Renewal of Contract and negotiating rates

**jmo21** · 27 January 2011, 12:43

More info needed.

- What do you do?
- What location is this?

Ability to negotiate:
- How easily could you get a new contract if you didn't renew?
- this is your first contract and playing hardball might not sit easily with you.

**RichardCranium** · 27 January 2011, 13:02

Hmm. I smell an agent rubbing his glands with glee.

A DECREASE on renewal is a novelty. Especially for a 1st contract where one expects a significant INCREASE for the first renewal.

There is a risk the agent has negotiated an increase with ClientCo and is trying it on to maximise their margin.

Any chance of you having a word with a manager at ClientCo to the effect of:

"Why are you unhappy with me? I have been loyal and I am offering to stay. I took this role at a low rate because it is my first contract and I am enjoying being here so would like to stay. Based on what I have read online and colleagues have told me, one can expect a 25% increase [don't ask, don't get] for my first renewal. However, the agent has told me I have to take a rate cut to renew. Is it that you want me to leave and don't want to say so?"

Then watch the tulip hit the fan.

PS: Update your CV upload it to the job boards and start applying for gigs. Now you've done your first contract, you'll be seen as a safer bet by other agencies and should get a higher rate - unless you were VERY lucky with your first contract. Plan to leave.

**kingcook** · 27 January 2011, 13:29

Originally posted by quackyducks View Post

I have been told that I will be offered a 12 month extension which is great, but they will be offering less per day because of the duration of the new contract.

12 months means **** all if there's an x day notice clause in the contract. Sounds to me like you're being shafted.

**TykeMerc** · 27 January 2011, 14:07

Indeed, £250 a day is the (very) rough equivalent of a £40k salary, that's not much considering that you have to take contractors risks.

You need to be looking for an increase and not agreeing to a cut.

As others have said you've some track record as a contractor now so you should find it easier to get a new role on a more sensible rate, get the CV out on the job sites and be prepared to (politely) refuse the offer of the extension.

**thunderlizard** · 27 January 2011, 14:33

I don't really like the way contractors try and increase rates on extensions. Normal companies do give loyalty reductions for long-term sign-ups, but it's horses for courses and that sort of thing should be on the supplier's initiative, not the customer's.

I don't think you have to take a cut at all. If you'd been transferring from a high short-term consultancy rate, then fair enough. But £250 is more like a standard development rate, and you were never charging a short-term premium in the first place. A lot of clients will try and get themselves a discount - they aren't doing their job properly otherwise - but I think you're perfectly justified in sticking to your £250

**Dearnla** · 27 January 2011, 14:51

The Agency are setting out their stall, so you should be pushing back gently along the lines of "Actually I was thinking along the lines of an increase for my next contract"

**lukemg** · 27 January 2011, 15:02

You are already on a poor rate, I wouldn't take any cut, dig heels in hard and talk to the client if necessary to make sure they know about it.

**nomadd** · 27 January 2011, 17:28

Originally posted by lukemg View Post

You are already on a poor rate, I wouldn't take any cut, dig heels in hard and talk to the client if necessary to make sure they know about it.

You are already on a piss-poor rate, I wouldn't take any cut, dig heels in hard and talk to the client if necessary to make sure they know about it.

**NorthWestPerm2Contr** · 27 January 2011, 23:12

Hi,

I am relatively new to contracting, having been a permie for many years. I have taken a short term contract for development work at a rate of £250 per day which runs out soon. I have been told that I will be offered a 12 month extension which is great, but they will be offering less per day because of the duration of the new contract. Can anyone give me some advice as to how much less you would expect to receive per day given the length of the contract. I need to know where it would be best to start negotiations and how low I go before the offer becomes an insult!

Thanks,

quackyducks.

Hi quackyducks. I am somebody who is not too dissimilar to yourself. I started contracting around a year ago and started on exactly that rate. I was able to negotiate my rate up to 260 after 6 months (2 x 3 months). I then moved onto another contract at 280 and now I made a huge jump in my latest offer to something I would have never imagined I could achieve. So I would advise you to demand nothing less than your current rate and if it is not met then you will simply look elsewhere. However you must consider how strong you are in the current market. With contracts the more you get the easier it becomes. I have managed to secure 5 interviews in the space of 2 weeks whereas when I was permie I was getting 1 every 2-3 months. Also make sure you keep expanding your skill set. 250 is not bad if you can get a guaranteed 12 months, but any less and it might not be worth it.

Renewal of Contract and negotiating rates