How to get rate raise from agency..

[Darren_Test]

OK..thanks Guys..

So under what conditions a contractor can expect a rate raise..? - or never expect always demand for it..?

A. During month of January , due to rail fair hike..?
B. During long contract extension..?
C. After 6 months in a contract..?

My current contract extended 6 times 4-5 weeks extension..in that case at what stage I could look for a rate revision..? I took this though rate was low thinking that I could ask for a hike bit later. But due to this 5 weeks extension every time I couldn't so far...

[TheFaQQer]

So under what conditions a contractor can expect a rate raise..? - or never expect always demand for it..?

A. During month of January , due to rail fair hike..?
B. During long contract extension..?
C. After 6 months in a contract..?

I don't think you can ever "expect" a rate rise - you can always ask for one, but never expect it.

The rail fare hike is an irrelevance to the client - if you can't manage your business without being on a wafer-thin margin, then you need to factor that in at the start of the contract.

I don't see why length of contract has anything to do with it. You could argue that if you are signing a long-term extension, then you should have an increase because the market might turn out to be better than you planned and you are missing out on other better-paying roles. But that cuts both ways, of course, so the client could easily argue that they think the market will get worse and you should be grateful for what you get.

The best times to ask for an increase (IMO) are:

1) The role is significantly different from the one you originally accepted, and therefore you are working at a different level which normally commands a higher rate.

2) The client needs you, you want to stay, you are turning down better-paid opportunities, and it's extension time.

[northernladuk]

If your agent isn't on a fixed margin and you are really willing to walk you could push his margin after the first renewal or two. He would have taken a rate to make his money in the first duration. If multiple renewals occur he is quids in so it wouldn't be too cheeky to ask him to drop his percentage for the future renewals as it's easy money for him. What you have to remember though is agents deal with contractors asking for more day in day out. Unless you are really willing to stick it to him or walk you would be wasting your time, he will play hardball with you and he will only cave if he genuinely thinks his income could evaporate. A sniff that you are bluffing and you don't have a hope.

This really only works if he is on a pretty good margin so you are only talking a couple of percent here.

[BolshieBastard]

OK..thanks Guys..

So under what conditions a contractor can expect a rate raise..? - or never expect always demand for it..?

A. During month of January , due to rail fair hike..?
B. During long contract extension..?
C. After 6 months in a contract..?

My current contract extended 6 times 4-5 weeks extension..in that case at what stage I could look for a rate revision..? I took this though rate was low thinking that I could ask for a hike bit later. But due to this 5 weeks extension every time I couldn't so far...

Put it this way, if you had negotiated a low price with a builder for an extension how would you react if in the last month of the job he said I want 10% more?

Obviously the situations aren't exactly the same but the principle is.

I once worked at a client for over 3 years. They increased my rate substantially after 12 months. I stayed on that rate for the rest of the contract.

IMHO, contractors shouldn't ask for an increase. Most B2B relationships look to cut costs later in a contract not, increase them. It never ceases to amaze me the number of contractors who say they are a business then act like a permie and expect an annual increase but, hey ho!

Ask for a good rate at the beginning and stick to it.

[NonnyMouse]

"So under what conditions a contractor can expect a rate raise..? - or never expect always demand for it..?"

You can never ever expect it - only perms expect an annual rate increase. The client's loyalty is to themselves and maximising their profit - they are not going to offer you a rate increase.

You can indeed demand it - and you might well get it, but - you have to be prepared to walk away, e.g. pay me x% more because i am adding this much extra value to the project since i started or i am not signing a renewal, it might go in your favour or it might not.

Don't believe your irreplaceable though, in over 15 years i have never come across a tester who is.

[CheeseSlice]

I hate trying to get an increased rate and I've never succeeded in it either. I once lost a contract renewal because I threatened to walk and the other side never folded. I felt like I held all of the cards, and whilst I probably did, the clientcos HR was so bureaucratic that they would just let projects fail rather than negotiate to try to retain people. I spent 2 months on the bench after that licking my wounds.

