Rate Increase - how to go about getting one...

[LittleLady]

I'm pretty new to contracting, this is only my second contract. I've had one extension and i've just been told that if I want it there's another one. I have to let them know and they'll inform my agency.

My rate is £300pd, but I know other contractors taken on for the same project are on £325pd and one of them £350 and i'm pretty sure my agent is getting £400pd.

I know the client won't increase rates (why should they, they're already giving my agent £400pd and i'm only getting £65% of that!), so what's my best approach with my agent to get an increase? I was going to tell him I want £340, is that too much to ask for?

Thanks.

[DaveB]

I'm pretty new to contracting, this is only my second contract. I've had one extension and i've just been told that if I want it there's another one. I have to let them know and they'll inform my agency.

My rate is £300pd, but I know other contractors taken on for the same project are on £325pd and one of them £350 and i'm pretty sure my agent is getting £400pd.

I know the client won't increase rates (why should they, they're already giving my agent £400pd and i'm only getting £65% of that!), so what's my best approach with my agent to get an increase? I was going to tell him I want £340, is that too much to ask for?

Thanks.

If you dont ask, you don't get. The agent is on a good markup, so there is clearly room for negotiation.

However, the question you have to ask is, what will you do if they say no? Are you prepared to walk away or just roll over take and it if they refuse?

This is where being in business on your own account becomes a reality.

[psychocandy]

If you dont ask, you don't get. The agent is on a good markup, so there is clearly room for negotiation.

However, the question you have to ask is, what will you do if they say no? Are you prepared to walk away or just roll over take and it if they refuse?

This is where being in business on your own account becomes a reality.

Will agents normally tell you what rate they are getting?

[DaveB]

Will agents normally tell you what rate they are getting?

Some will, some won't, some will lie to you. I'm assuming the OP knows from the cleint end rather than the agent. The best you can do is ask.

The other issue is that, you took the gig at the rate offered and presumably were happy with that. Just because you know the agent is making X off the contract should not affect how you feel about what you are paid. If the agent was only making £10 a day rather than £100 how would you feel about the rate then?

[SimonMac]

If you dont ask, you don't get. The agent is on a good markup, so there is clearly room for negotiation.

However, the question you have to ask is, what will you do if they say no? Are you prepared to walk away or just roll over take and it if they refuse?

This is where being in business on your own account becomes a reality.

WHS

Both you and the agent are out to make as much money as you can for yourself, its just a question of who blinks first.

[LittleLady]

The client have told me the agent rate.

I can see where you're coming from it shouldn't matter to me what the agent is making, but i'm on my 2nd extension, i've had it on good authority that there's enough work for another extension too so isn't it normal practice to ask for a rate increase?
I can back it up too btw, i'm hitting targets, completing projects on time (most of the time ahead of schedule) and quite obviously the client like me otherwise they wouldn't ask me to stay.
As I see it, the agent is now getting money for almost nothing. The client asked if I would like to move to another agency, i'll get a better rate, but I know if that's professional and if it's frowned upon.

I'm learning loads from this forum, but on certain things there's a lot of conflicting advice.

[DaveB]

The client have told me the agent rate.

I can see where you're coming from it shouldn't matter to me what the agent is making, but i'm on my 2nd extension, i've had it on good authority that there's enough work for another extension too so isn't it normal practice to ask for a rate increase?
I can back it up too btw, i'm hitting targets, completing projects on time (most of the time ahead of schedule) and quite obviously the client like me otherwise they wouldn't ask me to stay.
As I see it, the agent is now getting money for almost nothing. The client asked if I would like to move to another agency, i'll get a better rate, but I know if that's professional and if it's frowned upon.

I'm learning loads from this forum, but on certain things there's a lot of conflicting advice.

Moving to another agency could be problematic if you have a restrictive covenant in your contract with the agency that specifically prevents you from working for this client through anyone else or directly.

The agency are still doing some work for you here, they are factoring your payments. If you are on a weekly or monthly pay run then they will almost certainly be paying you before the client pays them and taking the risk in doing so.

In your position I would go back to the agent and ask for the rate hike. Anything over a 10-15% markup for an agency is very good from their point of view. Point out that there is an extension in the bag and another on the cards. You know what they are taking so you are in a position to negotiate but don't be too greedy. Make it clear the client wants to keep you, but you are prepared to walk and find a better paid gig if you can't come to some arrangement.


This is what *I* would do. I'm not saying it's what *you* should do but it is one option.

[The Agents View]

I'm pretty new to contracting, this is only my second contract. I've had one extension and i've just been told that if I want it there's another one. I have to let them know and they'll inform my agency.

My rate is £300pd, but I know other contractors taken on for the same project are on £325pd and one of them £350 and i'm pretty sure my agent is getting £400pd.

I know the client won't increase rates (why should they, they're already giving my agent £400pd and i'm only getting £65% of that!), so what's my best approach with my agent to get an increase? I was going to tell him I want £340, is that too much to ask for?

Thanks.

First things first. FORGET the other contractors. They are nothing to do with you, you are independant - there is nothing "fair" about contract negotiation - it's kill or be killed.

Then....

Think about WHY you are worth the rise. What have you done for the client which makes you worth more money? What have you delivered? How valuable are you to the client? How valuable are you to the agent? (do you pass them information about the client, who's doing what, where there are contract requirements, etc?) - Why should the agent, take a hit on his rate, to keep you happy?

THEN SELL IT TO HIM/HER - "I have proven XYZ qualities, I'm good for your business because of ABC, and I want to keep the relationship going. All I ask is that we address the rate element of this current contract, in order to better reflect our working relationship"

If you focus on whinging about what other people get paid, or whining because the agent is taking too much of a cut, you'll get shot down in flames.

I hope this helps.

TAV

[LittleLady]

First things first. FORGET the other contractors. They are nothing to do with you, you are independant - there is nothing "fair" about contract negotiation - it's kill or be killed.

Then....

Think about WHY you are worth the rise. What have you done for the client which makes you worth more money? What have you delivered? How valuable are you to the client? How valuable are you to the agent? (do you pass them information about the client, who's doing what, where there are contract requirements, etc?) - Why should the agent, take a hit on his rate, to keep you happy?

THEN SELL IT TO HIM/HER - "I have proven XYZ qualities, I'm good for your business because of ABC, and I want to keep the relationship going. All I ask is that we address the rate element of this current contract, in order to better reflect our working relationship"

If you focus on whinging about what other people get paid, or whining because the agent is taking too much of a cut, you'll get shot down in flames.

I hope this helps.

TAV

sound advice, thank you

[jmo21]

How valuable are you to the agent? (do you pass them information about the client, who's doing what, where there are contract requirements, etc?) - Why should the agent, take a hit on his rate, to keep you happy?

<mod snip - bad language in the Professional forums is a no-no >

The contractor is the one who has managed to get the extension, not you. Your cut up front for the original term of the contract is fine, but there is nothing more you do to get the extension.