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Unhappy with rate... what to do?

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    Unhappy with rate... what to do?

    Hi, Hi. Hoping to get a bit of advice from all you highly experienced contractors out there.

    I'm 3 months in on a 12 month contract at a rate I thought at the time was 'reasonable'. Since then, seeing several contracts of similar work, area and industry come up with a significantly higher rate coupled with finding out what rates some of my contracting friends of similar skill are on (some at same client, some not) I have lately become slightly disheartened.

    I also recently found out that the agency charges the client a 45% markup on my rate (or, they take 30% cut what they charge client, depending on how you work it out) which is pretty astronomical is it not? I am now feeling like a bit of a mug!

    I guess my options are

    (1) Ask the client for a rate rise
    (2) Ask the agency for a margin cut
    (3) Hand in notice and find another contract

    I feel uncomfortable with (1) as I'm only 3 months in and also they pay a decent amount to the agency. And (3) is only really a last resort as I'm not really that keen on going through the whole finding & starting the new job process right now! Would you have any advice on how best to go about asking for (2)? What are the chances?

    Thanks.

    Robin
    It's about time I changed this sig...

    #2
    If your contract allows you to give notice, tell your agent you've had an offer somewhere else that you'd prefer to work (closer to home / interesting project / opportunity to cross-train / etc) for £xxx (current rate + 20%), and that you've said you'll give the new client your decision in a couple of days. Then see what happens - but be prepared to leave if you don't end up with a figure you're happy with.

    Comment


      #3
      If the agency are taking the piss with the margin then there is scope to get it upped mid contract but you might have to play hardball with the agent. Ask nicely at first, they'll probably fob you off, then threaten to walk, and if they still aren't budging then a veiled threat to cause trouble with the client by moaning about being 'ripped off' might do the trick. I've done it, I was told porkies about the margin by the agent so felt I wasn't being unreasonable

      Comment


        #4
        You will not get the agency to drop their cut unless you can offer them an incentive to do so. And you're not in a very strong position to offer an incentive given that you've signed a 12 month contract.

        If you're willing to think long-term as opposed to short term, you can enjoy the fact that you've got another 9 months of (almost) guaranteed work ahead of you. And then negotiate a considerably better rate after your contract ends with all the experience you've gained.

        Comment


          #5
          have a look at this and get even more depressed

          http://forums.contractoruk.com/thread18376.html

          Comment


            #6
            Originally posted by chicane
            You will not get the agency to drop their cut unless you can offer them an incentive to do so. And you're not in a very strong position to offer an incentive given that you've signed a 12 month contract.

            If you're willing to think long-term as opposed to short term, you can enjoy the fact that you've got another 9 months of (almost) guaranteed work ahead of you. And then negotiate a considerably better rate after your contract ends with all the experience you've gained.
            'tis good advice.

            I am never too concerned about what the agent gets. You need to be happy with your rate, what you are invoicing for.
            Rule #76: No excuses. Play like a champion.

            Comment


              #7
              From the tone of your post I'm guessing this is your 1st or 2nd contract.

              Yes, you can give notice and get somthing else but that is not exactly the proffesional approach and wont do you much good if you ever want to work for that client again.

              You can try and negotiate for a rate rise but it's very unlikely to happen and you have to be prepared to walk if you dont get it. The only barganing tool you have at this point is your labour and unless you are prepared to follow through on the threat to walk to away then you will get nowhere.

              At a guess I'd say your agency are one of the S3 group ( based on the low rate and high margin ) and as such you have very little chance of getting anything out of them. They are notorious for taking advantage of newbie and / or naieve contractors and clients.

              You were happy with the rate when you took it so just because you've found out others are earning more is no real reason to try and get out of it.

              Although the agency cut is something that gets discussed here regularly it really has little bearing on your situation. If you are getting a rate you are happy with ( and you were when you signed on ) it shouldn't matter what the agency is getting. Thats a matter between them and the end client.

              Take the fact that it is a 12 month contract as consolation and do some forward planning based on the fact that you know what your income for the next year will be, and chalk it up to experience. Next time round you will have a better idea of what the market rate is and be in a better position to negotiate before you accept a contract as well as having more contract experiance to put on the CV.
              "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

              Comment


                #8
                Originally posted by TheRightStuff
                have a look at this and get even more depressed

                http://forums.contractoruk.com/thread18376.html
                OK Which chumps are getting over 600 day?

                Comment


                  #9
                  Hi Mr Robin

                  Off topic but --

                  As I've been doing last minute homework, I have found the tax impact is also extremely significant - so hopefully on the next contract do some prior research and take this into account. Forward planning does help all round, but I guess as newbies...you'll be experienced soon.

                  Cheers

                  Comment


                    #10
                    Originally posted by chicane
                    You will not get the agency to drop their cut unless you can offer them an incentive to do so.
                    I know... That's the reason for the post

                    Originally posted by chicane
                    If you're willing to think long-term as opposed to short term, you can enjoy the fact that you've got another 9 months of (almost) guaranteed work ahead of you. And then negotiate a considerably better rate after your contract ends with all the experience you've gained.
                    I guess so... I'm just frustrated at myself that if I knew the client thinks I'm worth Rate+45% I would have asked for more in the first place

                    Originally posted by DaveB
                    From the tone of your post I'm guessing this is your 1st or 2nd contract.
                    3rd, but 1st in a new area, so was unsure of going rates etc. I wasn't trying to sound annoyed/pissed off, just a bit disappointed I suppose.

                    Thanks for all the answers chaps!

                    R
                    It's about time I changed this sig...

                    Comment

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