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Renewal & rate increase advice

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    Renewal & rate increase advice

    Hi all

    I have been contracting direct for the same & first client for over 2 years now (was previously perm with them), 6 month contracts which have always been renewed. I am a C# WPF dev - 8 years experience.

    Started contracting as I moved to Asia because my partner had a good job opportunity here. First 6 months I was on a very low day rate (£150) Due to working fully remote & the time difference to the UK I felt that I had to dangle a carrot to get the client to initially commit.

    After renewal I negotiated a whopping £200 per day and have been on this rate ever since. I now have a bit of war chest (£10k bank & 15k invested) and getting a bit bored of the work. Also obviously at least for now the remote working situation is no longer relevant. I am considering attempting to negotiate £300 per day if they offer renewal (Still considerably under market rate)

    If they refuse I will have to be prepared to walk and would be happy to have a couple of months on the bench which will give me an opportunity to upskill & maybe investigate a plan B. However there are very few domestic opportunities here so I would have to rely on finding a fully remote gig (Or mostly remote If I managed to find something in Singapore/Hong Kong etc.)

    So in my position what would you do? Continue to work on a significantly reduced rate happy to have work or attempt to negotiate closer to what I think I'm worth relative to market rate & don't worry too much if It falls through?


    #2
    Start looking for work on upwork or elsewhere now as you need to build up your reputation there regardless.

    merely at clientco for the entertainment

    Comment


      #3
      Agreed, need to start to spend some time on looking after my interests, I tend to work very hard for the client leaving me with no time/brain power to spend on upskilling & staying current with the job market.

      Comment


        #4
        If the client is aware of market rates, and especially if there are other contractors working onsite at those rates, that should make the negotiation go more smoothly.

        Apart from the anchoring principle (the client has it in their head that you are worth x and now you are asking unreasonably for 1.5x) the manager may be reluctant to ask for more budget for an existing resource, as this may suggest poor negotiating skills to his own manager. After 2 years hopefully you will have banked "good will" with the client, and be able to be open with them.

        In the past I've struggled to negotiate even a minimum rate increase, even when it was agreed that I was doing an identical job to a peer on a higher rate. That lower rate could be the new normal with the client, or the reason you got the job in the first place compared with another candidate.

        Realistically, you will need more leverage to show the client you have nothing to lose, and that means having other job offers.

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          #5
          Great, thanks for the advice

          Yes the client is aware of market rates but there is (I assume this is quite common) some anti-contractor sentiment within the department which is not discouraged by management. However they are 'forced' to use contractors as they cannot successfully recruit perms with the right skills & don't offer enough money.

          Recently departed contractor colleague told me that the go-to rate has been £420 per day.

          Based on the fact that some of those guys are more experienced than myself & they are physically based in the UK, I thought that £300 would be reasonable.

          Comment


            #6
            Personally I would do what I always do. Negotiate, get as close to what I want as I can. If it's not close enough, still accept it but look for new opportunities.

            I know the rate you're on is low, but you've been okay living on it so far and have been able to pay the bills so what will be another 3-12 months while you look for something new.

            Also it's a good skill to be able to negotiate without burning bridges and making ultimatums. Be positive, be happy, compliment the company and the person. If you can get them to agree the market rate, then you can work a plan out with them to get you up to the market rate whether that's all in one go or in steps.
            Last edited by jayn200; 25 February 2021, 09:20.

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              #7
              Personally I'd be fully focussed on upskilling. I find it very hard to believe they'll up you from 200 to 300 if they only offered you 50 last time so reaslistic expectations you'll be on another 50 at best. They obviously see you as their cheap resource so they won't be upping you to anywhere near market rates if that's how you've bene tagged.

              That's also still low in the contracting game. I'd be looking longer term to get skilled to the 420 rate and then go smash that for the rest of your career. Taking six months to a year in a perm job getting that state will pay dividends (literally) for the rest of your contracting career. It could also offer new opportunities you've not thought about. Staying where you are is going to leave you a drone for many years to come.

              I'd also argue you aren't really a contractor either, you are just acting like one. You've been perm and now contract with the same employer/client. You've no experience and won't look like a contractor on paper. No soft skills that valuable contractors have. You've just changed the way you pay.

              I'd be out of there like a shot, skill up and become a proper contractor.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Originally posted by northernladuk View Post
                Personally I'd be fully focussed on upskilling. I find it very hard to believe they'll up you from 200 to 300 if they only offered you 50 last time so reaslistic expectations you'll be on another 50 at best. They obviously see you as their cheap resource so they won't be upping you to anywhere near market rates if that's how you've bene tagged.

                That's also still low in the contracting game. I'd be looking longer term to get skilled to the 420 rate and then go smash that for the rest of your career. Taking six months to a year in a perm job getting that state will pay dividends (literally) for the rest of your contracting career. It could also offer new opportunities you've not thought about. Staying where you are is going to leave you a drone for many years to come.

                I'd also argue you aren't really a contractor either, you are just acting like one. You've been perm and now contract with the same employer/client. You've no experience and won't look like a contractor on paper. No soft skills that valuable contractors have. You've just changed the way you pay.

                I'd be out of there like a shot, skill up and become a proper contractor.
                Understood. I am currently based in SEA so unfortunately cannot simply pick & choose from a plethora of jobs. With regards to being a 'Drone', I am arguably as skilled as some of the other contractors, it's more my location & the associated time zone difference which has driven my low rate although I agree that I have almost certainly been renewed due to cost saving. I work in a very technical engineering discipline within a very skilled agile team writing industry leading software so there are much worse places to be regarding not continuing to learn although I would like to upskill in a new technology or two if I had the time. They didn't offer a maximum £50 increase, I asked for that increase & they agreed without issue, sorry if I didn't communicate that clearly.
                Last edited by Hardgraft; 25 February 2021, 12:02.

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                  #9
                  If you want a raise, you have to talk in terms the client will understand. Churning out the same old same old isn't it, you have to highlight to them the added value you are now bringing - faster turnaround and lower errors since you now know the company in depth, for instance. Asking for money because that's what everyone else gets is only demonstrating how much you are saving them.

                  Otherwise I agree with the rest - upskilling to widen your marketability is key.
                  Blog? What blog...?

                  Comment


                    #10
                    Originally posted by Hardgraft View Post
                    I am considering attempting to negotiate £300 per day if they offer renewal (Still considerably under market rate)
                    Does your client engage other contractors at or near market rates?

                    Or are they just engaging with you because you are offering them a good deal.



                    Last edited by Fraidycat; 25 February 2021, 12:28.

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