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Steel man arguments for staffing agency?

2 points by jes ↗ HN
Hello -

I'm an experienced embedded systems developer, 62, and I have been approached by a staffing agency for a gig in nearby city.

I have interviewed with the team lead. It went really well. I'd like to take the gig, but I'm choking on the idea of working with a staffing agency.

I have had my own business since 1996, and I've been contracting with individual clients ever since. It's a been a good business.

I see working with a staffing agency (I'd be corp-to-corp) with them as introducing a third party into the relationship, and that they would be basically rent-seeking off of the relationship over the longer haul.

I think this gig could be 5 years or so of good, interesting work at a reasonable rate.

At the same time, I want to be objective as I can be in my thinking about this. I'm having trouble seeing any benefit from having them in the loop for the long term.

Are their any good arguments for working with a staffing agency on a gig that would last more than a year?

As you likely know, the staffing agency makes it contractually difficult, if not outright impossible, to cut them out and for me to work directly with the client on a corp-to-corp basis.

I would be willing to put up with the staffing agency for six months or a year. What I find hard to swallow is working with them in the loop for a longer period.

Thanks for any advice you can offer.

8 comments

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t-3
Staffing agencies are favored by businesses because they help offload much of the hiring/HR/legal and allow the business to focus on it's main concerns. From a contractor standpoint, as long as the pay meets your requirements, why not? You could hypothetically be making more without them, but there are a lot of assumptions in that hypothesis, and if you could get the contract yourself you would already have it.
jes
All of what you say makes sense.

One option, I suppose, is take the gig and work it for a year, while working on finding a better one during that time.

I really don't like the idea of having a third party in the mix, for the same reason I wouldn't want a third party moderating my relationship with my partner.

I also think burdening the business relationship with 25 - 30% overhead isn't helpful. Yet like you say, if the deal meets my financial constraints, why should I care?

Thanks for the help.

hunglee2
think of it like this: the margin the staffing agency is charging is the cost-of-discovery for both the supplier (you) and the client (end employer). Seems like this is a great fit - in a market with imperfect information, what are the chances of you two both being able to find each other? The end client has saved on advertising costs, you have saved on having to look at those adverts. Unless the margin is egregious - and you get the rate you're happy with - I don't see any problem
[deleted]
(comment deleted)
jes
Thank you. I think I figured out what was bugging me.

I see the relationship as rent-seeking[1]. I'm assuming the agency is going to take somewhere between 25 - 30% cut on all hours billed to the client.

Over the first year, that amounts to about $57K. I'd be OK with paying that tax for the first year.

Yet I can't just cut the agency out of the deal after the first year. Anytime I cut them out, I have to leave the client for a year.

I get this. I understand it's common practice, and designed to keep providers (like me) from ever cutting the staffing agency out of the deal.

I think what was / is bugging me hinges on whether I look at this from the perspective of "It's everyone for themselves" or "What's good for society also matters."

In rent-seeking, one party is extracting value on an ongoing basis without doing anything productive (also on an ongoing basis). While it may be good for me on a selfish basis to take this deal, I question whether it's good for our society at large for people to engage in rent-seeking transactions.

I think I have clarified this a bit for myself. If nothing else, I learned a bit about why people can be of different opinions about rent-seeking.

Again, thanks for your help.

[1]. https://en.wikipedia.org/wiki/Rent-seeking

hunglee2
agree with this, after introduction the role becomes parasitical, unless that agent has an agreement with you directly to constantly find other / better opportunities on your behalf. Given what I know about employment law, they should not be able to do this if they also represent the end employer.

another way to look at it is to review your ideas on rent seeking as being 'always bad'. I think in most cases it is, but perhaps we can also understand rent seeking as a pen test of a system, forcing it to improve. Parasites exist in biology - the trick maybe to try find a way to make them symbiotic rather than just parasitical

good luck!

jes
I really appreciate your insights here.

I declined the position today.

Thank you for the help!

raincom
First, the contracting company will ask you to sign a clause saying that you don’t seek contract with their clients. Here, you can add a conditional: it is valid for 6 months after the contract. You can quit and do c2c directly after 6 months. You can even knock it down to 3 months.

The other option is to jack up the rate that you think you are worth, and forget about how much staffing company makes off of you. Definitely for sure, they will make 20 percent.

Or don’t sign this contract and find the contact at the vendor management, try to present yourself. This is difficult unless you know insiders.