Hello !
I am a EU citizen that moved to Switzerland about one and a half years ago to work for a Software company that employs me in various client projects.
I keep seeing contracts that state that the rate they sell my time is CHF 160-200 on average. This is about 3-4 times as much as I earn in my permanent ("unbefristete") work contract with said Software company.
Further, they have found client work for every day I work for them so far. This means I haven't been a liability for them for the entire period I work for them.
Can you suggest any companies that act as (software) contracting agencies, provide me with work but take a (fairer) cut?
Cheers!
I suppose they have paid AHV, Pension fund contributions, SUVA contributions and other insurance, holiday pay etc. for you.
Correct, they have. However, they have been able to bill every single day to the client. What I mean is that I have not been "on the bench" (i.e., not produced income for them).
If you can find a company that will to pay you those rates off you go.
This is the age old question in contracting.... The agents are, like you, in business to make a profit and the objective it to make as much as the can, there is nothing about fair involved. They are going to charge the client as much as they can and pay you as little as they can, just like you are going to charge as much as you can.
It is business, don't expect anyone to graciously hand over their share of the pie to you. Life is like that.
Thank you for your response !
I get that this is their business model. If I change to a different employer (having the same common business model), I won't be able to significantly change my outcome.
Question is, is there a company that acts as an agency to connects me with clients directly and takes a fee for that service.
Do you know any company that operates in that way?
I can't rename this thread but I should better have named it
Software Procurement Agency
The cut that an agency or an employer takes shows the value to have the client.
You can earn more or have a higher rate if you have your own clients and deal directly with them. It's relatively hard to do this on your own but if you manage and grow, you will finally be in the same position as an agency - or higher up in the chain.
If you're working as a genuine employee then that's quite normal.
I've sometimes worked for companies that take in work from other companies (CRO's to be specific) and as a contractor I'd earn maybe double what the permanents did. I'd be charged out at double what I earned.
If you're a contractor paid based on the hours you work through a big agency like H@ys then their cut could easily be 40% or more.
If you've found a client to work for and just want someone to process the payroll then SDE take something like 50-100 per day as a fee.
Well there has not been one for the past 30 years....
You want to make as much as you can, so why would you expect anyone else to take less than they can make..... If I can make 30/50 CHF an hour of you why would I settle for say a 1000 CHF a month instead.
Can name a few. The decent ones take around 20%. The really decent ones are transparent about it but are really few and far between. Still after their 20% or more cut you still get employee and employer expenses deducted. Best is to keep contact with your client's clients and go back to one of em, but not the current of last one, as a contractor.
I had good experiences with
swisslinx.com bosshardpartner.ch
Both local established agencies. They took about 15-20% commission for themselves. My advice: Stay away of UK based agencies.
Can 2nd the above. Stay away from any agent not based in Switzerland.
Long story short: the OP is a perm employee. With the hourly rate billed to the customer does his employer not just pay his salary and social insurances but among others: the rent for the office, the costs of sales including the sales team, the HR department, the management, the front desk lady, the internal IT, the paper for printer as well as toilet and God knows what else. Yes, the billable hours are the cash cow of the company. But none of that would happen if your employer did not spend on a sales team first which found that customer you are billed to and made a contract. The OP would not get his contract if the employer did not have the references and guaranteed his work...
Contracting is an entirely different business - you get paid more but it is usually short to mid term projects. Plenty of agencies do those - but they will not "find you a job"... if they happen to have a matching offer will they take you and if not are you on your own.
I have done both myself and both have up- and downsides. But to understand them requires a basic understanding of how a business works. My garage charges me also 200 CHFs per hour to repair my car. I am pretty sure the mechanic makes less money than the OP. Because that money pays for the entire infrastructure of the garage and not just the mechanic.
Holiday pay, sick pay, the risk of being on the bench and not generating income but still paying his wages.
Some consultancies give a bonus based on billable days.
Thanks for your input. Double the amount of permanent is a significant raise in income. A friend that works in Austria also reported about the same. He switched to a self employment contract with the same client he worked with while at Accenture.
CRO = Clinical Research Organization?
SDE = is that a company?
.. to highlight that the core part is to support in procuring software project work. To do the payroll tasks, there are already widely used companies. Disclaimer: I haven't used any of them but they are that well known that they even run advertisement on Swiss national television.
That does sound like solid advice ("go back to one of em"), thanks Robert. Are you aware that this is considered common? Or in other words, from your own experience or those you know, what is the ratio between finding new clients to work with and working for previous clients?
I do realize that there is an overhead to the operation of a software company that lends out work to various clients. However, most employees (>90%, maybe even 95% in a 500+ people company) in such a company work in "delivery" and are therefore potential cash cows as long as there is (enough) work around.
Of course, if you are not in a permanent contract, you have to take care of obtaining new or renewing contracts with clients (well ahead of time).
Can you share any of these agencies and your experience?
As a side note: Some of these companies grew over-proportionally over the last few years. Not having to increase office infrastructure due to people working from home helped that development. Now some of them have issues even fitting all employees back in their offices. They want people to go to the office only some days of the week, further reducing their expenses or need to expand infrastructure.
Thank you Dandy! 15-20% commission is a lot less than getting paid say CHF 50/hour (pre-tax) that is billed to clients at a rate of CHF 160-200/hour (pre-tax). Not considering the expenses of a software company (briefly discussed in the post above), they get 70-75% of the pie.
Even if, say, their overhead is 25%, they still profit equally even though the majority of work is done by the "delivery" worker (i.e., the software engineer).
Or maybe I am ignorant about some of these aspects?