The majority of training companies use 'associate trainers' for training delivery. I'll explain what I mean by this. an associate is not a salaried employee, they work on a freelance basis for the training provider.
If a training provider is using an associate to deliver training, what proportion of the training delivery day-rate do you think the associate trainer should receive?
John Giddings
14 Responses
The game of associate chess
Are associates being ripped off?
Probably, I’ve known some consultancies charge £800 per day and pay the trainer £200.
I’ve also known consultancies advertise contract positions when they actually havent won the business, then advertise for associcates and use the supplied CV’s in their bid.
Then there is the issue of liability and copyright (particularly if its a design orientated piece of work), this cost is also expected to be absorbed by the associate.
In their defence they did win the contract – although often this is little more than a handshake between client and preferred supplier.
From my point of view as a freelancer/associate – I simply say no if its too low, too much bother or if the contract looks as if I might be exploited eg. meetings after 6pm, not paid for preparation, risk of client stealing my materials etc.
As for what the Associate should receive – well I dont feel able to comment, some consultancies are exploitative, some admittedly have put some work in.
PS. I think we might know each other from Old St/Kingston??
Ripped off or just business?
This is a sensitive area for a lot of us.
Before sharing my views lets look at WHY trainers do work as associates:
The job is sold for us (we don’t need to do the pitch & client liason)
We do not have enough contacts to supply us with the work load we require/ desire.
The question is – as associates do we fully understand the cost of sale with some of these organisations?
For example I have just been involved in a proposal for a piece of work of value £15K. So far it has taken 2 days for meetings and 1 day to put the proiposal tofgether plus another day to present.
At the end of the project there will need to be a follow-up.
If as an associate we get paid a rate that we can accept – just turn up & deliver or paid for ALL meetings and pre-work then that is fine.
The difference for me is that as an associate I will expect payment for ALL time – as a direct contractor I will/ can only charge for delivery time.
It is the difference bewteen the two that is difficult.
What also makes it hard for some associate groups is when the trainer then approaches/ works with the client directly without the cost of sale and does work at a lower rate. Unfortunatly this is creating market expectations of un-sustainably low day rates.
One exception to this is where I was approached by a user of this forum for delivery only work. We had a telephone call, a short meeting with the internal client then a contract. The agreed rate was lower than my normal rate as effectivly the client bought without additional cost of sale. (if only more clients would work this way – win-win!)
So what proportion?
I would say 50/50 providing the trainers costs are covered.
One group I work with charge only 20% BUT they expect a % of on sales from other associates – this is not just an association of trainers but business advisors – marketing, finance, OD etc.
Mike Morrison
depends on what sort of consultancy you are!
We use a number of associates, and we pay them what they would expect to be paid, often only taking a 10 per cent “cut”. Having said that, we work with people we’ve worked with before in other lives, and who we know and trust. In addition, however, because of this, we would not expect to pay them for new business development (either taking part in the pitch or the development of the proposal). It is worth pointing out that if it requires our associates to put in all the intellectual effort to develop the proposal, we might not be pitching for the business in any case.
undoubtedly someone somewhere is being ripped off …
…but that isn’t necessarily the whole picture.
It all depends on what each party is bringing to the table and who is carrying the risks.
So long as we are open and honest and professional and honourable then no one os being ripped off.
As soon as you FEEL you are being ripped off SAY something. If that doesn’t work, DO something; in my 18 years as a freelance associate I’ve had a couple of occasions where I felt I was being ripped off. On one occasion I just stopped working with them and on the other I sued them. The action allowed me to achieve closure with my principles intact and the ability to move on to newer better associateships.
If you want to chat give me a call
Rus
Ripped off?
In that case, given an associate is paid a day rate of say, £170 for a Project 2000 course, what percentage on top of that would an agency be charging?
This is a particular bone of contention for me as I know of an agency who pays consistently low rates to the trainers, but has accidentally let slip that they receive far more than is being paid out to me….and also accepts work without establishing any T&Cs so that if anything goes wrong, I don’t get paid.
It makes it difficult for me to know exactly how to price when people approach me directly for work.
Are associates getting ripped off
Hi
Put it this way. I recently had a consultancy quote me £1500 a day for delivering an internally designed programme. They were going to uses associates who I know are paid in the region of £250 per day. Needless to say we took the business elsewhere.
I don’t think it’s just associates that are getting ripped off!
So what is fair associate markup?
Paula,
you say
“given an associate is paid a day rate of say, £170 for a Project 2000 course, what percentage on top of that would an agency be charging?”
Does it matter? It is they – not you that has closed the sale. It’s about the associate company having a sustainable business model.
Do we ask Tesco what they paid for a product we are buying to see if it is a fair mark-up?
You also ask…
“It makes it difficult for me to know exactly how to price when people approach me directly for work.”
For me this is easy:
My target is 100 income generating days per year, set youself your income target & divide by 100.
The additional days are for marketing, accounts, updating etc.
If you are being given “work on a plate” and you are getting a rate you are happy with does it matter? If you are not happy then change the arrangment.
As for T&C – you should have a T&C with the group of associates irrespective of the relationahip with the ‘end user’ These T&C’s protect YOU.
Make sure that your contract is with the associate group NOT the end client.
Hope this is of use to you
Mike
Clients also ripped off?
Bridget, in this case I think you are correct – if there is no risk for an associate group than this seems a little extravagant to say the least.
Certainly when I am working directly for a client where I am being asked to deliver in-house material I for one, charge a sensible lower rate. (more than 20 days – its about volume & leverage)
It would be interesting for the professional bodies started a set of standards for associate organisation to work to.
