Renewal Advice

[aft]

Hello,

I am less than a week from the end of a 6 month contract, the second with current client (1 year)

I have been advised from agent & client that renewal is a definite. This would make sense as I am central to an important piece of work.

I would like a raise, despite getting one last time round, itself unheard of as client usually won't negotiate until after first year.

I currently get paid around the market rate for my skills, but have a relatively large amount of responsibility - that is, I could get another job at the same (or slightly better) rate with a lot less responsibility. I am conflicted about this; on paper I am paid a fair "market rate" but in practice it does not reflect the additional pressures of my role.

There is a school of thought that holding the client's project's success "hostage" at negotiation time is unethical and that makes it difficult to ask for an increase without seeming like I am being a profiteering extortionist, which is how it could be construed, especially given that I pushed for a big raise last time (it was my first contract and I started 25% under market)

I believe the agent is on 8% fixed so it's not likely to be his share that takes a hit (although that would be my preferred outcome) As an aside about 3 months after the renewal he "casually" mentioned he dropped his margin to facilitate the last raise. I suspect he is either lying or contributed £5 a day.

I don't really know what to do. Suck it up and sign because I already had my increase, or request an additional 15% with the hope that they settle for 8? Leave for pastures green? Say that I am changing my job title to match the role and ask for 200 more a day

[Lance]

Only you know the client well enough to make that decision.
They might call your bluff and you end up without a renewal.
A lot of companies would take the view that you are trying to hostage them and get rid as a matter of principle.

I suggest an informal chat with your handler.

[malvolio]

You're already paid to do the best job possible, so what extra are you doing now to justify a raise?

Harsh but that's how your client will see it

[northernladuk]

You need to understand the chain and relationship here and think carefully about where to you want your increase to come from. You are contracted to your agent. That is the only party you should be discussing rate rises with.

The client will have a rate card and will have to go through all sorts of governance to change it so that's not going yo happen. You being important isn't enough. You are paid to do the job you are doing and that's it. The only place you can get a rise from is by cutting the agents margin. He's made his money back on getting you in do it's all profit now. Maybe you can shave a couple of percent off him but you will have to fight for it. He does this as a job so he's going to very easily bat of a wimpy request for more money. You've got to convince him you are gonna look elsewhere if you don't get it but that won't be easy. They know you won't leave a gig for a tenner a day more.

All that said if the agent is on a fixed margin then he can't flex and you are wasting his time.

Edit : dammit. Should have read the post properly. So he's on a fixed margin so you are screwed.

[WordIsBond]

A lot of these guys are against rate rises because you aren't providing any better value than you were when you started.

I say that's a load of rubbish. If you are good, it's a lot cheaper for them to bump you up 3-5% at renewal time than to replace you. My rates go up every year. I could probably get away with 7-10% without much trouble, TBH. Are they going to drop me in the hopes they get someone as good without the increase, and go through all the cost of onboarding?

So generally, I'm in favour of bumping up the rate.

That said, I'd be pretty hesitant in your case. If I got it right, you are at market rate now and you started at a 25% discount to market rate. That tells me that six months ago you got uprated by about 33%. You were at 75% of market rate, you are now at 100%, that means to the client they are paying 1/3 more than they were six months ago. And now you want more?

You'd better be phenomenal at what you do to come back six months later after that kind of an uplift and ask for more. You'd better actually have a better offer, IMO.

The furthest I'd go is to tell the agent, "There's other roles out there at the same or better pay with less responsibility. What are they offering for the renewal rate?" If the answer comes back, "The same," and you like the gig, I'd take it, personally. I might be looking for 10% more six months from now, but I wouldn't be hitting them again six months after a big uplift.

[northernladuk]

A lot of these guys are against rate rises because you aren't providing any better value than you were when you started.

I say that's a load of rubbish. If you are good, it's a lot cheaper for them to bump you up 3-5% at renewal time than to replace you. My rates go up every year. I could probably get away with 7-10% without much trouble, TBH. Are they going to drop me in the hopes they get someone as good without the increase, and go through all the cost of onboarding?

So generally, I'm in favour of bumping up the rate

You say it's rubbish but no evidence in your second paragraph backs up the first. You talk about the cost of replacing which, yes, is true but that's just holding the client to ransom. You say nothing about providing better value. If you are doing what you are brought on to do then you are not providing any extra value so surely its not rubbish at all?

[Old Greg]

Go and get that other job at the same (or slightly better) rate with a lot less responsibility.

[malvolio]

You say it's rubbish but no evidence in your second paragraph backs up the first. You talk about the cost of replacing which, yes, is true but that's just holding the client to ransom. You say nothing about providing better value. If you are doing what you are brought on to do then you are not providing any extra value so surely its not rubbish at all?

Yep, not rubbish at all. Replacing contractors isn't expensive, since the agency deal - which is what costs expensive executive effort - is already in place. Who turns up to do the work is a trivial extra cost and most of that is borne by the agency anyway.

But with my hiring hat on (one I've worn several times), I'm not going to pay you more for doing the same job unless you are reducing my net project costs. Nor is any competent budget holder.

[WordIsBond]

You say it's rubbish but no evidence in your second paragraph backs up the first. You talk about the cost of replacing which, yes, is true but that's just holding the client to ransom. You say nothing about providing better value. If you are doing what you are brought on to do then you are not providing any extra value so surely its not rubbish at all?

If you've delivered over the last year you've provided reasonable certainty that you will deliver in the coming six months, and reasonable certainty that you are able to fit in and work with people there and not throw your toys out of the pram if someone looks at you the wrong way.

That's a better value than you offered when you started. When they brought you on, they had no such certainty. They paid you £X even with the risk that you were going to be useless. 6-12 months later, that risk is removed so you are worth more to them than a new guy who has those same risks.

Add to that, you are embedded in the project and know the code. When you started, that wasn't the case. So you certainly WILL provide better value on this contract than the starting one because you are going to be far more productive in the first two weeks of this one than you were in that initial contract.

So unless you aren't professional enough to keep on providing quality work after renewal, of course you'll be giving better value than when you started.

And it isn't holding the client to ransom, either. It's normal business behaviour. Businesses often charge lower rates on services and products until they've proved themselves. And they also have costs go up all the time and pass those on to their customers. It's normal and expected.

Of course, if you aren't that good and the client can easily replace you, you have a weak position and you'd be better focusing on improving than asking for more money.

[BlasterBates]

As a long term contractor you want to maintain long term relationships, the other thing is whilst you have this elevated responsibility you are increasing your earning potential,

My advice is play the long ball game, rather than go for a few extra crumbs leaving behind "scorched earth". I would finish the project, make them happy and then go for a higher rate next time probably by switching to a new client. It is much harder to raise your rate significantly at an existing client.