Reply to: Unhappy with rate... what to do?

[MrRobin]

Be professional. Finish your contract and do a good job.

You're right. There are plenty of similar roles around that pay less too... I guess I was being a bit greedy and just shocked at the agency markup but in retrospect, good for them I suppose, atleast they'll want to keep me happy and I'll know what to bump my rate up to at renewal time.

I've just found out some chump I work with is getting a really low rate compared to me, and not only that, the agency are robbing him blind with an outrageous margin.

Har har very good.

[BlasterBates]

He isn't happy with it and his rate discussions can take place without involving the client at all. If the agent has other people on the site on lower margins I think it's more than reasonable to play hard with them as they have pulled a fast one. If the agent has an ongoing interest in keeping the client happy on that site then I would fancy my chances of getting the rate increased.

Why have they pulled a fast one ?

I think Golden Boy is new to the game so the Agency pushed him into the client, even though he was inexperienced because they could earn more. If he'd have gone asking the same as experienced guys then maybe they would have binned his CV, and put forward other candidates. Some clients have a favourite agency and jsut simply ask for a few CV's because they can't be bothered. Of course who knows.

The point is no-one forced Golden Boy to accept the rate. It is the contractor's responsibility to determine his own rate, not the agency.

If you buy a lawn-mower which you could have bought much cheaper elsewhere who's fault is that ?

[BlasterBates]

Hi, Hi. Hoping to get a bit of advice from all you highly experienced contractors out there.

I'm 3 months in on a 12 month contract at a rate I thought at the time was 'reasonable'. Since then, seeing several contracts of similar work, area and industry come up with a significantly higher rate coupled with finding out what rates some of my contracting friends of similar skill are on (some at same client, some not) I have lately become slightly disheartened.

I also recently found out that the agency charges the client a 45% markup on my rate (or, they take 30% cut what they charge client, depending on how you work it out) which is pretty astronomical is it not? I am now feeling like a bit of a mug!

I guess my options are

(1) Ask the client for a rate rise
(2) Ask the agency for a margin cut
(3) Hand in notice and find another contract

I feel uncomfortable with (1) as I'm only 3 months in and also they pay a decent amount to the agency. And (3) is only really a last resort as I'm not really that keen on going through the whole finding & starting the new job process right now! Would you have any advice on how best to go about asking for (2)? What are the chances?

Thanks.

Robin

Once you've signed the contract its too late. Obviously you can try, but there is no need for the Agency to cut his margin. When the renewal comes shove your rate up, leaving the agency about 10%. If the client finds out he'll cut the agent's margin taking it all himself, because he doesn't care about you (fact of life). So what ever you do make sure the client doesn't know.

When you go for a contract ask yourself what you want, when somebody offers it and you get it, be happy. It seems this disatisfaction is simply caused by knowing something doesn't actually legally concern you. Obviously knowing things increases your negotiating power.

[Xenophon]

I don't know what contract length other people here look for, but I don't look for anything longer than 6 months at the most, for two reasons - I like the possibility of negotiating an increase periodically, plus I like the option of a break if I get fed up with the work.

Same.

[TheFaQQer]

Be professional.

Finish your contract and do a good job. At the end of the day you accepted the rate and were initially happy with it. What's changed?

Just because Billy next door says he earns more than you (He may be lying) is not reason to shoot yourself in the foot. Next time ask for more, and if its a 12 month gig up your rate in the beginning.

Seconded - you accepted the rate, so your only real choice here is to give notice and walk if you're really not happy with it. If you start arguing over the rate now, you'll look a bit silly to say the least. If you walk out now, you'll look worse than that.

As others have said, you can at least do some planning now about what income to expect, and chalk it up to experience. I'm wary of accepting a year's contract which, whilst to looks great when just starting out, ties you in to current rates for a long time. If you'd signed a three month contract (with the possibility of an extension), then you'd be in a better position as far as negotiating an increase goes.

I don't know what contract length other people here look for, but I don't look for anything longer than 6 months at the most, for two reasons - I like the possibility of negotiating an increase periodically, plus I like the option of a break if I get fed up with the work.

