Below are top tips to help contractors negotiate and secure that elusive premium,
How to negotiate a rate when you are on a contract?
Have an exit strategy
You need to make a decision and prepare yourself if the client doesn’t give you a contract rate. (decide whether to stay or go).
Research the market
Make sure you research what the market is offering for your skills and experience so you can quote references points when negotiating. Always produce some evidence why you deserve a rate hike. Pro Contract Jobs is a great place to understand the current market rates (refer our rate analysis sections).
Present the case by email. Justify how your workload has increased. There is also a chance that if you certify yourself with a series of certifications. Always be professional and thankful even if you don’t get the hike.
Always approach the agency first as they have a sound idea of the climate of the client and also the greater experience in market rates.
Keep it sweet and professional with the agency and always get your agency to negotiate a rate. Also, remember that the agency has the option of adjusting the rate even is the client says no. Don’t burn any bridges with the client or the agency as you may need them in the future.
Supply & Demand
There is always a chance if you are an exceptional contractor and have a great relationship with your line management and major stakeholders of the business. So try to establish that from the beginning of your contract. It’s all about creating a value.
Have a game plan
Learn and polish your negotiation skills and some bargain points you can put forward,
The client cannot deliver this circuital piece of work without you.
You will consider leaving if you don’t pay me more.
Market rate has increased during the last.
You have another contract lined up.
You can decrease your agency commission to bring the rate high.
Understand what agency charging as a commission
An agency will typically have a markup on your rate by anything from a minimum of 12% to up to 20%. Many large firms have fixed margin agreements with their agencies of between 15% and 20%. But some smaller agencies can take a commission up to 50%.
Understand what’s the market rate for your skills and experience. The best time to negotiate a rate is once you have an offer on the table. The agent will do anything to get your signature on the paper, including discussing a rate with the client and also reducing their margin.
Understand your worth
Don’t state your current rate. If you go too high you risk putting yourself out of competition. Never discuss rate at an interview, unless it is a direct contract.
Understand what others worth
List your uniqueness (what extra skills and experiences you have compared to other candidates).
Research the market
Assess your value and keep up to date with the fluctuating industry rates. Make sure you research what market is paying is for your skills and experience so you can quote references points when negotiating. Always produce some evidence for why you deserve a better rate. Pro Contract Jobs is a great place to understand the current market rates.