Client wants me to sign on the old rate, and discuss after Christmas

[dogquoteplus]

I spent 6 months with CapG, at a rate of £360pd inside IR35.
They said that the end client wants to renew me, and I said that I want to revisit my rate. One day the client account manager wasn't there, the other something else happened...and I followed up again. They said that they thought we agreed and that in any case, the increase they can give me is £400pd. I said, that's not what I think the going market rates are at the moment, and I want £500.

He went quiet, and said something along the lines of "look, let's not disrupt the client right now, just accept whatever comes your way, and when V is back we will rediscuss and see if there is any room for further increase. If you're still not happy, you can give the 1 month's notice".

Then, I get the contract via my umbrella at a rate of £360! I messaged them and said that I can't accept that. They messaged back and said "to avoid compliance delayse and ensure smooth continuation from 2nd Jan onwards, I suggest signing the contract promptly. With the Xmas period approaching, many colleagues are on leave and any pending actions will get delayed further. In parallel, we will liaise with the admin team to revise the contract to the agreed rate of £400, effective from the 2nd Jan. Once V is back, will review the feasibility of any further increase".

I am confused. This is not quite a professional way to approach this, in the same way that you wouldn't just go to the client and say "just sign this now and we'll see". I do, and don't want to sign it: If I do sign it, there is no guarantee that they will honour their agreement, plus it kind of anchors me on the "we said £400". On the other hand, I don't want to be a blocker to the process.

What do you think? Anyone had similar experiences? Maybe specifically with an offshore consultancy?

[Protagoras]

I've never had to negotiate on this sort of basis, but ...

Pragmatically, unless you want to leave or have something else lined up, the opportunity cost of signing up for £360 now and then sorting this out in January when the necessary stakeholders are available is not horrendous.

My reading of the message quoted looks like an agreement to a rate of £400. Obtaining a higher rate may be possible - rather depends of the strength of your position and the available funds for the role.

At the end of the day, if they won't negotiate to a rate that you're happy with you can find something else, give notice and leave.

[dogquoteplus]

I believe I can negotiate even higher as my performance and feedback have been excellent.

I just wanted a second opinion on the disorganization and renegotiation part.

Again, the £400 was unilateral. The "I thought we agreed on £400" was a really random quote, we never discussed numbers prior to that call. As if they decide to bump up all the renewals by £40.

[northernladuk]

Focussing on your expectations first. Pushing up to 500 is £140 a day and huge increase so I really cannot see that sticking for a moment. That's nearly a 40% increase for doing the same work you were doing before. I've seen people let go for asking such massive increases without bothering with any negotiation and I don't think I've ever seen anyone actually get anything like an increase like that. I can imagine the going rate is £500 but if you are at CapG and other similar companies the rate is going to be ridiculously low. It's what they do.

How important is the £500 to you and what will you accept? Would you sign if they offered £400? if they DID retrospectively change the contract to £400 would you still be rocking the boat or would you just get on with it? It's key to know if you will refuse and continuing pushing for £500 even if they do move it to £400. IMO if you do you'll be gone but I could be wrong.

Must admit I've got to feel for them a bit here. If they can't speak to the chain of authorisation then then can't move on it which deffo sounds like the case which means you will be out of contract and mustn't work so they are stuck between a rock and hard place. Generally I'd say no way in hell would I be signing an incorrect contract but if the people aren't available to amend, approve and issue the new contract in time then you've not contract in Jan. Client won't be happy about it at all even though they are part of the problem. Tough one that.

I think I'd get an email with absolute confirmation the £400 would be honoured as you have a contract of sorts. Get the new one, strike out the rate and put the new one in and then send it back. You've a documented trail and the chance to actually work in Jan.

As I say though, if you are going to agree to £400 and then kick off next year for more then I can't see it working out well for you.

[northernladuk]

I've never had to negotiate on this sort of basis, but ...

Pragmatically, unless you want to leave or have something else lined up, the opportunity cost of signing up for £360 now and then sorting this out in January when the necessary stakeholders are available is not horrendous.

My reading of the message quoted looks like an agreement to a rate of £400. Obtaining a higher rate may be possible - rather depends of the strength of your position and the available funds for the role.

At the end of the day, if they won't negotiate to a rate that you're happy with you can find something else, give notice and leave.

Actually just had a rethink after I posted and read this response. Poster uses 'they' at the moment so this appears to be the agency. I don't think the agency can agree an uplift that's not signed off by the client and if it's CapG it's likely they are on a fixed percentage so no agency margins to wiggle either. I'm now thinking the agency has not or cannot re-negotiate with the client. I can now see the OP coming in to work on January and the agency saying the client refused the uplift and we cannot shoulder as it will mean they are making a loss on you so take it or leave it.

I am now thinking you are pretty screwed here. There appears to be a good chance you aren't going to get an uplift but at least if you sign the contract now you've got something to come back to next year. They've got you by the short and curlies and agencies aren't renowned for taking it on the chin and doing the right thing.

Save all your evidence, sign and expect to not get a rise at all. If you do then take that as a bloody good result.

[northernladuk]

Some good lessons have come from this at least.

1) Always find out if your agency is on a fixed percentage. If they are it will be very low and any rate rises will have to come from the clients rate card. They have no wiggle room to up you. I would guess if it's CapG it's fixed hence my comment above that you need to be prepared for no rise in Jan.

2) Don't leave contract negotiations to the last few weeks in Christmas and don't let the agency drive it. You pick it up early and start knocking on doors with your expectations before everyone goes on holiday

[Protagoras]

Perhaps OP will clarify the supply chain; I didn't read into the post that there was an agency in the chain.

I think the harsh reality is that in the current climate "sign & renegotiate" is a better play than "stall & negotiate" simply on the grounds of securing income in January.

As for the 'process' it's not great, but isn't that just the reality of the supply chain structure?

As northernlad suggests, starting re-negotiations earlier would help

[hobnob]

First up, I agree with NLUK that jumping from £360/day to £500/day is ridiculous, especially after 6 months. (If you'd been there for several years as a "permietractor", and you were still stuck on your original rate, you might have more of a chance.)

Since you've got the £400/day rate in writing (rather than just spoken over the phone), I'd go ahead and renew for £360. You might not get the £400, but at least you can then justify leaving. You can also start job hunting while you're still getting paid, rather than being on the bench at the start of Jan.

As a related question, how long is the renewal for?

[dogquoteplus]

First up, I agree with NLUK that jumping from £360/day to £500/day is ridiculous, especially after 6 months. (If you'd been there for several years as a "permietractor", and you were still stuck on your original rate, you might have more of a chance.)

Since you've got the £400/day rate in writing (rather than just spoken over the phone), I'd go ahead and renew for £360. You might not get the £400, but at least you can then justify leaving. You can also start job hunting while you're still getting paid, rather than being on the bench at the start of Jan.

As a related question, how long is the renewal for?

Renewal is for 12 months.

[dogquoteplus]

The whole £500 point was so that we could settle at around £430-450 or so, knowing from an insider that CapG is on a "hefty margin". Granted, they might want to keep that margin, but what good is it if I leave?

Sadly, I am going to keep the contract even on £400 tbh, especially in this economy. But there's no harm in trying to get a little more. Worst case is that they'll say no.

No northernladuk's point, I did try to start contract renewal negotiations, when I found out by the end of November that I would be renewed. However, as I wrote, the meeting was pushed back a couple of times due to unavailability of people.

The chain goes Agency->CapG->Client.

Also, CapG have a fixed price with Client. "They", referred to the team I was negotiating with, comprising my CapG LM, the account manager and someone else.