IR35 - Potential client can't fill perm role

[Hobosapien]

Agree here.

Contractor: Thing is Im worried about my tax so need a rate increase...
Client: Umm sorry don't give a monkeys about your tax situation.

Only a muppet would show their hand like that.

Usually there are other circumstances you can use as an 'excuse' to request a rate increase that may be more sympathetically received, such as the client being based where the hotels are expensive so you need an increase or WFH to continue.

Or just play the 'nothing to lose' card and say you want x extra or you're not renewing. No reason needs to be given. You could even say you found out others are on x rate and you want same. Lots of approaches depending on situation and number of agencies involved at client.

Though these work regardless of IR35 status and real motivations.

[northernladuk]

Strangely I find it easier to negotiate a better rate at renewal when they've seen the value I bring rather than being passed over at interview stage for a cheaper candidate.

Depends on the line of work and how 'irreplaceable' you are perceived to be. Though asking for too much at renewal may be agreed initially due to the risk of losing the resource, but the client may then cull the most expensive first nearer the end of the project life cycle. All part of the game.

Sadly there are a whole host of things wrong with this statement.

Let's assume there is an agent involved here. So renewal comes up, it is extremely uncommon for a client to up their rate. They want to pay say £500 for an experienced contractor that can give them exactly what they want. The value is right there. You shouldn't need to prove it. The client expects it from day one. All you are doing is proving you can do what you were brought in and expected to do. Even if you take on extra responsibilities (forgetting the obvious IR35 issues here) the client won't pay anymore for you. You could try blackmailing them and say pay more or leave but good luck with that. So on the whole the rate increase will not come from the client as you aren't delivering any more.

So the rate increase comes from reducing the agents margin. He doesn't know about or care about your value. He just wants to sign and make commission. You can reduce his cut because he's put the leg work in and made the money he expected. The rest is just profit so he can generally be squeezed. The exception is when they are fixed rate and around 10% or less but it's still possible. If you are any good at negotiation you can get him down to the bare bones to start with. You don't start thinking oh I'll let the agent bum me until I've proved I'm ok and then I'll politely ask for an increase. You go in hard and get what you want and then at renewal squeeze it.

IMO and experience clients rarely cull the most expensive. It's highly likely you are on a fixed rate to them in most cases anyway. Clients generally get rid of resources they don't need. I haven't met a client that is in the business of keeping cheaper resources on projects that delivery financial and business benefits. That's just madness.

You could be talking about direct engagements in which case much of the above isn't true but it's more likely an engagement will be through an agent.

[northernladuk]

Only a muppet would show their hand like that.

Usually there are other circumstances you can use as an 'excuse' to request a rate increase that may be more sympathetically received, such as the client being based where the hotels are expensive so you need an increase or WFH to continue.

Moaning about expensive hotels is even worse! You knew that when you started so should factor it in. Blackmailing a client about your hotel costs is no better. Although I don't like it at least a change in tax status or T&S is a change so could warrant a change in rates. Complaining the hotels you've been in from day one are expensive and using that as an excuse isn't clever.

Or just play the 'nothing to lose' card and say you want x extra or you're not renewing. No reason needs to be given. You could even say you found out others are on x rate and you want same. Lots of approaches depending on situation and number of agencies involved at client.

Though these work regardless of IR35 status and real motivations.

And it's not even a 'nothing to lose' card. It's business. It's not that smart holding your client over a barrel like that but if that's what you want to do at least stick it to them straight without moaning about tax status or hotel prices. Again knowing who you going to get the rate rise out of here is key as mentioned above.

[LondonManc]

Moaning about expensive hotels is even worse! You knew that when you started so should factor it in. Blackmailing a client about your hotel costs is no better. Although I don't like it at least a change in tax status or T&S is a change so could warrant a change in rates. Complaining the hotels you've been in from day one are expensive and using that as an excuse isn't clever.



And it's not even a 'nothing to lose' card. It's business. It's not that smart holding your client over a barrel like that but if that's what you want to do at least stick it to them straight without moaning about tax status or hotel prices. Again knowing who you going to get the rate rise out of here is key as mentioned above.

The two year rule on T&S is a decent reason - multiple projects, same large multinational, same site, different departments, etc.

[Hobosapien]

Yeah ok

I've got better things to do than argue in fantasy land.


Edit: Fair enough, we all have different approaches and some of my 'ideas' haven't been proven on the battleground. I know some of what I wrote is fact though through experience (will leave you to work out which bits are less close to fantasy ), all clients aren't the same.

At the end of the day we're a disposable resource so shouldn't worry too much about the client's feelings, other than to do a good job at what we were contracted for. Negotiation and renewal tactics are pretty much whoever dares wins if you are willing to accept the loss of contract and potentially on bridge burning terms.

[northernladuk]

:t the end of the day we're a disposable resource so shouldn't worry too much about the client's feelings, other than to do a good job at what we were contracted for. Negotiation and renewal tactics are pretty much whoever dares wins if you are willing to accept the loss of contract and potentially on bridge burning terms.

Indeed but understanding exactly who to negotiate with and who's money you are attempting to get the rise from is pretty fundamental.

[MyUserName]

I did a contract for over two years which was originally offered as a perm role but was switched to a contract when I refused it. Sent all of the information to QDOS and they insured me without any hassle (couple of words needed changing in the contract but that was it).

[Hobosapien]

Indeed but understanding exactly who to negotiate with and who's money you are attempting to get the rise from is pretty fundamental.

That seems pretty straight forward in that the client is the one with the money and it's the agency that one negotiates with, but I can see your point about how the agency may be easier to squeeze on margin. Though even they will have a limit on manoeuvrability before they have to go back to the client, as it would be exceptional circumstances for them to agree to zero commission.

I suppose the results depend on the client company. The less well managed or those with a big reward for delivering a project on time may blow the initial budget to get the bigger payoff.

I've seen this where a client had won a government tender worth lots and they were at risk of missing a deadline so all us contractors already on board got all sorts of additional rewards either at renewal time, them agreeing to the higher weekend rate, or simply them providing free pizzas when working longer hours than the norm. They at least had the sense to know that it was better for them to keep us happy than to try to throw more bodies at the problem. We did get the project done in time, though definitely not on their original budget, but they were happy enough. So much so they made several of the contractors permie when the Y2k downturn occurred towards the end of the project and those contractors were worried about the work drying up.

[psychocandy]

I did a contract for over two years which was originally offered as a perm role but was switched to a contract when I refused it. Sent all of the information to QDOS and they insured me without any hassle (couple of words needed changing in the contract but that was it).

Which everyone tends to forget on here....

I've been the same. Contract passed by QDOS. IPSE insurance.

Yes working practices might be iffy and since its BAU it might be iffy too.

Not saying its never going to happen but I dont think many, who have QDOS/IPSE, have been unfortunate.

[northernladuk]

Which everyone tends to forget on here....

I've been the same. Contract passed by QDOS. IPSE insurance.

Yes working practices might be iffy and since its BAU it might be iffy too.

Not saying its never going to happen but I dont think many, who have QDOS/IPSE, have been unfortunate.

Bearing in mind working practices trump the contract do you not think it would be wise to look in to it a little better?