Inflationary rate rise

[srennocks]

Having been contracting for nearly 10 years now, one thing I've never done, although probably should on some is negotiate a rate rise, contract terms I have changed, but never a rise! What it has meant is that I've hardly ever had a spell out of work that wasn't of my choosing.

However, I'm keen to correct the error of my ways, and I'm coming to the end of a 3mth spell with a new client, looks like they'll keep me on, and reality is, I'm really enjoying it, so want to stay. However, I think it's high time I started to act more business like with my rate negotiations...so...

Question is, how many of you regularly push for an inflationary rate rise (that's the angle I'm looking at on this one (for now)) ?

[XLMonkey]

Never done it that way, to be honest. So far, strategies have been:
- I told you at the outset that this was a trial rate in order to win the business (tried a couple of times, worked once, didn't work so well the other)
- I've reviewed the market and its clear that the going rate for the work is significantly higher than you are paying, you ought to bridge the gap if you want to keep me around (kind of an inflation-type argument, but referencing the contractor market only)
- The role has grown significantly and so the value I'm adding is also greater than before, so the rate should reflect this (my favourite, works pretty much every time).

Be interested to hear how you get on.

[Captain Dispensable]

As matter of course many contractors I know (including me) routinely ask for a rate rise at every renewal. Unless there are exceptional circumstances, such as being in the middle of a recession when the rates are falling, it works every time.

Even asking for a couple of quid extra per hour is worthwhile, it all adds up. Best approach is to get friendly with fellow contractors at your site and see what they're on and are getting at renewal. Don't expect them to always be 100% truthful though but knowledge is power!

You can bet the agency is asking for rate increases each renewal even if you aren't. They're so slimy I'm suprised there's any left in the east-end where jellied eels is the dish of the day.

Acknowledging what you say about not asking too much to prolong a contract, I've frequently been the last contractor on board a project when all else have been terminated, and every contact has started as a 3 monther but extended into 1 or 2 years, sometime longer. Possibly down to my skills but probably because I accept a rate I'm happy with, seems a fair market rate, and I don't push for too much each renewal. Again, getting info off fellow contractors on the project helps gauge when an agent is taking the piss with your rate and when there's more room for manouver.

[srennocks]

Thanks guys... trouble will be justifying it, I've not had all that much work during the first 3mths as the requirements gathering is taking longer than expected, so nothing much for me to point to. However, the inflationary bit I'm keen to get.

Do you usually get asked for a set of reasons/justifications for the rise, or just leave it till last minute and go in with a strong request for a rise ?

Think I'll request 5% increase, then if end up falling back to 3% to cover inflation wouldn't be too dissappointed.

[2uk]

Never done it that way, to be honest. So far, strategies have been:
- I told you at the outset that this was a trial rate in order to win the business (tried a couple of times, worked once, didn't work so well the other)
- I've reviewed the market and its clear that the going rate for the work is significantly higher than you are paying, you ought to bridge the gap if you want to keep me around (kind of an inflation-type argument, but referencing the contractor market only)
- The role has grown significantly and so the value I'm adding is also greater than before, so the rate should reflect this (my favourite, works pretty much every time).

Be interested to hear how you get on.

Do we ask an increase from the Agent or the Clinet ?

Is it tabu to discuss you rate/agent's cut with the client or it all depends on each realationship. ?

[DaveP]

they can only say no

I've done it once on my current contract.
I was initially only going to be there 3 or 4 weeks, but very quickly I proved my worth and towards the end of my initial contract the client wanted me to stay on indefinatly.

So at this point I requested a rise (only £1 extra to my hourly rate) which equates to £100 a month approx.

I put this to the agency not the client.

Agencies will differ they will either absorb the cost in there margins or pass the extra cost onto the client.

either way it worked for me.

[XLMonkey]

Do we ask an increase from the Agent or the Clinet ?

Is it tabu to discuss you rate/agent's cut with the client or it all depends on each realationship. ?

Strictly, the contract you have is with the agent, so in theory your negotiations are with them. But, I think that you have to do both - the rate increase has to come from one or the other, after all.

It isn't taboo, but discussion of the agent's cut does depend on the nature of the relationship with the end client. Some clients have a fixed markup agreement with their agents, so they may well know it anyway. If the end client doesn't know, then the situation can be complex - but it usually puts you into a stronger negotiating position, since you have more information available to you than they do.

[MrsGoof]

I'm just playing devils advocate

Think I'll request 5% increase, then if end up falling back to 3% to cover inflation wouldn't be too dissappointed.

I'm coming to the end of a 3mth spell with a new client,

5% inflation in 3 months, what country are you working in ?

One more point is that if you push hard for it, be prepared to walk.

MG

[lukemg]

I wouldn't after 3 months unless -
1 - I had other offers.
2 - I hated the place and wanted a good reason to leave. If they say no, you leave and it was their choice not yours.

If I liked the place, I would say to the agent, yes I will stay but I want a rise if their is any renewal after this one.
This all applies for a PSL, if not you can be certain the agent is ripping you off so play double hard ball for more cash. If you can find out the rate the agency is charging then you really are in business.

[srennocks]

I'm just playing devils advocate



5% inflation in 3 months, what country are you working in ?

One more point is that if you push hard for it, be prepared to walk.

MG

What I meant was I'll ask for 5% and if end up with 3% merely to cover inflation would be happy enough. What I didn't state is that immediately prior to these 3mths I did a 7mth spell with same agency + with same end client (albeit at different site)...therefore I don't believe requesting 5% with 3% of that put down purely to inflation to be that extravegant or unreasonable.