Contract Rate Rise – Tips for getting a Good Rate

Contract Rate Rise for Contractors
Contract Rate Rise for Contractors

Contract Rate Rise

Here are some tips on how to get a good contract rate rise.

1 Don‘t quote a rate until you have to. If pressured, say that it depends on location, hours worked, skills learned etc.

2 Even when you have to quote a rate, e.g. when the agent is sending your CV out, quote a range. The bottom of which would be inside the agents rate for the job. Say you‘ll be easy to deal with.

3 Once they’ve offered you the job, remember that you have the whip hand in terms of negotiating power.

The employer wants only one result from this, i.e. that their first choice takes the job. They don‘t like 2nd choices nearly as much.

The agent wants only one result – that you take the job.

The second choice may not be through them. Always ask for extra, further up your range at this stage. If the company doesn‘t cough up, the agency will.

Other Contract Job Interviews

4 If you have other job interviews to go to, but the agent wants to tie it up that day, dispute terms in the contract to buy more time for other interviews.

5 If you get a better offer elsewhere, don‘t just turn down the first job. Quote a silly rate to the first agent. You might just get it.

6 While buying time to go for other interviews, avoid the first agent by going out a lot.

Contract Rate Rise At Renewal Time

1 Work hard for the 1st month to get yourself a good reputation. It will be difficult to change any reputation you get then. A good reputation will be good for contract renewal negotiations.

2 Keep you boss ‘sweet‘ during the contract. Take him or her out a couple of weeks before renewal comes up. This is done often by other small businesses, and the agency will have done so. Not enough of this is done by contractors.

3 Find out the agency‘s rate from your boss, or whoever is responsible for your renewal. If he or she won‘t give you that information (and they usually will), you can get it from the secretary.

Rate Rise from Company and Agency

4 Make sure that you get something from both the company and the agency.

5 Always turn down the first offer, as this will only be money offered by the company and not the agency.

You are in an even stronger position with the agent than you were originally. When working out what to ask for at renewal time, the equation is, ‘What you think the company can afford + plus what you think the agency can afford + a little bit extra which you can remove later to show reasonableness and good faith’,

Contract Rate Rise – Keep Client Informed

6 Once the company has made an offer, but the agent hasn‘t given, keep your client informed that you will be staying. Say that you are in negotiation with the agent, and to ignore anything that the agency might say.

7 If, in your previous discussion with your boss, you discover that there is plenty of work, and that they‘ll probably need you for several years, try to buy out your contract from your agency.

It happens when companies want contractors to go permanent, so why not when contractors get a chance of a long contract.

If the agency has a permanent division, find out what percentage they charge for a placement. It will be 15-20% of the first year‘s salary.

A lump sum is often preferable to an agency. That’s because this year‘s figures are far more important than next year‘s or the year after‘s.

8 If you are able to get a long contract without the agency‘s involvement, try, as part of the negotiation, to get your company to put you on the Preferred Supplier‘s list when other people are being hired. You might just be sitting on a goldmine here.

Don‘t Think the Agent Represents You

1 Don‘t ever think that the agent represents you. The term is a misnomer. The agent is far more interested in the clients and getting future business from them.

When getting a contract originally, the agent will be happy to put you in at as low a rate as possible to get the business, and will be happy to get you renewed for no increase to keep the client happy.

2 If you haven‘t done a great job, and you aren‘t ‘˜well in‘ with your boss, don‘t try this, as you should be happy just to take a renewal

3 Even if you have made a good impression, don‘t get greedy and overplay your hand

4 Don‘t be inflexible in negotiations. If things look as if they‘re going against you, be prepared to back down rather than lose your job

5 Don‘t tell everybody else what you‘re doing, as they‘ll all try it on, and you‘ll get the reputation as a troublemaker

6 Keep negotiations professional. Don‘t fall out with either the client or the agency. Take the agent out afterwards, as you don‘t want to leave him or her with a bad taste in the mouth.

It is also much appreciated as contractors seldom do it, and it doesn‘t cost that much in relation to any rises that you have obtained.

If you want a good contract rate rise, just follow the steps above.

For more crucial advice on getting an excellent contract rate click on Getting a Better Rate.

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For all critical IR35 news and advice for contractors click on IR35 News.

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