Reply to: Will a client refuse a rate rise out of fear it will upset other workers?

[KentPhilip]

In case you're interested, here's what happened:

I took it right to the wall, and the client manager tried to get an exception in my case from his manager. By this time I had "conceded" that I would carry on for my original rate, but would not accept any reduction.

But he failed to persuade him. And he looked pretty dejected, so I think he was telling the truth.

So what I did was suggest that he use "managers discretion" to pay me for a full shift for some out of hours work where only a little work was actually required. i.e. fudge things to make up the difference. Legal and within company rules, but only just.

He agreed to this, so I carried on working for that client.

Not an ideal solution because it did put the client in an awkward postion. But they started it by dropping my rate!

Next renewal coming up. And I wouldn't be surprised if I get canned because the critial phase of the project is now over. Still I think I took the right decision, and proved a point (to myself if no one else).


...Will lead to more time for chasing randy cleaners

[TheFaQQer]

The higher you price yourself the less you'll be wanted.

That doesn't always hold true.

If you charge a ridiculously high rate, there are certain clients who will think that for you to justify that rate, you must be the pup's nuts, so will want you.

For further details on how this works, click here.

[Robinho]

Well it's just simple market forces - surely this doesn't need to be explained to you. The higher you price yourself the less you'll be wanted. Do you think you are wanted enough?

Unless i had something else lined up though, i'd probably just be happy with the renewal.

[Wanderer]

My contract is up for renewal, and I have offered to renew it if they increase my rate by 11%. But the company has just done a permie wage freeze, and all contractors have been forced into 10% cuts. My brother thinks that the company will refuse me the rise even at risk of inconveniencing the business because of the risk that permies and other contractors will be upset and demotivated etc etc if they find out (thinking it is unfair).

Ahh, come on. If you've got the balls to ask for a 10% pay rise then you can't be worrying about what all the other poor saps are getting paid.

It's quite likely that they will refuse, when they do it's time to get negotiating with the client. Find out what the agent's cut is and if it's more than 5-7% then tell the agency that you are getting a pay rise out of their margin....

[Notascooby]

The good thing about linkedIN is that you can see what the main agents are touting.

Straight after the LBG 10% cut there was an immediate requirement for a number or BA, Infra Architects and Security SA roles...which I think was down to people refusing and being told to walk.

[BlasterBates]

Not quite the answers hoped for, but

I have a large warchest so can afford to take a risk.
I got offered a contract at the rate I am now asking for at the end of last year, so if things continue as they are then I see no reason why I shouldn't get another contract in a few weeks.

But maybe things have got worse in the market since then, and I am shooting myself in the foot. That's what the agency is suggesting, but then they are biassed.

I instinctively feel that the client is taking the P. Or at least they are playing a clever game to offset my rate rise demands, which I notified through to the agency a month ago, well before the 10% cut notified by the client.

Yes but if it takes 5 weeks to find a contract you'll earn 90% of a better rate i.e. 11 months * rate + 10% = 12 months * rate.

Why take the risk when there is no financial gain, indeed you may well be worse off if you take 3 or 4 months to find something.

Contracts are usually only 6 months so surely better to wait a month or two before the end of the contract and get a follow on at a better rates.

[jmo21]

But maybe things have got worse in the market since then, and I am shooting myself in the foot. That's what the agency is suggesting, but then they are biassed.

Shooting yourself in the foot would be standing firm on not getting a rate cut and getting kicked out the door.

Demanding 11% more in that situation is like {some analogy worse than shooting yourself in the foot}

[KentPhilip]

Not quite the answers hoped for, but

I have a large warchest so can afford to take a risk.
I got offered a contract at the rate I am now asking for at the end of last year, so if things continue as they are then I see no reason why I shouldn't get another contract in a few weeks.

But maybe things have got worse in the market since then, and I am shooting myself in the foot. That's what the agency is suggesting, but then they are biassed.

I instinctively feel that the client is taking the P. Or at least they are playing a clever game to offset my rate rise demands, which I notified through to the agency a month ago, well before the 10% cut notified by the client.

[SteelyDan]

if the OP has a valuable skillset that the client needs, but is hard to find in the market

Why shouldnt the op attempt to capitalise on his rare,expert knowledge to maximise his revenue?

I think you are making assumptions here. Maybe the OP can advise on his incredible uniqueness which merits a rate increase when other contractors are being cut.

