates. Freelance recruiters focus their effort on obtaining new positions for them to fill in, and only then they look for suitable candidates. You can see that in how they angle to find out about other companies that you're interviewing in - they do that, because they very much need it as another lead.
In other words, nobody would care about becoming your agent, because you're fungible. That's why it's not done in our industry. I suspect actors are much less fungible (you can't cast a 20 years old white cheery woman to play 50 years old broody black male who can ride on horses and do a british accent), hence market dynamics are different there.
I am a former recruiter and wrote an article about this years ago. One of the main issues with third-party recruiting and the recruiter/candidate relationship is that their interests aren't aligned.
In perm hire recruiting, the recruiter is typically paid a percentage of the candidate's starting salary. That means the recruiter and candidate are aligned in negotiation - if the recruiter can negotiate a higher salary, both the recruiter and the candidate are beneficiaries.
Therefore, the more the candidate makes, the more the recruiter makes. Win/win.
For contracting roles, a recruiter is a middleman and trying to maximize their margin, defined as the difference between bill rate (what the client pays the recruiter) and pay rate (what the recruiter pays the candidate).
There are only a few ways the recruiter can maximize margin.
The most obvious is to negotiate the bill rate UP and/or the pay rate DOWN. A less obvious way is to simply try to make sure the candidate with the lowest pay rate gets the job. So if I have two candidates and one is asking for 100/hr and the other is asking 120/hr, if I can get the 100/hr candidate into the job, that means an extra 40K in the recruiter's pocket for a year (based on 2000 hour work year).
I'm admittedly oversimplifying a lot of things here, but the typical recruiting model is not aligned with candidates for contract hiring.
Is there a true difference between those two models though? In the end, the client has to foot the bill, no matter how the money is allocated between commission and candidate.
As a recruiter, you could have a similar model for contractors and promise a fixed % of the daily rate. That way, the higher the rate of the contractor, the bigger the commission for the recruiter.
However, I do see your point and I notice most recruiters not being very transparant about their commission, nor do they want to give it up & work with a fixed fee instead. I know one small agency who's very open about their commission and promise to only take a cut for the first year. I hope eventually other freelancers will wise up and choose those types of recruiters over the more shady businesses.
The recruiter argument against a fixed % is that they should be rewarded for their skill in negotiation.
In other words, let's say market rate for your programming skill is 150/hr. I'm your recruiter, and I make you an offer for 170/hr. You should be ecstatic. But what if you find out that I am billing the client for 1000/hr? Would you still be happy? Probably not - you'd feel you're being robbed, even though you are being paid above the market rate.
So should YOU be rewarded for my ability to negotiate the client's rate to 6x market rate?
I'm not saying this is fair or a good way to do business, but I'm just offering you the recruiter's mindset on this.
There are a number of contractor agencies where they basically manage your relationship with a number of businesses/specific projects, and you get paid through them or some affiliate. The skim is usually more like 30-50% though.
I think it's a bit different than what I meant. In this agency case, the freelancer works for the agency, in the "agent model" the agent works for the freelancer.
I work at a place where about 500 independent consultants/contractors have outsourced branding, training (to a degree), office admin, and, above all, sales to a shared organization.[1] Those who want can become "partners" by buying shares (I have). Importantly, this setup also provides a community because solo consulting can otherwise get lonely at times. But essentially we're all still entirely "our own" and free to choose how much we want to work, whether we want to pursue side projects, etc.
We pay 17%. So not quite the 15% you mentioned, but also far from the 30% others talked about.
We're only in Sweden for now, so maybe this isn't immediately accessible to you. But it shows that it can be done.
These umbrella sales / networking / socialising organisations are fun. I've tried a few. But 15-20% is highly inefficient.
My overhead for cold-finding new clients is <5% (against those projects), and I'm not a good salesman: I'm overly direct, opinionated, and have very low tolerance for nonsense.
