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Why do most contractors work via agencies?

Most IT contractors contract via recruitment agencies.

Although a significant number contract directly with clients, why don’t more contractors go it alone and cut out the middle man?

Ten reasons why most contractors use agencies:

1. Most clients prefer to outsource the recruitment of contractors to agencies, so you may not have a choice in many cases. This is the fundamental reason why most contractors do not work directly for clients.

2. Agencies handle the contract negotiation and administration with the client company, so you don’t have to get involved.

3. Agencies deal with all payment issues with clients. You shouldn’t have to chase a client for an overdue invoice.

4. You won’t necessarily secure a better rate for your skill-set if you contract direct for a client (although, significantly, you will not be paying an agency any commission!)

5. Even if you find a role directly via an old colleague, you may well be required to contract via the client’s agency.

6. Many companies (and most of the larger ones) use a list of preferred supplier agencies to resource contractors. You will only be able to work for such clients via these agencies.

7. Agencies will market your CV for suitable contract roles when they arise, so you don’t have to (more about how some agencies ‘market’ contractors in a future article!)

8. Cold calling potential clients directly can take a lot of time and energy, and will require a certain amount of sales flair – something which doesn’t come naturally to many of us.

9. Agencies will deal with all contract-related issues (between you and them, and the agency and client). However, it is still worth seeking specialist IR35 advice before signing anything.

10. Many contractors do not have access to the contacts and clients that recruitment agents do, and may find it hard to secure direct contract work.

We will look at how contractors can secure more direct contract work in an upcoming feature.

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Last updated: 4th November 2014