And yes, I'm very aware of 'supply & demand', as well as the contrary position of 'pricing oneself out of the market'.

Also, yes we all need cojones in business, but also need to remain sensitive to the environment.

[Joeman]

I think (if you read the post) he also mentioned that contractors were also taking a cut, while the OP wanted to take the pi55 by asking for a rise.

"and if people do have a problem, make sure youre first to buy the beers " Like that wouldn't be a bit of a give away at all would it?

"if we all just rolled over and accepted the same rates, or worse, rate cuts, then soon all of our rates would drop off. we need people to push the rates up so we all benefit"....what are you on? Ever heard of market forces?

Have you ever heard of supply and demand?
if the OP has a valuable skillset that the client needs, but is hard to find in the market, then it doesnt matter whats happening with the permies pay rates, or the thousands of other "generic ten-a-penny" contractors.

Why shouldnt the op attempt to capitalise on his rare,expert knowledge to maximise his revenue?

And anyway, whos to say the OP isnt already being paid 11% below market rates??

No wonder rates are dropping if people like you dont have the balls to stand up and at least ask for what you're worth!!

[NotAllThere]

- we want you to take a 10% rate cut
- I'm already giving you a discounted rate; if you like I'll remove that
- erm... let's leave things as they are

OK - I was dealing with purchasing rather than an agency, but still. It worked for me.

[BlasterBates]

You probably won't get anywhere with the rate rise. The whole point of a cross the board cut is precisely that, to cut costs. Losing a contractor will incur a short term cost bit all in all I would see it would be cheaper for them to replace you than to give you a raise. Many companies have imposed 10% rate cuts so the chances are they can find someone cheaper.

[SteelyDan]

Who cares what the permies think?? contractors already earn 10x what they are on, so a rise for a skilled contractor wont hurt, and if people do have a problem, make sure youre first to buy the beers

Good on you for "testing the waters" if we all just rolled over and accepted the same rates, or worse, rate cuts, then soon all of our rates would drop off. we need people to push the rates up so we all benefit.

Done tactfully, it cant hurt to ask for a rise, they can only say NO... if they say NO, they dont have to terminate you. If they say NO, make a joke of it if you have a good relationship, then target the agent for him to cut his commision

I think (if you read the post) he also mentioned that contractors were also taking a cut, while the OP wanted to take the pi55 by asking for a rise.

"and if people do have a problem, make sure youre first to buy the beers " Like that wouldn't be a bit of a give away at all would it?

"if we all just rolled over and accepted the same rates, or worse, rate cuts, then soon all of our rates would drop off. we need people to push the rates up so we all benefit"....what are you on? Ever heard of market forces?

[psychocandy]

My contract is up for renewal, and I have offered to renew it if they increase my rate by 11%. But the company has just done a permie wage freeze, and all contractors have been forced into 10% cuts.
My brother thinks that the company will refuse me the rise even at risk of inconveniencing the business because of the risk that permies and other contractors will be upset and demotivated etc etc if they find out (thinking it is unfair).

Is he right?

Or don't companies think this is a concern at all (i.e. they'll tell me to keep my mouth shut and believe that I'll do that).

Needless to say the agency weren't happy with my offer; I could feel their anger over the phone. They said it was very unlikely the client would accept such a rise, and I was best advised to accept the 10% cut because the market is not good at the moment. Of course you can't accept what an agent says at face value as they have a vested interest.

Thanks.

So is this an 11% rise instead of a 10% cut you want?

Good luck with that one if the client is freezing/cutting - little chance there methinks.

Dont get me wrong - nothing wrong with asking for a rate rise but if it is what I think above then what you asked for is a bit of piss take.

[Joeman]

Think about it & put yourself in their shoes. What would your reaction be?

There's greed, then there's common sense. Hopefully the latter might kick in at some stage for you.

Who cares what the permies think?? contractors already earn 10x what they are on, so a rise for a skilled contractor wont hurt, and if people do have a problem, make sure youre first to buy the beers

Good on you for "testing the waters" if we all just rolled over and accepted the same rates, or worse, rate cuts, then soon all of our rates would drop off. we need people to push the rates up so we all benefit.

Done tactfully, it cant hurt to ask for a rise, they can only say NO... if they say NO, they dont have to terminate you. If they say NO, make a joke of it if you have a good relationship, then target the agent for him to cut his commision