Contract negotiation advice - forcing a higher rate

[ChimpMaster]

Hey all

My contract is up for renewal soon and I know for certain that the client needs me to stay on for anywhere from 3 to 6 months. That will very likely be the end of it - the client is moving to a different product and I will no longer be needed beyond this next renewal.

I have been here for almost a year now, winding the current platform down and keeping the business ticking over in the meantime. It's a tough job, possibly the toughest I have done yet, and is critical to the business, until they migrate off this product.

The rate I'm on is decent enough, but as a business it is in the interest of shareholders (i.e. me) to maximise my company's revenue (one of the 7 sins leading to Dante's 9 levels of hell no doubt). I am also bored of this role and am not learning anything new - I am here only for the money. My next role will be to go permie and learn something new.

I have enough money to tide me over for a while if I'm out of contract, but obviously I'd rather no throw away an opportunity to earn.

Given the situation, I am tempted to request a substantial rate increase, something in the order of 25%. In some small way I feel bad because I know they need me to stay on for the next 3 - 6 months, and the IT director is a nice enough chap, so I feel like I'd be screwing them over if I 'held them to ransom'. But should I care what they think? Or should my negotiation just be like "25% rate increase, or I'm sorry but I'm not particularly keen to stay" ?

I've not been in this scenario before. Are there any wise words of wisdom or experience you can share?

[andrewb]

Or should my negotiation just be like "25% rate increase, or I'm sorry but I'm not particularly keen to stay" ?

I'm a newbie at contracting (so bear that in mind when considering the value of my comment) but not at negotiating... and I'm not sure that I'd throw out the "and this is my final offer" in the first round of a negotiation (which is roughly how I would interpret your comment). It doesn't give the other party much room to counter-offer... which might be what you intend, but the feeling of being given an ultimatum never sits well and probably increases the chance of them calling your bluff.

Ask for 33% and don't mention leaving.

[malvolio]

I've said this before: you are already paid to do the best job possible. Unless you have added something significant over and above that, my reaction would be to say "OK, sorry, but bye-bye". Nobody is going to be held to ransom, especially by a minor supplier and especially in a market where thousands of contractors are out of work. Basically you're looking at getting 25% extra of bugger all.

If you can't make a business case beyond "I'm too valuable for you to lose" you're going nowhere. You have to justify the raise commercially, one element of which will be the extra costs they will incur if they have to replace you.

And 33% is simply ridiculous in the current economic client. Start from 20% and expect 10%.

[northernladuk]

I'm a newbie at contracting

Ask for 33% and don't mention leaving.

It shows......

[northernladuk]

I've said this before: you are already paid to do the best job possible. Unless you have added something significant over and above that, my reaction would be to say "OK, sorry, but bye-bye". Nobody is going to be held to ransom, especially by a minor supplier and especially in a market where thousands of contractors are out of work. Basically you're looking at getting 25% extra of bugger all.

If you can't make a business case beyond "I'm too valuable for you to lose" you're going nowhere. You have to justify the raise commercially, one element of which will be the extra costs they will incur if they have to replace you.

And 33% is simply ridiculous in the current economic client. Start from 20% and expect 10%.

Agree, 25% is just ridiculous and will be treated as such. That type of rate rise is for a different level (or location altogether) No one is going to py £500 for £400 role on principle let alone the fact it will just blow his budget out of the water. As we all know budget is king, critical or not if the budget says no it means no regardless of fall out or costs in the long run.

I would say Mal's figures are reasonable.

[ChimpMaster]

I've said this before: you are already paid to do the best job possible. Unless you have added something significant over and above that, my reaction would be to say "OK, sorry, but bye-bye". Nobody is going to be held to ransom, especially by a minor supplier and especially in a market where thousands of contractors are out of work. Basically you're looking at getting 25% extra of bugger all.

If you can't make a business case beyond "I'm too valuable for you to lose" you're going nowhere. You have to justify the raise commercially, one element of which will be the extra costs they will incur if they have to replace you.

