15% cut rate for all contractors at Goldman Sachs

[gemasp]

hi,

Just got notified by agent that Goldman Sachs implementing 15% cut rate for all contractors!!!

Non-negotiable!

Any advice?

Taking in account the time of the year I would say that I will stick with them till March/April and then will go to the market...

[BolshieBastard]

hi,

Just got notified by agent that Goldman Sachs implementing 15% cut rate for all contractors!!!

Non-negotiable!

Any advice?

Taking in account the time of the year I would say that I will stick with them till March/April and then will go to the market...

85% of something is better than 100% of nothing so, you answered your own question in your last sentence.

[BlasterBates]

hi,

Just got notified by agent that Goldman Sachs implementing 15% cut rate for all contractors!!!

Non-negotiable!

Any advice?

Taking in account the time of the year I would say that I will stick with them till March/April and then will go to the market...

Everyone else has already cut so no point, as you say try again in March/April. In my view things will start picking up again in 2013. I reckon that's when the Euro crisis will start to blow over.

[centurian]

I reckon that's when the Euro crisis will start to blow over.

Which could be like the mayor of hiroshima saying "ah, that mushroom cloud is starting to dissipate now"

[TestMangler]

Tell them to stick it up their arses.

Or accept it.

Your decision.

I've had it twice at HBOS and refused both times. One time had a new gig within 3 days, second time the non negotiable rate cut became suddenly negotiable.

It's completely down to you to decide what to do. Play hard ball and be willing to accept the consequences, or take the shafting like a man.

[TheFaQQer]

Any advice?

Either

(a) Take it
(2) Leave it

Option 2 may result in either
(i) being terminated
(ii) not getting a rate cut

(Ah, this reminds me of the "Am I going the right way" thread....)

[Nitrox]

Just got notified by agent that Goldman Sachs implementing 15% cut rate for all contractors!!!

Non-negotiable!

Any advice?

Taking in account the time of the year I would say that I will stick with them till March/April and then will go to the market...

Yeah, I got that fun Xmas news today too. To be honest it looks like market rates are down 15% on when I started my contract anyway so there's not a lot to be gained by moving elsewhere and, according to my agent at least, it ain't pretty out there at the moment.

I'd say it's the price of being a freelancer - take it and keep an eye on market rates.

[Wanderer]

15% cut rate for all contractors!!!
Non-negotiable!

Some good advice here. Basically, bend over and take it. or take it then get another job


There is another option, stick up for your business and negotiate.

There are a couple of things to note.

1. All the agent is interested in doing is forcing a rate cut on you. They don't give a tulip about your business or how important you are to the client. Don't bother negotiating with them in the first instance. Speak to your contact at the client and ask them what the hell is going on. Ask them why they are cutting your rate (ignore all this tulip about it being across the board, this is personal). Make your case for not having your rate cut or failing that, accepting a lesser cut. Talk them through what you are doing, how you've added value, etc etc. Make it clear that your business can't tolerate the rate cut. Ask how much they are paying the agency and see if you can reduce their margin down to 7% or less if it's higer than that. If you can convince the client then they will talk to the agency and tell them to leave you alone. Been there, done it. Negotiating with the agency isn't worth a tulip in my opinion.

2. If that fails then talk to the agent again. Tell them you have decided not to accept the rate cut. They will go mental at you. Stay calm and polite, remember you are dealing with the boy at the agency and they most likely have NO opportunity to vary the conditions. All they are there to do is give you the bad news and bully you into taking it. When they start ranting about escalating this then you know you are getting somewhere. DON'T be in a hurry to make up your mind or to agree anything. Take your time, call back later, sleep on it. They are trying to close a deal, stalling them will give you time to calm down and think things through. They will be desperate to sign the deal off.

3. If you can't get the client or the agency to budge then ask them exactly what they are proposing to do. For example, you may have 3 months to run on your contract with a 1 month notice period, so they will give you 1 month's notice on your existing contract and ask you to sign a new one starting in 1 month's time. If it comes right down to it and you have to accept then DON'T tell them you are accepting. Tell them to send you the paper work and you will consider your options in due course. That will make them go mental again. Insist that they give you the paperwork and you will consider it, subject to contract.

4. You get a notice of cancellation and a new contract or amendment to sign. Don't sign and return the new contract yet, once again there is no rush so sit on it for a while. Note that you must try your hardest NOT verbally accept the contract on the new terms or you are bound by it - even if it's not signed. Just say "Send me the termination notice and the new contract. I will consider my options and let you know how I am going to proceed".

5. Get your CV out there and see what's available. If nothing comes up then you can sign the new contract the day before it starts if you choose to. If something does come up then tell them that after careful consideration you have decided not to accept the new contract. If that means you leave with a few days notice then that's their problem not yours. Remember that THEY started it, not you.

I always pick my battles and only take it on if I'm prepared for a tough fight that I have a good chance of winning. Don't start it if you aren't willing to play hard ball with them or you don't have any money in the bank or your cojones are smaller than average. In this case just take the cut, and get on with it.

Good luck!

[AnthonyQuinn]

The above is a fantastic post. Really objective and detailed.

The issues that I can foresee are as follows from when i used to manage contractors.
1. This is normally a directive from the CIO or above. A program manager may be powerless / unwilling to discuss it. Unless he is willing to justify an exception to his superiors. he will only do that if you are really good and important to him. (Yeah, yeah I know everyone on this board thinks they are good. Its the program manager (or whoever the client contact is) whose opinion matters, not your own)

2. They hire an agency so that they dont have to negotiate these things with the contractor face to face. Bear in mind the PM isnt a negotiator and normally has no negotiation skills / experience.

3. Normally you are given a termination notice with an amendment which you may choose to accept / reject. your prior contract is terminated and a new one is offered. If the notice period is 4 weeks I would never give a contractor more than a week for an answer. I might need the remaining time for transition / handover if the contractor refuses the new contract.

[Nitrox]

The above is a fantastic post. Really objective and detailed.

The issues that I can foresee are as follows from when i used to manage contractors.
1. This is normally a directive from the CIO or above. A program manager may be powerless / unwilling to discuss it. Unless he is willing to justify an exception to his superiors.

Yes, knowing how GS works its very likely that any exception would require MD level sign-off. So, unless your departure would seriously affect a project that an MD somewhere cares deeply about you probably have little hope of avoiding this cut.

And, anyway, with the current market state, could you pick up a contract at a higher rate anyway? I suppose that partly depends on when and how well you negotiated your existing rate