Rate rise negotiations

**Notascooby** · 2 August 2012, 08:51

It boils down to the same answers as all the other threads...

Can you afford to walk?
Do you know your rate is below market rates? (have you searched?)
If you're on a one week contract then you should be looking anyway.
Do you want to go perm - if so then go for it.

**Pondlife** · 2 August 2012, 08:57

It sounds like you're IR35 fodder to me since they're paying you for no work on somedays.

Also you say you want a £200 a week increase ie the £5/hour. How much of a percentage is that? Are we talking about going from £10 to £15 or £90 to £95?

**MarillionFan** · 2 August 2012, 08:58

I always look to negotiate on rates rises before a renewal opportunity. How successful depends on a number of ways

Are you integral to a project?
Have you made good manangement & internal relationships?
Have you developed new skills that make you worth more?
Do you have more responsibility or your role has changed?
Have you been there a long time?
Can they do without you?

Think of it like a spiders web, have you managed to get into every nook and cranny of the organisation. The more you can expand your role in terms of responsibilities, skills & relationships then the more likely you will get a renewal and the more likely you can push for a rate increase & back up the request.

**Scoi** · 2 August 2012, 09:34

Can you afford to walk? Can't afford to be without work but the industry i'm in is quite strong at the moment
Do you know your rate is below market rates? (have you searched?) I'm a touch below what i would be offered elsewhere
If you're on a one week contract then you should be looking anyway. Boss has said he'll give me a few weeks heads up, another contractor was given 3 weeks, obviously they don't have to but i have some degree of trust in this
Do you want to go perm - if so then go for it. They couldn't afford me.

It sounds like you're IR35 fodder to me since they're paying you for no work on somedays. I'm always doing something, just not what the initial plan was, turned into a bit of an odd job man

Also you say you want a £200 a week increase ie the £5/hour. How much of a percentage is that? Are we talking about going from £10 to £15 or £90 to £95? Currently £35

Are you integral to a project? Not at the moment
Have you made good manangement & internal relationships? Very much so, office of 50 people and a team of 5
Have you developed new skills that make you worth more? Apart from knowing their technology, it would take my replacement a month or so to get up to speed
Do you have more responsibility or your role has changed? Not really
Have you been there a long time? 6 months
Can they do without you? They are looking to recruit 2 permies into the team but they aren't likely to start until October

**northernladuk** · 2 August 2012, 09:47

Originally posted by Scoi View Post

Apologies in advance for another "what would you do?" thread from a new contractor.

I'm in my first contract position and the last week of my 6 month contract, which is actually a rolling weekly contract with an estimated duration of 6 months.

Rolling weekly for 6 months? What a nightmare!!

After week 6, the project i was working on got canned. At 3 months I didn't say anything as they were effectively keeping me there just in case they got busy, it's still the same now, some weeks they need me desperately to fight fires or to go to sit in some meeting that no one else wants to attend, some they may as well send me home.
Working a project with office general manager, after a chat about work yesterday he asked why i'm not working in London for higher rates. I've also been asked to go permie. Have a good relationship with all management in the building

Would you risk raising the issue of a rate rise of £200 a week. Wait until they can't afford to lose me. Find a new position and give them the ultimatum. Speak to Agent to get them to sort it.

Well you are so far inside IR35 it is not true so I would either leave or go permie. It isn't worth yourwhile staying and risking getting caught.

Why are you inside IR35? Because the client is treating you like a permie giving you odd jobs and keeping you just in case. You have no deliverables, not set timescale and the fact manager is asking why you are permie. You can't get more inside than that regardless of what your contract review says.

If I were you I would get hold of my accountant quickly and make sure you have been accounting as inside IR35.

EDIT.. Didn't spot this

It sounds like you're IR35 fodder to me since they're paying you for no work on somedays. I'm always doing something, just not what the initial plan was, turned into a bit of an odd job man

By your own admission you inside IR35. Contractors are not odd job men, permies are. There could not be a clear example of client direction. I am sure, as many new contractors that look for advice on here do, you will ignore this bit of advice because you don't want to hear it.

**Scoi** · 2 August 2012, 09:59

It's standard in my industry for rolling contracts, i've never known anyone get longer unless they are sent abroad.

My contract was reviewed by my accountant and i was told i'm OK with it regarding IR35. The contract isn't set up for deliverables or a specific project, simply 'process engineering services'. It's typical in this industry that contractors are brought in to fill peaks in workload, get given an assignment for the day/week/month and repeated until they aren't needed any more.

**Scoi** · 2 August 2012, 10:02

Originally posted by northernladuk View Post

By your own admission you inside IR35. Contractors are not odd job men, permies are. There could not be a clear example of client direction. I am sure, as many new contractors that look for advice on here do, you will ignore this bit of advice because you don't want to hear it.

You're completely right. I assume everyone has the opinion that it'll never happen to them and then thinks it's unfair when it does.

Think i'll email the accountant to get an update of where they think i stand and what i can do to improve my position.

**EternalOptimist** · 2 August 2012, 10:29

It's a no brainer. Go for the £200 per week. They clearly value you and see you as a useful asset, using you in a variety of disparate areas. A truely useful member of any organisation. They are wondering why you dont work in London though, so they understand that the rates are higher there, and that they are paying the rate for the job.
It's clear therfore that although they like you, they are very savvy, so sit still, keep quiet and say nothing. It's a no brainer

**vetran** · 2 August 2012, 10:29

do you know what the agent's margin is?

you may well find they are taking the lion's share.

obviously you can't ask the customer directly what they are paying. But if you can find out accidentally that may indicate some wriggle room. Say if the customer is paying £70 / hour and you are paid £35 a £5 rise from the agent is not unreasonable. How cheap do you think the customer is? will they have driven the agent down?

I suspect that due to your weak bargaining position at the start the Agent may have either sold you low or taken a bigger cut.

Upsetting the Agent is less risky than upsetting the client. They are being paid a part of your cost to be the middleman.

But the big questions asked will be
Why should we give you a raise?
What benefit is it to us?
What happens if we don't?
How cheap would it be to replace you?

remember everyone else is happy with the arrangement.

The big questions you should ask yourself are
Am I worth it compared to the agent calling someone else off the bench?
Do I have an exit plan if they say no (new contract etc)
Is it worth rocking the boat?
do I use this as a 'learning opportunity' and build up new skills with a client that isn't that organised?
Do I extend my fingers into other parts of the business and look for the next opportunity, during which I can get a rate rise or at least get across to the customer I'm worth more.

Rate rise negotiations