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Increase Day Rate

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    #11
    1 year of living increases is not enough to push day rates up. That's permie thinking. You are on £500 a day!!!! You are in the top 1% of earners in the country. Complaining about cost of living increases on that kind of money is, erm, well... not gonna make you look very good. Rates in contracting have been about the same for 15 years that I know of. They used to be a lot higher in the hey day but it's pretty level now.

    But lets discuss rises in general.

    There are two places where your rate can increase. The clients charge card paid to the agency or the money the agency pays you.
    Looking at the client it is VERY unlikely they'll change the card. You aren't delivering any more than you did in day one and conversely you are now familiar with the environment so could be delivering the same stuff quicker so not uncommon for clients to ask for rate reductions from suppliers in some cases. Thankfully that doesn't happen in contracting but just trying to get you in to the mindset of the client. So chances of increasing your rate from the client? Next to none.

    The other area is the agency margin. They can be taking anything from 7% to 25% plus out of the clients rate. This is to cover the time and effort they put in to finding you etc. Once you've been their 6 months that's covered and their only outgoing is babysitting you. Perfect argument there that their commission can drop and this is where 99% of rate rises come from. You need to know what the agency is taking. You can often find out what the client is paying from project paperwork, lose lips and even the client mailing everyones rate to all contractors (yes really!! happened at one client I was at. Very messy). You've already mentioned the agency is on a fixed margin so that kills this area dead. Very unlikely you can squeeze their margin. It's likely they will be on sub 10% rate. Do the maths. Is 10% of their cut really worth rocking the boat anyway?

    If you still want to go ahead and try some good points already mentioned, particularly about strong arming the agency. They will not give up their money if you ask for it. You've got to make it clear it's in their interest to keep you happy. Advise them what you want at next renewal, they may say OK and off you go on the new rate but more likely they will say no and you've got to say no thanks then goodbye. If you aren't willing to walk then don't bother. Agents do this day in day out. If they had a pound for every limp wristed attempt at a threat they'd all have two Bentleys each not just one. They will play who blinks first and 99.999% of the time it's you. If you are gonna go in and ask for 20 quid a day more when they are only taking, what £55 or something. Do you think that's gonna work?

    As mentioned before, whatever you do, when negotiating a rise please please please do not mention the cost of living as an excuse. It will make you look like a proper tosser which is going to have exactly the opposite affect. That is permie thinking anyway and if you really think you need a rise because of a few percent in cost of living you need to think about your approach to contracting. You are running a business. If you are bothered about the cost of living then pay yourself more or take a bigger divi. That is not the client or agents problem. Your issue is the cost of doing business but again mentioning individual tax values when we get advantages working through LTD's isn't going to sit well with the perm agent on sub £30k + OTE a year.

    In your case I think you are stuffed. Have the chat, push it as far as you dare for experience but don't expect anything from this. You need an agent that's not on a fixed margin to squeeze some more money out of them but I have to say, on £500 a day with all the benefits of working from home that we now with an agent on fixed margin you'd be mad to start rocking the boat.

    Out of interest. When you say niche to the project, does that mean you have a niche skill or you have just picked up a role that's important for this project. The first is useful, the second isn't really. Everyone is replaceable so don't get too complacent that you think you are key to the project. I think we've all seen people leave projects that really are absolutely key and it's got rocky but its survived. What is it you are doing for this project?
    'CUK forum personality of 2011 - Winner - Yes really!!!!

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      #12
      Originally posted by GigiBronz View Post

      well I assumed he is a developer, 1-2 languages, some seniority. 5-10y experience.

      yup £750 is fair game in this market.
      If he was that he wouldn't be asking this question IMO.

      I can't see one shred of evidence that leads you to that conclusion. The only thing the OP mentions is being niche to that project. Someone with no skills that carries out a role in a project can think they are niche as they are the only one doing that role but we know that's not true. Niche skills and niche to a project are two very different things.

      And your rate expectations... £150 to £250 on a £500 level role. You are off your rocker.
      Last edited by northernladuk; 17 February 2022, 10:50.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

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        #13
        I wouldn't listen to corporate stooges around here putting you down.
        that 1% is bulltulip. £500pd outside is about £6k net. that is tulip for a contractor living and working in S/SE UK. that is all you need to know.

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          #14
          Thanks everyone for your thoughts. I guess I wont be asking for an increase. I'd rather finish this project than take on a different one at higher rate.

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            #15
            I'd put another slant on this. For the outside LTD guys we're running a business. Pretty much any commercial contract I've ever seen has a clause stating increases due to inflation each year are expected. Why would you be any different. Inflation is a very real issue at the moment. Not at least trying for an increase is accepting an actual rate decrease. Thats not good business to me!

            In my experience when I've been on a contract that lasts a bit longer than I'd like I have stated to my client that I will be increasing my rate by x% this year and the 2 times I've done this I've had the increase agreed.

            Why would you all not be puching for this when inflation is eroding your rate rapidly?

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              #16
              Originally posted by pjt View Post
              I'd put another slant on this. For the outside LTD guys we're running a business. Pretty much any commercial contract I've ever seen has a clause stating increases due to inflation each year are expected. Why would you be any different. Inflation is a very real issue at the moment. Not at least trying for an increase is accepting an actual rate decrease. Thats not good business to me!

              In my experience when I've been on a contract that lasts a bit longer than I'd like I have stated to my client that I will be increasing my rate by x% this year and the 2 times I've done this I've had the increase agreed.

              Why would you all not be puching for this when inflation is eroding your rate rapidly?
              I've also seen contracts where a year on year decrease in rate is required from the supplier as their efficiency increases. Mainly in the public sector to be fair but not exclusively. We wouldn't want that. We can't pick the ones we want and ignore the ones we don't. The rough comes with the smooth.

              Not a bad thing to state the increase as you did and give it a go but the OP needs an understanding of the players, who's paying, who's taking what cut and then come to a decision. Im a mid level role in a long project at a largish client with an agency on fixed commission is not a good place to be asking for rises generally.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

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                #17
                Originally posted by GigiBronz View Post

                well I assumed he is a developer, 1-2 languages, some seniority. 5-10y experience.

                yup £750 is fair game in this market.
                It really isn't if you are currently on £500.

                Some people may be getting high rates but for the rest £500-600pd is pretty standard outside of London/FS

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                  #18
                  Threatening to walk has less impact at big firms - they are used to losing key staff to competitors.

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                    #19
                    Ignoring the more optimistic (aka unrealistic) claims above, the only real ways to prove you are worth an increase are either to demonstrate you are well under current market rate for the job you are doing - difficult at best, most of the time - or are adding value to your client over and above what you are being paid to do - also difficult in some areas but eminently doable in others. Both require clear and supportable numbers of course. Demanding a percentage without them will be pointless.

                    Any rise will probably come out of the agency margin. That may not be big enough to give you anything of course, especially if they are on a PSL rate.

                    And both client and agency are affected by the cost of living rises remember. that particular argument won't work, all else being equal.

                    I do agree that businesses have to change their charges on occasion, but it has to be for good reason and make commercial sense to the other end of the chain.

                    So if you want a rise, you have to work at it and prove that it is deserved. Never forget you're already being paid to do the best job you can.
                    Blog? What blog...?

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                      #20
                      Originally posted by GigiBronz View Post

                      well I assumed he is a developer, 1-2 languages, some seniority. 5-10y experience.

                      yup £750 is fair game in this market.
                      That's an awful lot of assuming and speculating.

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