My overhead for recurring clients and referrals is <1% (against those projects), which is also the majority of my business.
Admin, billing, accounting, etc is also <1%, so it's a non issue.
These sales organisations have _much_ better salesmen than me, yet they need >3x the cost to do the job, and they produce worse results?
My guess is: if you actually tried to spend one day per week (20%) for sales and networking you will get a better result. But for many (including me) it is uninteresting / uncomfortable / annoying / etc and therefore many of us overestimate the difficulty of sales.
There is also very likely a notable difference in interest alignment between the sales partners/employees and you. They will make more money/h the faster they sell you and therefore have greatly reduced monetary interest in working significantly more for a higher quote or a more specialised project. They also do not have the deep domain knowledge you do in your areas, and you are much better at judging how well you will enjoy working with a prospective organisation and how interesting you will find any given project.
My experience: Yes they can sell you. They will get lower quotes than you will get yourself. They will find worse projects than you will find on your own. And they cost too much. Still, I had fun with all the groups I've tried, and I still recommend them as a social luxury. Fun, overpriced, business friends.
A very significant part of the pool of interesting projects in "my" market is only available under framework agreements for which solo consultants will not be considered (but Kvadrat will). If I were completely solo, I would have to bid for such projects through brokers who would happily charge me between 5% and 20% without really giving me anything back besides acting as gatekeepers.
Instead, all my cold calling, contract negotiations, billing and accounts receivable — things I'm not good at and don't enjoy doing — get taken care of. I'm happy to pay for that. The "luxury" of "business friends" is included.
Indeed, this sounds highly inefficient. Say, 15% of a daily rate of 800 euro for 200 working days equals 24,000 euro, recurring every year. Seems like a ton of money for just matching a candidate with a job, given that the freelancer still has to sell themselves and do all of the actual work.
Being a freelancer myself, I've often asked recruiters about this, and they always dodge the question or reply something like "there's much more to our job than you think". I have not yet figured out what that is exactly.
My best guess, from personal experience, is that they charge 15% and upwards because... they can. Because a lot of (especially technical) contractors are really bad negotiators and just accept whatever is offered.
Given the huge competition between recruiting agencies nowadays (at least where I live in Europe, it seems like there's 10 recruiters for every senior developer), I would think that a new recruiting agency could gain a huge competitive advantage by simply advertising clear & fair commissions.
The geography does limit me (US), but wow this sounds awesome, exactly what I want.
I have talked to consulting/contracting shops here in the US before, which might look superficially similar, but there you are generally a direct employee of the company who then contracts you out to their clients. I have generally had a poor perception of such places, though I'm sure some are fine. Kvadrat sounds much better!
I picked 15% thinking about the old default for entertainment agents. I know 30% is normal for external recruiting fees, why does a "dev agent" get the same? Because they can?
If the gigs found are high paying enough I don't think 30% is unreasonable.
In my previous position we built a lot of wearable devices so having a dev system at home was no problem since they're portable by definition. Likewise at my current position, we have larger, but still easily movable development/debug systems since the product I'm working on fits on a desktop. Takes up more room with everything splayed out on a back plate, but still fits on a tabletop.
But going back two jobs where the machines we built were large, very complex and floorstanding, it would be much more difficult.
It's also much easier when the hardware is stable. When you're still in the "bring up" phase, there's a lot of shipping hardware back and forth, or occasional office days together if feasible, especially if you need a $70,000 tool that the company doesn't want you taking home.
As the pandemic has progressed, embedded development has adapted. The biggest reason it's likely to reverse is simply that a lot of companies prefer to have their people onsite.
Yeah, I think a lot of engineering managers still think it's impractical. It worked out well for me on a few projects, but I got them from people I had previously worked with in person.
However, I'd be fine with any kind of work, it doesn't have to be firmware.
In many freelance-heavy professions, like music and acting, having an agent handle this part of business seems to be the default. Is there something similar in tech?