Mike
It takes a day…
Broadly speaking, it takes a day to sell a day; hence a reasonable target for income-generating days is 100 days, (allowing for for your hols, their hols, public hols etc. there are roughly 200 working days a year). So, if the fee-earning day is sub-contracted out, the principal has an argument for keeping 50% of the fee and the trainer, who hasn’t had the marketing costs, should be prepared to give up 50% of their ‘normal’ fee. Larger organisations may feel they should keep more to allow for more expensive overheads – but this should have been reflected in their pricing in the first place. The trainer feels they are doing all the work so should get a larger proportion than 50% – but presumably they wouldn’t have got the work on their own. (Let’s face it, selling skills in the training community are not of the highest order.)
Personally, I err on the side of the angels and keep 40% of the gross. I want my freelancers to be happy; not to rip my client off me but to have a good relationship with them, as it fosters my ultimate relationship with the client; and it maked the freelancer happy to continue working with me.
And anyway, I enjoy sitting in my home office, or going out selling, when someone else is making money for me!
Jonathan Sindall
Associate fees
I work as an associate for just one company – they charge a similar daily rate to the one I use for my own jobs and take 37.5%.
This seems very reasonable to me as they do all the touting for business, contract negotiation, taking bookings, organising and paying for venue hire and catering etc. All I have to do is turn up and deliver and write a brief report on the session.
As the delivery is what I like doing best and all the other stuff is what I least enjoy – I’d be more than happy to pay 37.5% of my fee for someone to do that work on my other jobs too.
The instance you quoted where the contractor was charging £1500 and paying the sub-contractor a good deal less – yes it doesn’t sound very equitable – but you have to ask yourself, how much work was involved in setting up the job. Maybe they were ripping their associates off – or maybe the associates aren’t fully aware of the amount of work that fee covered in addition to their own contribution.
My advice is only work for organisations where there is trust and mutual respect – and ideally friendship involved.
It depends
It all depends on who:
– sells the work, and how much of the selling is done by the person who does it …
– manages the work, maintains contact with the client, handles the administration, billing, collection …
– provides the training material, case studies, overheads …
– carries the can if the job goes wrong …
But in general, marketing and selling the job costs about 30% of the price. This is generally true in the professions: as accountants say, there are finders, minders, and grinders. Having done consultancy on management consultancies and accountancy practices I have found this to be a fair generalisation. And as a management consultant for over 40 years, the figure of 100 fee days a year is pretty good too.
Does it matter?
Mike, you asked “Does it matter?”
well, as far as I’m concerned, the simple answer is “yes.”
I’m learning how to be a contractor, how to price, how not to be ripped off, what is expected of me, what I should be able to expect from agencies. I’m trying to build up good working relationships, and am mostly succeeding in that.
However, there are some agencies out there who are slightly less than scrupulous in their dealings with me; one who, when a close family member died, and I rang to let him know I would not be able to cover a course, threatened me with no future work and witholding of payment for jobs already done.
This is the same agent who has no T&Cs…and I’ve had the argument that my contract is with him and not the client to no avail.
So yes, it matters. I’m trying to provide a good service, and to that end need to know what this service ought to be worth.
Are you being ripped off?
What an interesting discussion. What strikes me is that as a freelance consultant I have the benefit of being able to choose who I work for. I really don’t care what percentage training providers take, however I do expect a fair rate for my services and it is my responsibility to secure that rate or decline the offer. It is very difficult to identify a day rate, no two jobs are the same, sometimes it’s comfortable to take a reduced rate to deliver the same course on a repeat basis because there is little preparation, little risk and enhanced security for the consultant.
On other occasions the market dictates the rate,for example public course delivery work in Dubai has a rate which is set by the market, where as USAID work in the Middle East which is funded attracts a much higher rate because the rate is calculated on average earnings. Direct work for a client is attractive because you learn so much about that industry and hopefully become an asset to the organisation, therefore the agreed rate should be fair to both parties and competetive enough to secure repeat work and develop the relationship. I would never bite the hand that feeds me, although all too often when working as an associate clients will approach me to go direct, usually because of excessive rates, usually this is an indicator that the training provider is on the way out of that organisation – everyone looses!
If you are being ripped off, then it’s your choice whether you are available to work for that organisation or not,before you make that choice you should consider the sales, marketing, travel arrangements, printing, accommodation, that the organisation provides on your behalf and if the rate is still unsatisfactory make the decision to move on.
There’s more…
Something else you may wish to think about in terms of associate work and fees.
If your normal rate is for arguments sake £1000 per day with you doing everything, and you are getting work at this rate, then the market is basically valuing you at this rate.
Let’s look at a couple of scenarios..
(1) You take on associate work and accept a fee of £600 per day, you don’t have any selling etc to do. The company that has provided this work charges you out at £1000 per day. To the market, you are still valued the same.
(2) As for (1) except that the company charges you out at £800 per day. Arern’t you now being undervalued if you’re not careful? If you were to do too many days at this lower rate, your brand may suffer.
Food for thought?
Further, I’d suggest that you insist that any organisation offering you associate work tell you what you are being charged out at, so you can seek to avoid the above trap. If they refuse to do so, then I’d suggest you think twice about working with them.
Oh, and be clear about 2 things:
1 – the minimum amount of money in pounds that you will work for per day (this is the practical element), and
2 – the minimum percentage you’ll work for (this is the emotional element)
This way you can avoid any creeping gripes about being ripped off.
And if the provider charges you out at more than your normal rate – think about raising it!!
Best wishes,
Martin