[Ardesco]

Be professional.

Finish your contract and do a good job. At the end of the day you accepted the rate and were initially happy with it. What's changed?

Just because Billy next door says he earns more than you (He may be lying) is not reason to shoot yourself in the foot. Next time ask for more, and if its a 12 month gig up your rate in the beginning.

[thunderlizard]

It will make your day when they realise they're getting the same services from him at 1/3 your price, and give you your marching orders.

[King Cnvt]

I've just found out some chump I work with is getting a really low rate compared to me, and not only that, the agency are robbing him blind with an outrageous margin.

Really made my day that has.

HTH

[rootsnall]

Although the agency cut is something that gets discussed here regularly it really has little bearing on your situation. If you are getting a rate you are happy with ( and you were when you signed on ) it shouldn't matter what the agency is getting. Thats a matter between them and the end client.

He isn't happy with it and his rate discussions can take place without involving the client at all. If the agent has other people on the site on lower margins I think it's more than reasonable to play hard with them as they have pulled a fast one. If the agent has an ongoing interest in keeping the client happy on that site then I would fancy my chances of getting the rate increased.

[MrRobin]

You will not get the agency to drop their cut unless you can offer them an incentive to do so.

I know... That's the reason for the post

If you're willing to think long-term as opposed to short term, you can enjoy the fact that you've got another 9 months of (almost) guaranteed work ahead of you. And then negotiate a considerably better rate after your contract ends with all the experience you've gained.

I guess so... I'm just frustrated at myself that if I knew the client thinks I'm worth Rate+45% I would have asked for more in the first place

From the tone of your post I'm guessing this is your 1st or 2nd contract.

3rd, but 1st in a new area, so was unsure of going rates etc. I wasn't trying to sound annoyed/pissed off, just a bit disappointed I suppose.

Thanks for all the answers chaps!

R

[floatsy]

Hi Mr Robin

Off topic but --

As I've been doing last minute homework, I have found the tax impact is also extremely significant - so hopefully on the next contract do some prior research and take this into account. Forward planning does help all round, but I guess as newbies...you'll be experienced soon.

Cheers

[floatsy]

have a look at this and get even more depressed

http://forums.contractoruk.com/thread18376.html

OK Which chumps are getting over 600 day?

[DaveB]

From the tone of your post I'm guessing this is your 1st or 2nd contract.

Yes, you can give notice and get somthing else but that is not exactly the proffesional approach and wont do you much good if you ever want to work for that client again.

You can try and negotiate for a rate rise but it's very unlikely to happen and you have to be prepared to walk if you dont get it. The only barganing tool you have at this point is your labour and unless you are prepared to follow through on the threat to walk to away then you will get nowhere.

At a guess I'd say your agency are one of the S3 group ( based on the low rate and high margin ) and as such you have very little chance of getting anything out of them. They are notorious for taking advantage of newbie and / or naieve contractors and clients.

You were happy with the rate when you took it so just because you've found out others are earning more is no real reason to try and get out of it.

Although the agency cut is something that gets discussed here regularly it really has little bearing on your situation. If you are getting a rate you are happy with ( and you were when you signed on ) it shouldn't matter what the agency is getting. Thats a matter between them and the end client.

Take the fact that it is a 12 month contract as consolation and do some forward planning based on the fact that you know what your income for the next year will be, and chalk it up to experience. Next time round you will have a better idea of what the market rate is and be in a better position to negotiate before you accept a contract as well as having more contract experiance to put on the CV.

[Xenophon]

You will not get the agency to drop their cut unless you can offer them an incentive to do so. And you're not in a very strong position to offer an incentive given that you've signed a 12 month contract.

If you're willing to think long-term as opposed to short term, you can enjoy the fact that you've got another 9 months of (almost) guaranteed work ahead of you. And then negotiate a considerably better rate after your contract ends with all the experience you've gained.

'tis good advice.

I am never too concerned about what the agent gets. You need to be happy with your rate, what you are invoicing for.

[TheRightStuff]

have a look at this and get even more depressed

http://forums.contractoruk.com/thread18376.html