Contract renewal - rate cut request

**NickNick** · 4 March 2009, 09:13

If you've been there that long, I would guess you have a good relationship with the client, so why not just talk to them?

**expat** · 4 March 2009, 09:20

Originally posted by Flopsy View Post

Have nearly finished a successful 18 months at the same company that was extended in 3 monthly chunks (normal for me).

Approached my agency about an extension and they say that the company has asked for a 10% deduction in my rate.

The agency might as well try it on, they have nothing to lose. Either you take a 10% rate cut and the agent pockets it, or you don't and they have lost nothing.

**Sausage Surprise** · 4 March 2009, 09:25

Definitely check this out with the client - I know what my money is on.

**Mr Crosby** · 4 March 2009, 09:46

I've got the same, just been offered another 3 months but at £10 a day less. I just accepted it as I can’t be arsed to argue.

**BrilloPad** · 4 March 2009, 09:48

If the client wants the cut (which I doubt) then try to find out why they want it. They might just want to cut budget : so maybe you could do less hours?

**pmeswani** · 4 March 2009, 10:00

Originally posted by Flopsy View Post

Have nearly finished a successful 18 months at the same company that was extended in 3 monthly chunks (normal for me).

Approached my agency about an extension and they say that the company has asked for a 10% deduction in my rate.

I've been a great wee earner for the agency and put business their way. It's also been a great contract for me so I'm not complaining at all.

The end business is very happy with my work and would like me to stay on (or so they say). It's a PM / Infrastructure role. They have more projects ahead.

The business at is not financial/banks and has not been particularly hit by the credit crunch. They are quasi-Government and agreed a budget months back.

I assume that either someone is lying or that the end business is "trying it on".

Any advice/comments welcome. Obviously I'll see what else is around and what else I want to do with my life right now...

It does reflect another posters comments that in the current market, agencies could be using this to boost their margins or the end business to force down costs, with the contractor in the middle.

As I said I'm not complaining and this is just really to hear from others who have faced the same problem and to share information about the market.

Ask the agency if they would be happy for you to walk and ask them to think about it and come back with the answer. Tell the client that the agency wants you to take a rate cut and find out if this is the case.

**simes** · 4 March 2009, 10:59

I agree with the first guy - if you have a relationship with the client, buy them a coffee and have a chat.

**The Agents View** · 4 March 2009, 12:20

Given that new business is very very tough to find at the moment - I would be thinking that the agency wouldn't put its current business at risk unless it was really being put under pressure to do so. Speak to the client, as them what the request is about, and be prepared to fight your corner - explain the value you bring, and how much money your project will save them etc, then throw in the cost to recruit a replacement will negate any savings they would make if you walk when the next role paying a higher rate comes through (which is more likely if your rate is cut).

I would doubt whether or not it's the agency trying it on, but some agencies try all sorts!

Good luck

TAV

**thunderlizard** · 4 March 2009, 17:23

It's a request, not an ultimatum. Companies often ask their suppliers for a discount for no particular reason - I do it myself. You need to gauge whether it's a "my way or the highway" request or a "let's see if we can save a few bob-OK, no harm done" request.

Contract renewal - rate cut request