How to deal with a long term contract extension offer?

[northernladuk]

Your friend needs to get better friends.

[clearedforlanding]

It would depend greatly on his relationship with both the client and the agency. I think that sometimes it is appropriate to show ones cards. If the relationship is good, and he is on amicable terms with the client, then requesting a rate interest based on his performance is possible - it is often appreciated that this is not shown as an ultimatum.

Furthermore a frank and polite discussion with the agent is possible. The agent should realise that he is competing with other agents (unless other factors are at play - read buddies with the hiring manager) and may be flexible by a few percentage points.

At the moment I would not rock the boat and bite the hand off a contract extender. I had a long conversation with the MD of a pretty large agency in my field and he said "CFL, the reality is that contractors are a commodity now, and I anticipate rates are going to drop before March 2019", "We are already seeing rates being negotiated down on long term PSL clients". I just saw a post of his on LinkedIn where he was stating that a number of EU clients and indeed contractors no longer want to work with UK agencies due to that which should not be mentioned.

Competition is fierce and it is going to get worse.

[b0redom]

I doubt that the client is committing to the full term. There is likely to be a termination clause

^-- This. Very early on in my contracting career I was suckered with the - "It's a 12 month contract, so could you lower your rate a touch." 7 months in I got served with 1 week's notice. Your contract is as long as your notice period (and not even always that).

[TonyF]

I doubt that the client is committing to the full term. There is likely to be a termination clause

Counter it with an early termination clause and see how keen the client is to commit to a long-term deal.

[Darren_Test]

Well unless your 'friend' is awash with firm job offers, does he not think 100% of his current day rate is better than 100% of nothing? Some people in the current market would just be happy to have an extension. And in fact one or two agents who have spoken to me suggested people should try and secure an extension rather than move on. Obviously, every individual has to make that decision though.

As always when wanting an increase in day rate, you need to prove your case it is warranted. It may or may not help if your 'friend' gives the impression they will turn down the extension if there is no increase. This is 'made aware' by telling the agent unless your friend is direct in which case, the client's HR needs to be 'made aware.'

Some people say if you ask and dont get, you end up looking like a tit. Im not sure that is the case unless you have really mouthed off about wanting an increase or walking.

Probably more valid query to agent is 'Do you expect me to work with same rate for nearly 2 years..?' ..??

[Darren_Test]

Ahhh you have changed "Employer" to "Client" makes sense now

If it's market rate bite there hand off

1 week on the bench would blow any increase anyway

Sure, not saying No to extension. But nothing wrong in trying! right..?

[Darren_Test]

Could your friend get the employer to sweeten the deal with improved car parking facilities?

Yup, looks like his parking issues are sorted!

[northernladuk]

Probably more valid query to agent is 'Do you expect me to work with same rate for nearly 2 years..?' ..??

Who would say 'Of course, why not?'

[Darren_Test]

1. Why does he think he deserves an increased rate?
2. How much of an increase is he wanting? 1%? 5%? 20%?
3. Does he think the agent will just suck up a reduction in their take without demanding an increase from the client?
4. Have you advised him on how you've got increases in your rate over the last 10 years?

For me short term = higher rate, long term/perm = lower rate.
And for most businesses, if a customer wants to work with a supplier for a a higher volume of business, they are expecting that the supplier will be pleased with the opportunity of the trade arrangement and will reduce their prices to secure the contract, not increase them.

1. ~2 years on same rate, once contract signed
2. Something is better than nothing!
3. Yes, that is the plan. Agent absorbs rather than trouble client!
4. Nope :-)

Contract length is pointless anyway. Most clients can terminate contract with 2 weeks notice if no work.!

[Darren_Test]

It also depends on the relationship with the client.

I have been quite lucky in having good working relationships and have often broached the topic with the hiring manager who holds the budget. They then say whether they have wiggle room or not. Often they have then gone to the agent to change the day rate on the renewal paperwork.

Other times, I have used the agent to negotiate a rate rise but only on gigs where I've been there a year or more. I don't think a 6 month gig, unless you've gone well above and beyond*, warrants a rate rise. If your agent isn't a tw@t, you can ask about the chances of a rate rise.


* waffle about how you shouldn't do stuff that's not in the contracted scope

Not keen to get client involved in this...prefer agent to absorb!