Contract / Rate Cut Decisions

[nomadd]

Your absolutely right to make a stand, People seem to forget that as a contractor you are a business working for yourself, get a builder (or any business) round to your house tomorrow and tell them what you want doing then in a weeks time tell them you have a load more work you want doing and you expect them to not only do the work but your going to pay them less than you originally agreed, they are going to tell you to "JOG ON" so why should your business be any different.

Its your business (forget what other contractors are doing\getting paid) get in there and renegotiate, lay it on the table give them all the reasons your expecting an increase and not a drop in rates, and as someone has said be prepared for the consequences.

And one last thought, As contractors these kinds of issues are going to come up for all of us at some point so if there are some contractors who are not prepared for the consequences of failed negotiations or loss of business they really should be thinking long and hard about whether they should be contracting in the first place

+1

Had my last client try the rate drop thing on twice. I was the only contractor who never accepted a pay cut. The other contractors accepted the first, and therefore left themselves completely open to being stung a second time - which they were. By the end of the project, they were down £150 / day on the rate I was charging. Once the project was complete, we were all let go at the same time. So their rate cuts got them nothing extra in the end.

Just my two cents.

Nomadd

[Fred Bloggs]

Myself, I see it as a very high risk strategy to brazen it out. High risk in the worst market I have ever known. In the next couple of weeks if the office rumours prove correct, I expect to be hit with a 10 to 15% cut having already had my hours cut from a regular 44 to 45 a week down to a "no more than" 37 a week. I can't really take time out so I have already decided to smile sweetly if/when the cut arrives but then have a major marketing campaign to look for another gig. The very big snag in that plan is, the only jobs that I can see are paying £30 to £32/hr when I'm used to £45 or £46/hr. So I may just be in a total cleft stick if the office rumours of a looming rate cut are proven right.

[Support Monkey]

Myself, I see it as a very high risk strategy to brazen it out. High risk in the worst market I have ever known. In the next couple of weeks if the office rumours prove correct, I expect to be hit with a 10 to 15% cut having already had my hours cut from a regular 44 to 45 a week down to a "no more than" 37 a week. I can't really take time out so I have already decided to smile sweetly if/when the cut arrives but then have a major marketing campaign to look for another gig. The very big snag in that plan is, the only jobs that I can see are paying £30 to £32/hr when I'm used to £45 or £46/hr. So I may just be in a total cleft stick if the office rumours of a looming rate cut are proven right.

I agree this is the worst market there as ever been and rates are through the floor however TFOUR is not just being asked for a pay cut he is being asked to do more work than was originally expected and take a cut for doing it, as a business he needs to renegotiate the terms of the contract as any other business would do even if the renegotiation is "yes i will take the cut but i will not be doing the extra work"

As i said on my previous post contractors need to be able to accept the consequences of poor market conditions, poor rates, and be prepared for what ever is thrown at them (like any other business), "I can't really take time out"what are you going to do Fred Bloggs if you roll up to work tomorrow and they says thanks Fred but we don,t need you anymore.

We have had the good times and now the bad and if you have not been sensible with your £45 an hour and cannot survive on a lesser rate or no rate at all then as i said before you probably want to think about whether you should be contracting

[Stan.goodvibes]

I'm gonna go with the 'Always look on the bright side of life' option - yeah you took a 10% pay cut, but so have most of the contractor workforce, and yeah you may have to work a bit harder for that rate less 10%, but on the plus side you are still getting paid a decent chunk of change every week *and* you aren't on the bench. It's a recession- time to put your head down and work your *rse off for whatever you can because as others have rightly pointed out several times - a drop of 10% is vastly better than a drop of 100% on the bench. You can slack off again and bump your rate when the good times come back.

Sounds like you're having a bit of a problem with the old green-eyed monster - looking at others around you and comparing their rates etc. So some of your collegues could afford to take the risk and held out for no pay cut and got away with it this time. It may not work next time.

Forget about the others, take a look at what you're getting in a VERY difficult time for IT contractors, and do what it takes to get that contract extended for as long as possible.

[Clippy]

I'm gonna go with the 'Always look on the bright side of life' option - yeah you took a 10% pay cut, but so have most of the contractor workforce, and yeah you may have to work a bit harder for that rate less 10%, but on the plus side you are still getting paid a decent chunk of change every week *and* you aren't on the bench. It's a recession- time to put your head down and work your *rse off for whatever you can because as others have rightly pointed out several times - a drop of 10% is vastly better than a drop of 100% on the bench. You can slack off again and bump your rate when the good times come back.

