In my experience that’s the opposite: the sweatshops are extracting the most.
I remember early in my career learning from the client I had been posted at for 2 years that they were paying for my expertise 6 times my daily rate. I was furious to say the least; I demanded a 3x raise the next day or threatened to quit, which they could only grant me. 15 years later, I won’t allow these egregious amounts of markup anymore but 2x is routine and I have to swallow it if I want to get any work at all.
Let me be clear: these companies have no role in the day-to-day, just introducing the contractor and just sitting back collecting money with no effort at all. Absolutely disgraceful.
> these companies have no role in the day-to-day, just introducing the contractor and just sitting back collecting money with no effort at all
The company is also responsible for the job getting done if you get hit by a bus or say "Fuck it" and disappear.
But in long-term customer contracts with the same personnel, there should absolutely be a decrease in the gap between billable rate and salary.
If the customer keeps someone around that long: they're working with that person, not the company.
The other legitimate reason for markup (on both sides) is optionality around immediate arbitrary filing. Even in the US / "right to work" states, firing can be messy. Severing contracts is much less messy / quicker.
So some of the premium is for being able to treat contractors like contracts rather than employees/people.
I remember early in my career learning from the client I had been posted at for 2 years that they were paying for my expertise 6 times my daily rate. I was furious to say the least; I demanded a 3x raise the next day or threatened to quit, which they could only grant me. 15 years later, I won’t allow these egregious amounts of markup anymore but 2x is routine and I have to swallow it if I want to get any work at all.
Let me be clear: these companies have no role in the day-to-day, just introducing the contractor and just sitting back collecting money with no effort at all. Absolutely disgraceful.