If you're going to do this, you need to really know how strong your hand is, and be confident that the clientco or agent will be able to act on your demands. Passing the additional cost onto clientco is going to require a budgetholder to sign off on the rise. Whilst the PM is praising your efforts and saying how irreplaceable you are they may have to go through HR and have no leverage when it comes to contractor rates.

Why is the project going on another month BTW ? Did the team fail to deliver in time? If that was the reason, asking for more money would be taking the p*ss.

IMO rate negotiations are always easiest when approaching a new contract.

And if you're not happy with the rates you're being offered then you need to up your game, learn skills that command the rates you want, and/or move up the food chain into senior contract roles.

[Darren_Test]

I renewed contract without any hike, didn't raise that with agency..Currently active in market to find next gig.

[SpontaneousOrder]

Put it this way, if you had negotiated a low price with a builder for an extension how would you react if in the last month of the job he said I want 10% more?

Obviously the situations aren't exactly the same but the principle is.

I once worked at a client for over 3 years. They increased my rate substantially after 12 months. I stayed on that rate for the rest of the contract.

IMHO, contractors shouldn't ask for an increase. Most B2B relationships look to cut costs later in a contract not, increase them. It never ceases to amaze me the number of contractors who say they are a business then act like a permie and expect an annual increase but, hey ho!

Ask for a good rate at the beginning and stick to it.

I don't know about you, but I face price hikes every year - mid contract - from my mobile phone contracts, etc. Sounds business like to me - otherwise you'd be being paid fixed price for fixed deliverables.

[GillsMan]

I'm sorry but I completely disagree. I don't understand why you feel you have some sort of weird price loyalty to your client, but frankly its not good business. Or is it just an intrinsic belief that your work has no real value? The longer I'm with a client the more valuable I am to them as I now have a valuable skill set combined with good knowledge of their business. In addition I like to think that I've also added good value to the business. With these three things combined I feel completely justified in asking for a rate rise.

Wrong. It can be good business. Some contractors make me laugh with their insular beliefs that their way is good business and therefore all other ways must be bad business.

Your argument as to why you ask for rate increases is well-thought out and compelling. And I've no doubt it works for you and others. It's good business. But equally, not asking for rate increases can be good business for reasons almost too obvious to point out: a price loyalty with your client helps bring a sense of loyalty for both parties. I've done ad hoc work for four of my clients after contracting with them (and I've only been in business a shade over four years), and one of the reasons they come back to me is that I don't 'nickel and dime' them. I'm fair with pricing, I'm fair with billing, I don't ask for rate increases the moment I know they're not in a position to say no and my clients respect that.

That has led to them being perfectly happy for me to operate how I want, with no requirements to go into the office - even at Barclays and BP, I was on site probably <10% of my time at each client. This enabled me to do multiple contracts at the same time, build a growing reputation, and so in four years I've gone from being a contractor to owning a business that is now made up of four full time permanent staff (including me), and is based out of on office and doing quite nicely at the moment.

So don't tell me that not asking for a rate increase is "bad business". Bad business is believing that there is only one approach to business.

[LondonManc]

I'm sorry but I completely disagree. I don't understand why you feel you have some sort of weird price loyalty to your client, but frankly its not good business. Or is it just an intrinsic belief that your work has no real value? The longer I'm with a client the more valuable I am to them as I now have a valuable skill set combined with good knowledge of their business. In addition I like to think that I've also added good value to the business. With these three things combined I feel completely justified in asking for a rate rise.

If I negotiated a six month contract with a builder and at the end of it, then asked him to do something else and his labour rate went up by 10% I would either accept it or go out and quote with someone else. The fact that I felt his work was good enough that I would want him back would probably mean that I wouldn't care about the 10% increase.

Spot on. I think this is the positive of being a contractor over a consultancy - they have better termination clauses and can get battered for rate whereas we make ourselves more useful to the client (rather than selling more days we earn them) and as such our worth increases.