How to outmanoeuvre during contract extension..??

[Darren_Test]

Hi Guys,

I am in an interesting situation on my contract extension negotiation. I am not sure what should be my next move, so I thought wise heads here might have some inputs.

My current situation is ..
- Contract with an outsourcer through another outsourcer to an IT service company from start of the year, but not yet established well as activities are at low end at the moment, But I am the only one responsible for the specialised area.
- On a rate may be half of market rate & away from home as well
- Got extension mail, waiting for contract - But no other option at the moment

Few days back client came forward and mentioned they are paying TOP rates & enquired if we are getting the same..?
We shared some indicators without actually revealing rate.

Now how I will negotiate to get a fair rate, keeping in mind that my contract ends next week..??

I don’t want loose this role as I have nothing else, same time looks like Outsourcers (2 companies) cut is more or less same as what I am getting ..! At the moment I haven't shown any eagerness & haven't contacted the company though contract ending next week.

What’s best approach to outmanoeuvre these guys without losing contract..??

- Darren

[The Wikir Man]

Speak to the client - whoever it was that said they were paying top rates. Explain the situation gently (or not, depending on your relationship with them). Explain that someone somewhere is extracting the urine.

Explain that you want to stay, but the rate that you are actually getting is not competitive enough to justify the work that you are doing and location, escpecially since they are paying significantly more that you are getting.

With luck, they will pressure the agency to cut their margin and pass it on to you. Of course, it could backfire and you end up with the same rate, but the client cuts the amount they are paying to the agency.

[Harrysp]

Am i right in saying that what you have is

Company A > Outsourcer 1 > Outsourcer 2 > Agency 1 > Your LTD / Umbrella?

if so there are lots of people taking a slice of that pie.

Also unless you have something else to go to, your negotiating position isnt very strong, no point threatening to walk if you are unable to execute that threat.

You could ask nicely, but have you even be there that long to justify an increase? or has your workload / responsabilities changed since you accepted that role?

I think you will struggle to be honest.

[Glazza]

Threatening to walk is the only leverage any of us have in this position. I tried to get more money recently without the threat and the guy looked at me as if I was mad!

[Darren_Test]

Speak to the client - whoever it was that said they were paying top rates. Explain the situation gently (or not, depending on your relationship with them). Explain that someone somewhere is extracting the urine.

Explain that you want to stay, but the rate that you are actually getting is not competitive enough to justify the work that you are doing and location, escpecially since they are paying significantly more that you are getting.

With luck, they will pressure the agency to cut their margin and pass it on to you. Of course, it could backfire and you end up with the same rate, but the client cuts the amount they are paying to the agency.

I already indicated to client that my rate is half of market rate & it covers my costs only. They said they are paying TOP rate. I also indicated to client that I wish to work with the team long term especially since I replaced some one left the project 3 months back only.

I am yet to receive extension contract, But no indications that they will increase rate.

[doodab]

I already indicated to client that my rate is half of market rate & it covers my costs only.

I would ask for a better rate, if they say no then look for something else and leave when you find it.

[Darren_Test]

Am i right in saying that what you have is

Company A > Outsourcer 1 > Outsourcer 2 > Agency 1 > Your LTD / Umbrella?

if so there are lots of people taking a slice of that pie.

Also unless you have something else to go to, your negotiating position isnt very strong, no point threatening to walk if you are unable to execute that threat.

You could ask nicely, but have you even be there that long to justify an increase? or has your workload / responsabilities changed since you accepted that role?

I think you will struggle to be honest.

It is Client > Outsourcer 1 > Outsourcer 2 > Your LTD / Umbrella..
Yes 2 sets of people. Only I know I donot have any other option. I can position myself as if I have plently of offers..!! Thats why I havn't shown any urgency to get extension though I was worried about it. Now I need to reflect that to the company two days b4 extension.

I did resonably well during last few weeks thats why contract is extended. But now I want both outsourcers to reduce their margin.

[The Wikir Man]

Outsourcers are unlikely to reduce their marge, IMO. They will have a daily rate card for your "grade" and there won't be much scope for any increase in your take-home.

Start looking elsewhere.

[Darren_Test]

I would ask for a better rate, if they say no then look for something else and leave when you find it.

Should I wait for contract letter for negotiation, which might happen only days b4 current contract end..? Is that going to be the best time to push them hard to get better rate ..?

[Not So Wise]

Normally in a situation where client is paying one rate and you are getting a lot less I would recommend using that knowledge to your advantage to ‘negotiate’ the agency down (agencies that are taking the Mickey are nearly always afraid of being outed to the client, not because client might think they are ripping you off, but because client will feel agent is ripping them off), but in your case, with so many people in the chain your chance of succeeding in such a tactic is virtually nil because no one is really getting ripped off financially, more of a case of first outsourcer not really being up to the job and client not properly monitoring/controlling outsourcer and allowing to many “substitutions”

The only way you are going to get more money is if your are actually prepared to walk and even then you are unlikely to get much with so many pockets in the chain that need filling