• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Increase Day Rate

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

  • pjt
    replied
    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?

    Leave a comment:


  • bbp
    replied
    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.

    Leave a comment:


  • GigiBronz
    replied
    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.

    Leave a comment:


  • northernladuk
    replied
    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.

    Leave a comment:


  • northernladuk
    replied
    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?

    Leave a comment:


  • GigiBronz
    replied
    Originally posted by jamesbrown View Post

    Doing what? The range of day rates around here will be an order of magnitude, say £200-£2000. Not everyone around here is a code monkey or PM or even working in IT (or even pricing themselves with day rates); and even within those categories, there will be a broad range.
    well I assumed he is a developer, 1-2 languages, some seniority. 5-10y experience.

    yup £750 is fair game in this market.

    Leave a comment:


  • jamesbrown
    replied
    Originally posted by GigiBronz View Post
    £650pd is not too much for current market. even £750 is fair game.
    Doing what? The range of day rates around here will be an order of magnitude, say £200-£2000. Not everyone around here is a code monkey or PM or even working in IT (or even pricing themselves with day rates); and even within those categories, there will be a broad range.

    Leave a comment:


  • GigiBronz
    replied
    I think you would be starting on the wrong foot if you think in that way. Business is business and you shouldn't be afraid to negociate or go back on the market.

    I believe the best approach is to just say what your new rate is, short and sweet, no discussion upon it. Considering only the inflation is about 15% in real terms and the market is booming, I would say go for the higher figure. £650pd is not too much for current market. even £750 is fair game.

    Think of it the other way, if it was them in a more favourable position it would have been a 30sec decision and we both know how that would have gone.
    And this market won't last for long, we might go in a deep recession and it's up to you to provide for yourself and your family. So milk it while it lasts.

    Of course your manager will try to fight it because he will look bad as if he lost control over you. You are no longer in his cuckhold. So he will probably dump some more work on you and act as a **** (for most of them it's first nature) then take you into his office for a chat where he will either have a very soft tongue or threaten you with cancellation between the teeth.
    The agent will be less polite about it, he'll probably raise his tone and use some big words. Don't take him as face value, he is probably manifesting withdrawal symptoms from all the coke he has been snorting off your back.

    Small outfits usually do not have negotiation power so they allow the agencies to go on flex rate. £500pd is not a lot and mot likely is an mis-sold inside role but we are not assessing that now.

    Agency might call you as well and try to put you in your place, ask you to do reviews, write documents. Think about the bad things you've done in a previous life.
    You can dodge their calls and make up a polite excuse via email. There isn't anything to talk about here. You are just adjusting your rate to inflation. Case closed.

    And most important, do not show up on site without a signed contract. Be prepared to walk if it comes to it.
    People do not like leaving but I got to appreciate time off between gigs. That is what keeps me sane.
    Working continuously to retirement is for permies and horses.
    Last edited by GigiBronz; 17 February 2022, 10:33.

    Leave a comment:


  • jamesbrown
    replied
    As noted above, it's all about leverage.

    The best way to get an increase as a permie is to have another job lined up that is offering more (and that you would be happy to accept), because that provides leverage with your current employer (assuming you want to stay).

    The best way to get an increase as a contractor is much the same, unless you are inherently in-demand, in which case you have built-in leverage because your client already knows you can find another contract easily without having an alternative lined up.

    Of course, if you are not inherently in demand and you have something better lined up, then you may as well move to it and avoid the faff.

    Leave a comment:


  • eek
    replied
    Originally posted by PerfectStorm View Post
    The process is much the same as it is in the permanent world
    • You get better increases by switching out to a new gig and agency
    • Your existing agency may only take you seriously if you threaten to leave and are serious about it
    • Know your leverage - do they need you or do you need them?
    • Money isn't everything - are you onto a cushy deal now that you might miss if you left? Are they letting you work from home as much as you want, no one giving you a hard time, light on hours? It all counts.
    • If you happen to spend 2 weeks or more on break between gigs then you may have to work longer than you thought to make back the money you lost versus if you'd just stayed where you were, invoicing continually
    On the last point - 1 day of not working requires 10 days under you new rate to make up the increase. 2 weeks out and it requires 20 weeks at the higher rate to catch up where you would be by continually working.

    Leave a comment:

Working...
X