Rate Renegotiation

[Lloyd1981]

Hi all,

I don't post here a lot and usually just read everyone else's posts.

Currently on a gig that has so far lasted 18 months and ends next month in March. Now I've been scoping the market for similar roles and there are plenty about. Sent CV's for a few, had one or two interview's/discussion with end clients and could potentially have some offers for similar day rates....maybe a little more, but longer commuting.

Recently though my current client (desperately) wants me to stay come March for possibly another 6 months (near the 2 year limit ). I'm happy with that but only if I can secure a rate increase as I've not asked for one since I've been here.

I guess I'm just asking what you guys think is a "not too greedy" % to ask for based on my current day rate.

I’m with a relatively large London based agency who provides many contractors to this account....and I know plenty of them are on a higher rate and their probably making a good cut out of me etc

Any help appreciated from you knowledgeable lot!

LG

[northernladuk]

Couple of things first.
18 months plus 6 months makes 24 in my book. Not nearly 24.
How do you know what the other people are on? If it is because they told you then don't believe them. No one in their right mind tells fellow contractors what they are on. Much more likely they are telling fibs so don't compare yourself to other people. Just go for what you want irrespective of them.

You don't say what you are on so there is no point trying to guess a percentage for you. Might be better adding how much you think you want on. Something between 10 and 30 quid a day and be happy if you hit the middle of that or do you think you deserve more? Remember though, all you are after is bigger cut of what the agent gets. If he is on fairly reasonable cut already then it's going to be difficult to get much out of him without making it not worth his while. If he has had you over a barrel all this time then should be pretty easy.

There is the whole aspect of the agent going back and negotiating more if the client is so desperate but I don't think that will happen. Be nice to be proven wrong though.

[Lloyd1981]

Cheers NLUK,

Yes actually your right another 6 months would take me just over the 2 year threshold and I'd be quite happy to move on then.

I don't know for definite really....as you guessed it more like the rumor mill I'd heard about . I'm currently on £420 and in all honesty was thinking of pitching in around the £500 mark but thought that might be cheeky! However I fancy going in high as I'm expecting to be knocked down.....

Appreciate the advice though.....need to send the rate request tomorrow so still a little time to mull it over.

[northernladuk]

Cheers NLUK,

Yes actually your right another 6 months would take me just over the 2 year threshold and I'd be quite happy to move on then.

I don't know for definite really....as you guessed it more like the rumor mill I'd heard about . I'm currently on £420 and in all honesty was thinking of pitching in around the £500 mark but thought that might be cheeky! However I fancy going in high as I'm expecting to be knocked down.....

Appreciate the advice though.....need to send the rate request tomorrow so still a little time to mull it over.

In that case point out the agent your operating costs have gone up. This is because you can no longer claim travel and subsistence. Don't tell the agent this, just tell him enough to justify you need a bit more money to cover the extra expense. You won't be able to claim anything for the entire 6 month period.

Why do you think you need to move on after 2 years?

I would be very surprised if you can get an £80 rise out of an agent. He would have to be proper fleecing you have that much that he can give away and still make it worth while. Do the sums on various percentages he might be taking for you and it will give you an idea how much wiggle room you have.

I can't help thinking 420 to 500 is pretty unrealistic as well. Others might disagree. That's quite a rise for not doing anything extra for your work. I would expect people would have to change level of role to be commanding that type of rate, not just squeezing the agent... but that said the agent could be on a huge margin. Really need to find out.

Have you asked the agent if he is on a fixed margin or not. Trouble is whether you can believe what he says but it might be worth a start. Am a bit surprised you have been at a client 18 months and still aren't aware of the billing rate and the like. Someone normally cocks up and reveals it at some point.

[MyUserName]

I went through this exact thing with my last renewal. I said that my expenses had gone up due to the 24 month rule. He asked how much I wanted (remember that if you say between x and y you are likely to get x as the absolute maximum) and then told me it was almost definitely too much but he will ask the client.

I ended up with a 5% rate rise (I had said between 5% and 10%). It might not be amazing but it negates how much I will lose due to the 24 month rule and then some extra.

I am happy with my rate. This close to home it is pretty good although less than I charge for gigs in London.

[BlasterBates]

Realistically you can get 5%. 10% means the market's booming and you're underpaid.

Normally to get a decent hike you actually have to go and find a new contract on that rate. Once you're getting the offers then that's your rate.

If you can accept a small increase stay where you are if you really want to get your rate up move on.

Companies are understandably normally reluctant simply to agree to big rate rises, otherwise all their contractors would do it, so the purchasing dept usually puts limits on it. In other words in many cases they would just get someone new in on principle, even if it doesn't seem justified for that one case.

In a booming market they usually have a lot to spend and the rewards are worth it to them to jack the rates up, i.e. they want to expand the business.

[Scrag Meister]

If you don't ask you don't get, and you can never negotiate upwards from the starting point. I learnt this recently by asking for 5% and getting it without any questions, Doh!


So personally I would go in at £500, if this is a reasonable market-ish rate for your skillset, experience and location and see what the client says.

[psychocandy]

In that case point out the agent your operating costs have gone up. This is because you can no longer claim travel and subsistence. Don't tell the agent this, just tell him enough to justify you need a bit more money to cover the extra expense. You won't be able to claim anything for the entire 6 month period.

Why do you think you need to move on after 2 years?

I would be very surprised if you can get an £80 rise out of an agent. He would have to be proper fleecing you have that much that he can give away and still make it worth while. Do the sums on various percentages he might be taking for you and it will give you an idea how much wiggle room you have.

I can't help thinking 420 to 500 is pretty unrealistic as well. Others might disagree. That's quite a rise for not doing anything extra for your work. I would expect people would have to change level of role to be commanding that type of rate, not just squeezing the agent... but that said the agent could be on a huge margin. Really need to find out.

Have you asked the agent if he is on a fixed margin or not. Trouble is whether you can believe what he says but it might be worth a start. Am a bit surprised you have been at a client 18 months and still aren't aware of the billing rate and the like. Someone normally cocks up and reveals it at some point.

To clarify what NLUK says. If you've been there 18 months and then get a 6 months you've got to stop claiming now. Not when it gets to 24 months.

Its when you know its going to be 24 months. So at 18, you know you're likely to be there at 24 so have to stop now. Bummer I know.

Which is why sometimes it works out better to have a 5 monther running up to month 23.

[ChimpMaster]

Two things:

1. You don't ask, you don't get. Sometimes it's enough that the client needs you to stay the extra 6 months and so would agree to paying that little more - otherwise how much hassle would they have to go through to replace you? In addition to this, the agent would rather make something out of you than lose you altogether. So - perhaps you can get the agent to stretch a few £ and the client to pay a few £ extra, to get you closer to £500.

2. Monsieur Psychocandy raises a good point: get a 5 and a half month extension rather than a 6 month one. If the client wants you beyond that then all fair and well if you can live without the expense claims for subsequent renewals.

[Lloyd1981]

Morning all!

Cheers for all the replies....really appreciated.

Advice taken around the 24 month contract ruling around claiming certain expenses as well.

Just pinged the mail off to my lovely London agency asking for the £500 with a few justifications etc.

Any increase is good of course but will let you know the outcome in the next few weeks

Cheers, LG