Negotiating a rise - advice needed

[psychocandy]

Interesting comments about the exchange rate. Thing is though, in reality, the UK side of the business are now, in effect, paying less for my services than they were at the beginning.

Trying to pitch it on the basis of, I'm worth it, I've saved you money, I deserve a rate increase - aint going to work. Client is skint and wont sanction something thats a 'rise'.

I was planning to approach it on the basis of, you were willing to pay me equivalent of £x a year ago, now I'm getting, £x less, not being greedy just want the same.

[nomadd]

Interesting comments about the exchange rate. Thing is though, in reality, the UK side of the business are now, in effect, paying less for my services than they were at the beginning.

Trying to pitch it on the basis of, I'm worth it, I've saved you money, I deserve a rate increase - aint going to work. Client is skint and wont sanction something thats a 'rise'.

I was planning to approach it on the basis of, you were willing to pay me equivalent of £x a year ago, now I'm getting, £x less, not being greedy just want the same.

I agree with your thinking here.

I think arguing it from the Exchange Rate angle, plus other costs that have maybe also risen for you like Hotels and Transport/Travel costs also seems fair. It sounds a lot better to argue those genuine reasons rather than "I just want more money", which could simply be interpreted as greed.

Mind you, you do say the client is skint, so all of this might be pointless anyhow. Still, no harm in trying. Just don't push too hard, or be impolite about it, if you want to retain the role should any form of rise not be agreeable.

[JamJarST]

Interesting comments about the exchange rate. Thing is though, in reality, the UK side of the business are now, in effect, paying less for my services than they were at the beginning.

Trying to pitch it on the basis of, I'm worth it, I've saved you money, I deserve a rate increase - aint going to work. Client is skint and wont sanction something thats a 'rise'.

I was planning to approach it on the basis of, you were willing to pay me equivalent of £x a year ago, now I'm getting, £x less, not being greedy just want the same.

I'm not convinced they were willing to pay you £x, they were willing to pay you €x and that hasn't changed. You say the UK side of the business are paying you less, but this is a European client and in tersm of their group figures they are paying you the same. Any increase they would give you would be an increase in real terms for the overall clients business.

[PSK]

If you do stay, you could look at the costs of hedging the currency risk and judge whether the benefits outweigh the costs?

[psychocandy]

If you do stay, you could look at the costs of hedging the currency risk and judge whether the benefits outweigh the costs?

Such as how?

[Platypus]

I want to stay. Its 20 mins from home and it looks like its a long termer

Worth £30 per day then, IMO.

but not so keen if my rate is going to erode much further.

Take it like a man! Seriously, I've been hammered over the years by the USD/GBP exchange rate. But I still enjoy my (quite easy) role so I let it pass. e.g. if I had to travel on the train each day to the smoke, it would cost me much much more than I've "lost".

And remember, rates can move the other way too. If you ask for a rise now, be prepared for a cut if rates move the other way.

Personally, if I whined to my client about exchange rate losses, I think they'd laugh in my face. And quite right too IMO. Isn't taking risks part of the new IBOYOA assessment?

[SueEllen]

Such as how?

When I've had contracts in Euros I have always worked them out on looking at the highest the pound has been against the Euro in the last 12 months before accepting them. (In other words I've turned some down.) If I can afford that then any extra when the exchange rate moves is a bonus.

BTW 20 minutes from home is a dream if you can't work at home most of the time.

[PSK]

Such as how?

For example, if you were happy to contract at a particular rate then you try to buy an exchange rate option for a sum equivalent to the total fees at that rate. If the exchange rate moves against you, the option then has a value you can realise at the end of the contract to compensate you for the change in rate. If the rate stays the same or moves in your favour, the option expires without exercising it. This has a cost but is one of the ways a 'normal' company hedges its risks. Expert advice might help but .... sharks swim in those waters and an ignorant client (I consider myself ignorant in this area) can lose money with other financial instruments. The advantage of options (unless you write them) is that you can limit the downside to the cost of the option.

[psychocandy]

When I've had contracts in Euros I have always worked them out on looking at the highest the pound has been against the Euro in the last 12 months before accepting them. (In other words I've turned some down.) If I can afford that then any extra when the exchange rate moves is a bonus.

BTW 20 minutes from home is a dream if you can't work at home most of the time.

To be honest, I did do that. But euro is at a 3 1/2 year low now :-(

[psychocandy]

Such as how?

For example, if you were happy to contract at a particular rate then you try to buy an exchange rate option for a sum equivalent to the total fees at that rate. If the exchange rate moves against you, the option then has a value you can realise at the end of the contract to compensate you for the change in rate. If the rate stays the same or moves in your favour, the option expires without exercising it. This has a cost but is one of the ways a 'normal' company hedges its risks. Expert advice might help but .... sharks swim in those waters and an ignorant client (I consider myself ignorant in this area) can lose money with other financial instruments. The advantage of options (unless you write them) is that you can limit the downside to the cost of the option.

Might be worth looking into I guess.