Minimum Contract Rate
This question, about agencies asking about your minimum contract rate is from Bill.
I quoted a rate to an agency. They asked me what my bottom line was although they said they would get me as much as they could. I reluctantly quoted a bottom line and now that I got contract, this is what my rate is.
I suppose that it is possible that this was all that the company could afford, but I have a nagging suspicion that I am losing out over this.
Is it common, Dr. McLaughlin, for agencies to ask this and what should one say when they ask you this?
Dr. McLaughlin‘s Reply
This is fairly common Bill.
So that you understand what is happening, let me give you a scenario.
You‘ve asked the agency for £2,000 a week.
The agency puts you forward at £2,400 a week.
They have asked you what your bottom line is.
You reluctantly say £1,400 as you can‘t afford to miss out on an opportunity, although you know £2,000 is the market rate for your skill.
You go for the interview and get the job. The client wants you.
Paying Contractors for Their Services
Now the agency has to get back and touch with you to tell you that you have got the job.
The agency is willing to pay £2,400 for your services.
The agency knows that you will take £1,400 for doing the job.
He is on commission. The more that he takes from you the more he gets paid.
If he is struggling a little bit to hit targets then this could come as a big bonus to him.
What do you think he would be tempted to do?
You might even do it yourself in the same situation.
Play it Smart
No, this isn‘t the way to play it at all. Tell the agency that £2,000 is your rate but that you might be negotiable depending on the company, the distance to travel, how well you like the people etc. etc. etc.
If he does need to put you in at a rate lower than you want this will encourage him to put you up for the interview still.
Once the client wants you and tells the agency that he or she wants you then you are in a very strong position.
Surefire Commission for Agency
The agency will not let a surefire regular piece of commission go. Even if the client does want to pay less then he may even agree to forego some of his commission.
The answer then Bill is never to quote a bottom rate. As soon as you quote it, it will become the maximum that you will get. Why would they pay you more when you‘ve already told them that you will take less?
You must hold your nerve!
Never give away your minimum contract rate when agencies ask for your bottom line.
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