Reply to: Contract extensions and rate rises

[psychocandy]

Having worked at a number of clients for a number of years in a few cases I don't understand this reasoning that the rate is set in stone forever. If I work somewhere for the next 20 years the argument "well you get a decent rate already" is not valid.

As others have said, not talking massive amounts here but there is inflation and changes to market rate. If a client refuses to move rate AT ALL over a number of years then in "real terms" you're getting less surely.

Glad to say current client agrees with me and recently OKed a 4% increase. No piss taking on my part, not a huge amount, and better than a poke in the eye.

[ContractorBanking]

The OP knows the client is paying the agent £400pd but what is not known is if that is cost-plus or cost-inclusive.

If its cost-plus, then the client should get the full £400. Lots of IB operate in this way and agent is on a fixed margin, on top of the rate.

[fool]

Then it's "What added value have you given me over and above what we are paying you for", which is when they start to struggle. Don't dismiss that approach so readily, and make sure you have good answers ready.

They probably don't respond well to that because it's a silly meme question that nobody would expect a professional to ask.

Getting a rate bump is about leverage. Adding additional value for free is a good way to lose assumed leverage, but leverage in this business is simply a case of whether it costs more or less to replace you with another resource, whether you can really get that rate elsewhere, and whether that makes up for downtime in-between and the stability effects of annoying a paying client.

That said the following will also screw you over:-

• Stubborn Human Emotions - The type of argument you're making falls under this, but this will only really stand if you bungle the request.
• Negotiation Skills - Who blinks first. Most contractors suck at this.
• Bureaucracy - Finance sets max rate, you'd need to be working with something with the political will and power to bypass this if you're asking for more than a max.
• Budget - If you push the overall budget over a max, then the project can't really be complete, which makes any leverage useless.

[malvolio]

Again with this nonsense.

What extra value does my gas & electricity provider deliver when they put their rates up yearly? What extra value does my internet provider deliver when they put their rates up yearly? etc.etc.

And besides all that, there is such a thing as inflation.

OP - You don't have to "prove" you've done something extra to justify asking for more, so go ahead and ask. There's no guarantees you'll get anything, of course, but if you don't ask, you definitely won't get anything!

Actually you are not wrong. But it does no harm to remind the OP that (a) the client has a budget, not a bottomless money tree, (b) the £400 is the agent's money and the OP only gets some of it, therefore (c) what has the agency done to warrant a pay rise from the client, other than supply a resource who is doing the best job he can already.

Inflation is a factor, of course. 2.6% on £375 is about £9 so that rise is up to £384, not the 6.25% he's looking for to reach £400.

And if he's running a business and the rate is better elsewhere, the obvious solution is to stop with the renewals and go out the real world again.

BTW the first think I ask when one of my contractors asks for a rise is "Why?", to which I get the usual answers. Then it's "What added value have you given me over and above what we are paying you for", which is when they start to struggle. Don't dismiss that approach so readily, and make sure you have good answers ready.

[billybiro]

The other and rather more crucial question is what have you done for the client to warrant them paying you more?

Again with this nonsense.

What extra value does my gas & electricity provider deliver when they put their rates up yearly? What extra value does my internet provider deliver when they put their rates up yearly? etc.etc.

And besides all that, there is such a thing as inflation.

OP - You don't have to "prove" you've done something extra to justify asking for more, so go ahead and ask. There's no guarantees you'll get anything, of course, but if you don't ask, you definitely won't get anything!

[Unix]

Ask for £400 if you think that's your worth from the agent, it's up to the agent to work out how to get that with their cut on top.

[LondonManc]

If the agent is getting 400 and giving you 375 of it, you're doing fine.

[WTFH]

The client is aware of my value and I have helped the business during a crucial time.

We aren't civil servants or employees but we do run a business and its all about the revenue that we generate. If my contract has been extended multiple times and I am not receiving the market rate then I have every right to ask. From my understanding its a very common occurence in the contracting industry. Don't ask don't get.

You have the right to ask.
The agent has the right to laugh at you.
The agent possibly also has the right to terminate your contract immediately if you have been discussing rates with the end client (check your contract)

How did you work out what “market rate” is?
How many years experience do you have in contracting?
Would you be prepared to work for free?

[ChristyP]

The other and rather more crucial question is what have you done for the client to warrant them paying you more? Civil Servants get pay rises for sticking at the job; since we aren't civil servants, or even employees, we have to justify them on the grounds of either increased value to the client or some substantial change in YourCo's overheads.

I also agree with the others: the agency is a business, not a charity.

The client is aware of my value and I have helped the business during a crucial time.

We aren't civil servants or employees but we do run a business and its all about the revenue that we generate. If my contract has been extended multiple times and I am not receiving the market rate then I have every right to ask. From my understanding its a very common occurence in the contracting industry. Don't ask don't get.

[Old Greg]

Indeed but they do vary. Have to say that 'Do you think I am able to get the full 400 or will that leave the agency with no commission for themselves? ' takes the prize though

Maybe the agency could take 400 per day and leave the contractor with nothing.

[northernladuk]

Love these sorts of threads! The naivety of some is a beauty to behold.

Indeed but they do vary. Have to say that 'Do you think I am able to get the full 400 or will that leave the agency with no commission for themselves? ' takes the prize though

[washed up contractor]

Love these sorts of threads! The naivety of some is a beauty to behold.

[malvolio]

The other and rather more crucial question is what have you done for the client to warrant them paying you more? Civil Servants get pay rises for sticking at the job; since we aren't civil servants, or even employees, we have to justify them on the grounds of either increased value to the client or some substantial change in YourCo's overheads.

I also agree with the others: the agency is a business, not a charity.

[psychocandy]

Hi all,

My contract is coming to an end on the 31th of December 2018 - I have just been granted a 3 month extension.

A little bit of background - I was initally supposed to be on this contract short term for 2 months since May but each time they have extended as they are happy with my work - in total I have had around 3 extensions now.

My question is, I want to ask for a rate rise. Do I ask the client direct as I have a good relationship with them or do I tackle the agency? I have been able to found out that the client is paying 400 a day for me and the agency initially paid me 350 a day but when I found out I managed to get them to 375. Do you think I am able to get the full 400 or will that leave the agency with no commission for themselves?

I am tempted to speak to the client direct - as previously the agency were extremely difficult to negotiate with. Any tips?

Thank you!

Why would the agency give it all to you and make nothing out of the deal?

[doconline]

Hi all,

My contract is coming to an end on the 31th of December 2018 - I have just been granted a 3 month extension.

A little bit of background - I was initally supposed to be on this contract short term for 2 months since May but each time they have extended as they are happy with my work - in total I have had around 3 extensions now.

My question is, I want to ask for a rate rise. Do I ask the client direct as I have a good relationship with them or do I tackle the agency? I have been able to found out that the client is paying 400 a day for me and the agency initially paid me 350 a day but when I found out I managed to get them to 375. Do you think I am able to get the full 400 or will that leave the agency with no commission for themselves?

I am tempted to speak to the client direct - as previously the agency were extremely difficult to negotiate with. Any tips?

Thank you!

I'm not usually on the agents side, as I rate them down there with estate agents, but I can understand why they were difficult to negotiate with. They were taking 12.5% of the contract value and have dropped that to 6.25%, which is a very good deal for you and a pretty bad one for them. If you know the client is paying £400, why would the agency agree to giving you the full rate when they have overheads / invoice factoring (possibly) etc to take into consideration, unless they have so many contractors with the client that they are making money from and the client can somehow exert pressure on the agent or want you in there as some sort of loss leader?

As Old Greg said, your best bet is going to the client and getting the rate increased.