And 33% is simply ridiculous in the current economic client. Start from 20% and expect 10%.

Point taken Mal but it's not relevant in this situation because of the dead skillset I work in. There are very few people who work on this any more and no one as good as me, I mean for this client any way. And the role I fulfil is critical to the client's business. It's a hugely complex technical environment that - as it stands - I am the only one who understands and is able to keep ticking over.

And the client knows this, and they have a huge amount of respect for my abilities (which actually makes it harder for me to push them on rate, because I respect them too). If I walked out tomorrow, they would be left in a very difficult position impacting Live operations and afffecting their clients.

But for me, personally, the role is a step backwards and I'm not gaining any experience that will help me in the future. I am there only for the money now.

I don't know if that helps explain my predicament.

[northernladuk]

Point taken Mal but it's not relevant in this situation because of the dead skillset I work in. There are very few people who work on this any more and no one as good as me, I mean for this client any way. And the role I fulfil is critical to the client's business. It's a hugely complex technical environment that - as it stands - I am the only one who understands and is able to keep ticking over.

And the client knows this, and they have a huge amount of respect for my abilities (which actually makes it harder for me to push them on rate, because I respect them too). If I walked out tomorrow, they would be left in a very difficult position impacting Live operations and afffecting their clients.

But for me, personally, the role is a step backwards and I'm not gaining any experience that will help me in the future. I am there only for the money now.

I don't know if that helps explain my predicament.

Explains your predicament perfectly but does it justify the rate rise to the client? If you feel it does then go for it but you are gonna have to be prepared to walk. Any hint you are not and they will roll over you. Not something I am very good at I will admit.

[SimonMac]

From what I read I have yet to see why you think you deserve such a substantial increase, your work load is remaining the same so the client will see this too especially as if what you say is true and they are scaling down the operation.

[Gentile]

Hey all

My contract is up for renewal soon and I know for certain that the client needs me to stay on for anywhere from 3 to 6 months. That will very likely be the end of it - the client is moving to a different product and I will no longer be needed beyond this next renewal.

I have been here for almost a year now, winding the current platform down and keeping the business ticking over in the meantime. It's a tough job, possibly the toughest I have done yet, and is critical to the business, until they migrate off this product.

The rate I'm on is decent enough, but as a business it is in the interest of shareholders (i.e. me) to maximise my company's revenue (one of the 7 sins leading to Dante's 9 levels of hell no doubt). I am also bored of this role and am not learning anything new - I am here only for the money. My next role will be to go permie and learn something new.

I have enough money to tide me over for a while if I'm out of contract, but obviously I'd rather no throw away an opportunity to earn.

Given the situation, I am tempted to request a substantial rate increase, something in the order of 25%. In some small way I feel bad because I know they need me to stay on for the next 3 - 6 months, and the IT director is a nice enough chap, so I feel like I'd be screwing them over if I 'held them to ransom'. But should I care what they think? Or should my negotiation just be like "25% rate increase, or I'm sorry but I'm not particularly keen to stay" ?

I've not been in this scenario before. Are there any wise words of wisdom or experience you can share?

As I've said before, I've never been on one of these gigs that appear to have no fixed end date and have huge extensions that are reminiscent of permiedom myself, but that said ...

Since you were expecting this contract to come to an end about this time, you've obviously got another project lined up, right? With such a competing contract offer in hand you wont ever need to renegotiate; just politely decline any extension offered and let the agency on your current contract make you a compelling counteroffer if they're interested in doing more business with you.

[malvolio]

I stand by my earlier comment, which is based on my own experience as a P&L-owning manager. If you came to my office with that approach I would say something along the lines of "What have you done' to justify the raise? I already pay you what I can afford and what we agreed, to do the job you're doing. What has changed that I should pay you more? Still, nice knowing you, I expect we'll manage. Bye".

I suggest you get real. If you're the world expert in a dead technology, your next contract may be a long way away.

You asked for advice. The advice is "be realistic" and "Prove why you're worth it". You failing to do either one so far.