Sounds like you're having a bit of a problem with the old green-eyed monster - looking at others around you and comparing their rates etc. So some of your collegues could afford to take the risk and held out for no pay cut and got away with it this time. It may not work next time.

Forget about the others, take a look at what you're getting in a VERY difficult time for IT contractors, and do what it takes to get that contract extended for as long as possible.

^WHS

TBH, you fooked it up by agreeing to the rate cut in the first place. So,

Take a few days to a week off to clear your head
Sign the contract and return to work feeling refreshed
Think about your new baby which should be your main concern

There is a cold wind blowing on the bench - do not get hit by it!

[TFour]

Thanks all, I don't actually agree with most of what everyone has said - it all makes sense.

I think the best I can do is to politely make my position clear (I have taken on additional responsibility to help your business and am currently working below the going-rate for it) so that when it comes to any future negotiations, the new 90% rate doesn't become the norm of the status quo (it's a temporary measure accepted while clientco's organsation was in flux).

If/when I did find something else clientco can also then not say "oh, you never told us you were unhappy".

The big picture still is I am still earning ok money not far from home. The question to really ask myself is "If you weren't in work and were offered this contract for this rate, would you take it". The answer is undoubtedly yes, especially in the current market.

It's definitely an ego/looking at other contractors thing - I am just finding it difficult to shake off the mental state of mind that's telling me I shouldn't just roll over. It's like I have a devil on my shoulder saying "F*** them, if they think they can just treat you like a permie (you will do what I say when I say), let them try running all their projects for the a while till they get a replacement who will then take time to get up and running and not know them/the business as well as I do.

Let me be clear though on the cut thing - if I was just doing the same job and got a cut (or got a rise for the additional responsibility then a 10% cut), I would just accept it as part of the current market conditions. It's the fact that I've taken on so much more and been rewarded with a cut while the client saves on headcount and my rate - that makes it so galling.

[Fred Bloggs]

I agree this is the worst market there as ever been and rates are through the floor however TFOUR is not just being asked for a pay cut he is being asked to do more work than was originally expected and take a cut for doing it, as a business he needs to renegotiate the terms of the contract as any other business would do even if the renegotiation is "yes i will take the cut but i will not be doing the extra work"

As i said on my previous post contractors need to be able to accept the consequences of poor market conditions, poor rates, and be prepared for what ever is thrown at them (like any other business), "I can't really take time out"what are you going to do Fred Bloggs if you roll up to work tomorrow and they says thanks Fred but we don,t need you anymore.

We have had the good times and now the bad and if you have not been sensible with your £45 an hour and cannot survive on a lesser rate or no rate at all then as i said before you probably want to think about whether you should be contracting

OK, I should have said "Really don't want to take time out". But I could do so if it was forced on me. I see your point entirely and I do have a war chest that I can live off if I needed to. I hope I don't have to, the next couple of weeks will tell.

[lukemg]

Can't believe what I am reading on this thread, there is only one sane option. Forget the renegotiate, that is gone, there is only one valid option.
You accept the contract as it is and start looking for your next contract. When it is landed, you hand in notice and walk.
Anything else in this market is madness.
I give a measure of loyalty when I sign a contract, I have walked off one but that is in 14 years.
However, if I was getting messed about, rate cuts etc I would have no qualms whatsoever about finding another role and walking.
Don't kid yourself you are irreplaceable, there are hundreds of available PM's getting splinters who could bounce into your role and be all over it in a week.
Clientco has forfeited the right to loyalty with this initiative but not to professionalism, do the job to the level you are capable until you find an alternative (good luck finding one...)

[SizeZero]

I am still earning ok money not far from home

It's definitely an ego/looking at other contractors thing - I am just finding it difficult to shake off the mental state of mind that's telling me I shouldn't just roll over.

You're having a baby; you're going to spend the rest of your life (or at least the next 18 years) rolling over, making compromises, and putting others before yourself. Egos are for singles, I'm afraid

[nomadd]

Egos are for singles, I'm afraid

Probably explains why I'm still single, then. That, and the fact that all the women I know are far too expensive to run.

Nomadd