How to negotiate agency rates with confidence

Agencies supplying temporary staff provide an important resource for the day-to-day running of schools, but how do you know you are getting a good deal from your agency?

Published 8 January 2020

Last updated 8 January 2020

You have every right to check you’re getting the best possible deal, and it’s something we recommend you take steps to do. If you were buying a new car you would shop around to find the best price, interest rate and terms and conditions for you. The same is true for the supply of temporary staff. In this blog we give you our top tips to help ensure you are getting a good deal.

Shopping around for an agency may seem uncomfortable due to the mystique created within the education market. We want to dispel common myths and give you the knowledge to confidently negotiate the best possible deal for your school. You might feel that you don’t have the time to negotiate the best deal for urgent bookings. We recommend planning ahead and agreeing rates with your agencies in advance. This will result in long-term cost savings and time management benefits, ensuring you get the best deal no matter how last minute a booking is. You won’t need to renegotiate every time you require a temporary worker. The agreed rates will be set until you next review them with your agency or agencies.

Top tips

Understand your position

make sure you know how much you spend on temporary resource in your school and with which agencies
are there other schools that you could partner with?
- combining your spend with other schools will give you a higher overall spend and better negotiating power
what daily charge and mark-up rates do you currently pay?
- if you do not know, you really must ask
speak to your peers and find out what are they paying to help you gauge what rate is reasonable

Determine your bargaining range

establish the optimum daily charge and mark-up rates you would like to pay, as well as
what is the highest daily charge and mark-up rates you are willing to pay?
- this will show you the range within which you should negotiate

Communication

invite the agency or agencies you use in for a discussion – this is more effective if done face to face
define your negotiating position and discuss:
- agency performance – have you received a satisfactory service from them?
- spend – set out what your anticipated future spend will be
- discuss challenges:
  - is your school facing cutbacks?
  - do you need to reduce unproductive time by limiting the number of agencies you work with?
discussing these issues will help incentivise the agencies to retain your business rather than lose you to a competition
- it often leads to more attractive rates being offered
work out a mark-up rate which is acceptable to you and the agency
- if the agency is unable to meet your requirements do not be afraid to walk away
remember that this should not be a confrontational conversation: clarity and communication are key

Dispelling common myths

The benefits of negotiation are not worth my time and effort

It is not a waste of time to save money (and time in the long run). It’s true that the initial process of getting a better deal needs an upfront investment of time, however, the result will be a fair price every time you need a worker, no matter how last minute. Peace of mind and controlled costs will be worth the time spent negotiating with an agency.

If I try to renegotiate with my agencies our good relationship will be affected

Negotiation is common practice in the recruitment market and can generate positive outcomes for all parties. It should not be a process that adversely affects professional relationships and most agencies will respect your need to get a good deal. This enables you to spend your already strained budgets on other vital resources.

A higher charge rate means the worker gets higher pay

Not necessarily. If you are paying a higher mark-up, this could significantly diminish the worker’s pay. If you pay a lower charge rate with a lower mark-up, the teacher can still receive more than if you were paying a higher charge rate with a higher mark-up. Read our recent blog to find out more about the impact of mark-up rates.

I am not entitled to know what the mark-up rate is

You are entitled to know the mark-up rate you are being charged, subject to general data protection regulations. This information is not commercially sensitive when shared between the agency and their customer – which in this case is you.

I have to sign the agency’s terms and conditions

You can request agencies sign your terms and conditions. Under the Supply Teachers deal, agencies use the CCS framework terms and conditions. These are written with the best interests of schools in mind. They also mean you have peace of mind that agencies are adhering to the Keeping children safe in education standards.

My agencies have exclusivity over workers

It is rare for an agency to have exclusivity over a worker. Most workers actually sign up with several agencies, which creates competition in the market. If you are able to offer more competitive pay, workers are more likely to be attracted to your vacancy.

I can’t avoid temp to perm fees

Agencies can charge transfer fees to protect their legitimate business interests through temp to perm fees. Agencies must, however, provide you with the option of an extended period of hire or a transfer fee as set out in The Conduct of Employment Agencies and Employment Business Regulations 2003. Temp to perm fees can be avoided with the Supply Teachers deal, when a worker has been in post for 12 weeks or more and 4 weeks notice is given to the agency.