Contractor Worth. How can I find out what I’m worth as an IT Contractor

Contractor Worth
Contractor Worth - what should you charge?

Contractor Worth

This is an article about contractor worth.

Clients tend to look upon IT Contractors as about the same worth when it comes to rates.

If two freelancers have the same skills and experience then they tend to pay them more or less the same rate provided they both passed the interview.

However, there are vast differences in productivity.

IT Contractor Daily Rate
IT Contractor Daily Rate and what it entails

Productive IT Developers

A study by DeMarco once showed that of IT Developers those in the Upper Quartile were 10 times as productive as those in the bottom quartile.

That‘s an amazing difference in productivity. However, we all know that there is a major difference between someone who is really good and doesn‘t make mistakes compared to someone who produces bad code which is expensive to fix.

However, clients are never going to pay 5 to 10 times the rate for a good contractor than they would pay a lower quartile one.

Setting Your Rate

Having said all that, probably the best place to start as regards your contractor worth and setting your rate is concerned is ITJobsWatch

If you are a developer in the banking arena you will see that Developers get an average of £400 a day. However, IT Contractors who work in Banking get an average of £488 a day.

good rates from a contract
Good Rates – How to get them from a contract

Of course that figure is an average for developers, analysts, project managers, architects etc. But you now have a range.

Wanting the Contract

It all depends how much you want the contract.

If you went in at £400 for a job as a banking developer you would be highly competitive.

If you went in at £535 you might be on the high side for a developer there.

You might be able to justify that with your experience – or you may be very good at interviews.

Average Developer Rate

Looking at those figures my best guess would be that the average developer in the banking arena might get in the range of £450 to £525.

If you are good I would go in at the high end.

If you are, like most of us, just average, it would make sense to go in at the lower figure.

Contractor Road to Riches
Contractor Road to Riches – being a success as an IT Contractor

Successful IT Contractors

Of course, it is always good to get as much money as you can. However, some of the most successful contractors are those who stay constantly below the market rate.

These contractors tend to stay working, as long as they are OK at their jobs. As we all know the most important thing for a contractor is to be in work.

Someone who is on one of the lower rates for contractors at a company is less likely to be got rid of when they cut the numbers of contractors later on in a project.

Good Contractors

Of course, there are those contractors who are very, very good who can both command a great rate and stay at a company for a long time.

Even so, most of them didn‘t go into a company at a premium rate but managed to get their rates lifted as they became indispensible to a company.

You need to have a good idea of your abilities though before you set your rate.

Contractor Success and Failure

The IT Contractors that succeed are those on high rates who are very good and those on low rates who are just average.

Those who tend to fail are those IT Contractors who are good at negotiating and get themselves a high rate but are only average.

Successful IT Contractor
Becoing a Successful IT Contractor

They are usually the first to go when clients are cutting back on contractor numbers and these contractors spend large amounts of time on the bench between contracts using up the good money they earned when in work.

Negotiating Rates

When contractors are setting or negotiating their rates they need to be brutally frank with themselves as to their abilities.

Once they know themselves they can set a plan on how to be a successful contractor.

Negotiating high rates if you are an average contractor is a recipe for failure.

You would be much more successful by taking a lower rate – and it doesn‘t need to be that much lower.

Know your contractor worth and charge what you are worth!

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