Contract renewal, to ask for a rise? How?

[MiniMani]

Hi folks,

I have done a bit of a search on this but not found anything specific... I am shortly coming to the end of my contract, and have already brought up the subject to the manager about my potential contract renewal, although he is pushing for me to go perm, he has mentioned that he would be inclined to renew my contract.

I am on a good rate of 560 a day, however the role was actually advertised at a lot higher (800ish), which I found out afterwards. They also put me forward to the clientco at 625 a day, and the agency came back to me and offered me 560, which I took. This is my first contract so I was a little naive and accepted. Now that I look back, I have a feeling the client were completely happy with offering me 625 but the agency just fleeced me a bit.

So - if I am renewed, should I approach the agency and tell them I want an increase? How do people usually approach this situation? Do you just ask for say 15% increase? I'm aware the agency may push back on this, so what could I say to hold some weight? i.e. would they be swayed if I mentioned other contracts offering higher rates, or the fact that they are pushing for me to go perm on a relatively good salary?

Thank you for your responsesin advance. Sorry if this question has already been asked but as I say I couldn't find the specific answer I was looking for.

[SuPaStA]

I always thought the "putting you forward at x amount" was BS by the agency as they have already agreed the fixed per day amount with the client....

[jmo21]

There have been loads of threads on this....

You have to have something tangible that shows you deserve the raise, not just "I want X raise" because I think you fleeced me last time. Some place may cave to this, but not many I'd guess.

The only way to force it is by being prepared to say "I want X raise or I will not extend my contract", but obviously, you would have to be prepared to leave.

So if you are confident they won't call your bluff by letting you walk, or you could get another contract easily.

The more niche your skillset is the better. The agency might be happy for you to go, so they can get in someone they can more money out of.

[Support Monkey]

Just cos there are other jobs advertising more money does not mean you would get one, the better tack would be to advise the agancy (negotiations need to be with the agency not the client) of all the good work you have done and justify to them why you think you are worth more

[craig1]

The key for me when it comes to renewals is getting information:

- Can you easily find out how much the client pays the agency? If not, don't worry too much.
- Are you expendable? Would the client be pissed if you walked due to the agent messing about?
- Are you happy with the rate you're getting and are you enjoying the work?

If I have the information on how much the client pays the agency and I'm not fussed whether I stay or not then I'll tell the agency that I know the rate and I want to renegotiate at 10% margin. They've had their bonus for finding and placing me, it's straight contract administration from renewal. I'd go to 15% if I liked the role, wanted to stay and I felt the agent wouldn't budge. If you threaten to walk if they don't give you a raise then be prepared to walk, don't bluff.

If I couldn't get the information on client rates, I wasn't fussed about the role and I felt the agency were over-charging me I'd ask for a gut-feel rate rise to what I think the market rate is for the role, my experience and my impression of how much the client likes me. Even if I really liked the role and didn't want to jeopardise it, I'd still ask for a rate rise letting them know that they've had their finder's fee bonus.

Don't be a primadonna about the whole thing but remember that it's a three way relationship: you, the agent and the client and it should be fair for all three. Far too often the more aggressive agents think they can do as they see fit, stiffing both you and the client.

[prozak]

difficult one.

do you know the agencies margin?

are you sure the end client has the appetite to pay more?

How long have you been there?

Why were you happy with the rate initially but now decided you want more?

Pushing the end client to pay more can make you look like a "greedy contractor". Some companies have no problem with contractors and some others get contractors in only because they have no other option. If your end client is asking about permie he may be the latter and may not look kindly on you asking for more money.

whenever I have asked for more money it has always been when I know the agencies margins. More than happy for agencies to have 10% margin, anything above that is negotiable IMHO.

and I made clear to the agency that I was asking for more of their margin not a pay rise from the end-client.

[malvolio]

I go wth jmo21's viewpoint. As a general rule I wouldn't authorise a rate rise unless the contractor has delivered significant extra value, either in delivery or cost saving. I'm already paying you to do the best job you can, my margins are fixed (and these days, usually reducing) and I'm not spending money I can't cover off.

Just as an example from an earlier gig, the markup between my day rate and my charge-out to the end client is around 120%. However, the net profit to the cost centre each day is only in double figures and would disappear if I upped my charges by £50 a day. There's lots of overheads most of us never get to see.

I had someone demand "More money or I walk" once. He walked, rather quicker than he anticipated doing. Make sure you have all yours ducks lined up before starting that approach. You are, at the end of the day, a disposable commodity.

[prozak]

So - if I am renewed, should I approach the agency and tell them I want an increase? How do people usually approach this situation? Do you just ask for say 15% increase? I'm aware the agency may push back on this, so what could I say to hold some weight? i.e. would they be swayed if I mentioned other contracts offering higher rates, or the fact that they are pushing for me to go perm on a relatively good salary?

To answer this bit specifically.

- ask for higher than whatever you want and let them negotiate.

- the agency get a payout if you go permie. so that wont convince them.

[craig1]

I go wth jmo21's viewpoint. As a general rule I wouldn't authorise a rate rise unless the contractor has delivered significant extra value, either in delivery or cost saving. I'm already paying you to do the best job you can, my margins are fixed (and these days, usually reducing) and I'm not spending money I can't cover off.

Just as an example from an earlier gig, the markup between my day rate and my charge-out to the end client is around 120%. However, the net profit to the cost centre each day is only in double figures and would disappear if I upped my charges by £50 a day. There's lots of overheads most of us never get to see.

I had someone demand "More money or I walk" once. He walked, rather quicker than he anticipated doing. Make sure you have all yours ducks lined up before starting that approach. You are, at the end of the day, a disposable commodity.

Going by the original post as an example: I'd assume that the agent are billing the client around £700 p/d (gut feel) meaning a £140 p/d markup. 10% of that £700 is £70 (simplistic, I know). If an agency cannot survive doing contract maintenance for £70 p/d on a long-ish term contract then they're probably inefficient. If it's weekly invoice/payment terms then 15% to include higher factoring costs for smaller agencies but even then if they can't make a net profit out of me by taking £105 p/d then there's something drastically wrong.

If the client really wants me and I like the job then I expect the agency to play fairly with us both. If they want to sit in the middle stiffing us both then why should I sit back and let them? The original rate includes their bonus for finding and placing me, beyond that is pure contract maintenance. For me, it's like a contract phone, I'm happy to pay the extended rate to cover my "free" phone but when the contract is up they either move me to a reduced rate, give me a substantial benefit (new phone of similar or greater quality) or I swap suppliers.

[JamJarST]

Hi folks,

I have done a bit of a search on this but not found anything specific... I am shortly coming to the end of my contract, and have already brought up the subject to the manager about my potential contract renewal, although he is pushing for me to go perm, he has mentioned that he would be inclined to renew my contract.

I am on a good rate of 560 a day, however the role was actually advertised at a lot higher (800ish), which I found out afterwards. They also put me forward to the clientco at 625 a day, and the agency came back to me and offered me 560, which I took. This is my first contract so I was a little naive and accepted. Now that I look back, I have a feeling the client were completely happy with offering me 625 but the agency just fleeced me a bit.

So - if I am renewed, should I approach the agency and tell them I want an increase? How do people usually approach this situation? Do you just ask for say 15% increase? I'm aware the agency may push back on this, so what could I say to hold some weight? i.e. would they be swayed if I mentioned other contracts offering higher rates, or the fact that they are pushing for me to go perm on a relatively good salary?

Thank you for your responsesin advance. Sorry if this question has already been asked but as I say I couldn't find the specific answer I was looking for.

Seems perfectly reasonable to me, if you got all the £625 how would the agency make any money?