Rate Increase
Preparation is everything. Don’t just go into any contract renewal negotiations with your client, whether directly, or through your agent (it is best direct with the client) without making sure that you have better arguments for why you should get a rate increase than he or she has for why you shouldn’t.
Here’s a few reasons to give t get a rate increase.
1. You are more experienced in their technical environment
than when you started and so are now more valuable to them. You can say that the technical working environment at every company is different and it takes a little while to get up to speed and that if they replaced you with another contractor that learning process would have to start all over again
2. You have a greater knowledge of their systems.
The same applies here.
3. You have greater knowledge of their business.
The same applies here again.
4. You have a good working relationship with their Business Users.
It is important for the IT department that their Business Users have a good working relationship with those working in the IT department.
This is a great asset to them and especially to the person running the IT department as the Business Users are his or her main customers.
Those running the IT Department don’t want some loose cannon (and there are plenty of those in IT) coming in and wrecking the relationship and reflecting badly on their department.
5. You have a good working relationship with other project members
including permanent members of staff.
If that is true then that all helps to gel a team. It is an asset to a team and bringing in someone new to replace you is a bit of an unknown quantity.
6. Because you are up to speed your productivity will be even greater from now on.
Anyone else coming in now is likely to be much less productive than you until they get up to speed (which could take months) and therefore you are more valuable to the company than a newcomer, who would presumably come in at a similar rate to that which you’re on now. So, you deserve a rate increase.
7. A survey of companies showed that the best Return On Investment
that companies can get is to spend money on IT.
The survey showed that for every £1 spent on IT there is an ROI of £4. Therefore you are well worth it.
Although you are paid more than their employees, you are more experienced and more productive. So you deserve a rate increase.
8. Because of the squeeze on the market
due to the equilibrium between the number of IT Contractors available and the number of IT Contracts on offer, you can say that most of the best IT Contractors are now working and they would be taking a chance replacing you with someone who has not been able to find a contract yet.
It stands to reason that the average ability of those who are currently working would be higher than the average of those who are not working.
I’m only talking about averages here and not individuals. Use this to get a rate increase.
9. Inflation
If you are earning 2 grand a week and inflation is only 2%, that is still worth 20 quid extra after a six month contract (or 40 quid after a year-long one).
If you are not compensated for that then you are, in effect working for 20 quid less a week than you were when you started the previous six month contract, even though you are now more valuable to the company.
Is that fair?
10. Increasing Market Rates
The rate for doing your jobs, in most times, will almost certainly be higher than it was 3 or 6 months back.
Try to get some figures on the difference in rates between now and then, e.g. by looking at Jobstats.
Again calculate what rate increase you need to get just to keep apace with market rates.
You are effectively taking a pay cut of that amount if you get no rate increase at renewal time.
Be Prepared
So, to sum up, go prepared next time you are negotiating your renewal and are looking for a rate increase.
When they ask you why you want more don’t just say ‘because I think I’m worth it’.
Come armed with a few arguments that would be difficult to refute, e.g. that you are now far more valuable to them than you were three or six months ago and that market rates have risen.
It’s always easier to get what you want when you win the argument.
Value of Your Skills
Most people have some sense of fair play and they would have to concede that you are more valuable to them now, and that someone of your skills now costs more than they would have done 3 or 6 months ago.
It still may not get you a rise, e.g. when there is no more budget, but it is far more likely to happen than if you go into the discussion without any good arguments.
Good Luck!
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