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Is it appropriate to ask what a prospective employer's expected margin would be?

I'm a contractor working on an established, long-term contract, and I'm currently in talks with a new staffing firm to represent me going forward. While trying to figure out an appropriate rate, I'm wondering if it is appropriate to ask what type of margin my prospective employer would be expecting?

I'm privy as to what my current billable rate is, and looking to ensure that my negotiations will yield a fair balance for me as well as my employer. But in doing so, I also do not want to overstep my boundaries.

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    Margin? Like net profits? Margins are usually a percentage, and that's pretty useless to you. – Nelson Oct 11 '16 at 1:34
  • Why are you going through a 3rd party your not a contactor but an employee of a body shop – Pepone Oct 12 '16 at 7:34
  • You seem to be worried that the company you're contracting for will earn significantly more from your services than you will... which you seem to imply is "unfair". Ask for what you think you deserve to get paid, and what you can live happily on. The company will charge what they think is deserved for the product/service provided. Neither party in this exchange should care about what the other thinks they deserve, unless they don't agree that its deserved. – Trotski94 Oct 12 '16 at 7:38
  • @JoeStrazzere I only know details about my current deal--not the deal that I'm negotiating with the new agency. – alkalinecoffee Oct 12 '16 at 13:40
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    @Pepone some (larger) companies require contractors to work with only an approved vendor, which essentially acts as a payroll processor on the contractors' behalf – alkalinecoffee Oct 12 '16 at 13:42
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If you are working with a staffing firm, the reality is that if you both can come to agreement then the margin is "enough."

Your future staffing firm will account for whether or not their margin is enough by whether or not they hire you. On the other hand you will only accept a job if your pay is high enough.

How much the difference is matters very little unless you are worried your employer will accidentally hire you at too high of a rate. But keep in mind that your billable rate is normally much higher than the rate you get paid. You should know this if you know how much your staffing agency bills for your time, as you can compare it to your pay.

Evan another $10/hour is likely a small percentage of the total difference between your pay and the billable rate.

Asking for this is awkward. It's generally not your job as a contractor to worry about your staffing agencies profitability - worry about your pay and let those paid to worry about the agency worry about the agency.

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As a contractor all you should be interested in is how much you are making. It would be bad form to ask this question, and it should be possible to find out by other means. But at the end of the day, it's not your business.

If one of my contractors asked me this, I wouldn't tell them, and I might well just get rid of them. Company financial and business practices are generally on a need to know basis only. That information could be leaked to my competition. Or they might try undercutting and taking my client, or any number of nasty things.

  • This is always slippery slope, in this case that would be internal affairs of the company, as you said yourself, numbers that you don't want anyone to really know. Apart from that, I found talking about finances, both personal and business-wise, is rather in poor taste - even though I do realise this could be a cultural thing for me. Hell, I dont want to know unless it's something that directly impacts me and client actually has to share that kind of info with me for whatever reason. – Cthulhubutt Oct 11 '16 at 12:29
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No, it would not be appropriate, plus they may not even know.

It's complicated.

An employer's margin depends entirely on what rate they receive from the company where you're placed, which is often negotiated after your own deal is complete.

Margin can also include any non-payroll benefits you have, unless you're paid strictly on an hourly basis for actual work completed.

In most cases, companies are looking to pay a fair market wage, to prevent you from jumping immediately to another company.

Your best play is to research your market value (through online listings, meetings with recruiters, conversations with others) in order to put forward the best offer you can negotiate successfully.

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