Contractors, do you land direct-to-client IT work, and max out your rate in the process?

In June, Hays published its UK Tech Contractor Day Rate Guide, which is a great source of information, both for IT contractors to evaluate their market rate and for organisations to ensure they are paying contractors competitively.

Of course, there’s an underlying tension here -- contractors want top rates, and clients want to pay as little as possible, although they seem to increasingly  realise they still need to able to source talent which is suitable.

Ahead of my webinar this Thursday (free to ContractorUK readers), and on how to land unadvertised tech roles that are high-paying, I want to explore here how both parties can win -- as impossible as that may sound, writes Matt Craven, founder and winning work expert at The CV & Interview Advisors.

The magic money tree nobody can lay their hands on

It’s a fact of life for many professionals and businesses that right now and for a while it seems, there’s more work to do, less time to do it, with spiralling costs, and squeezed budgets to boot.

And unless someone can find that magic money tree, or magically create a burgeoning economy without quite swingeing inflation, we’re stuck with a fairly stagnant situation where many folks are surviving rather than thriving.

There simply isn’t enough money to go around.

So, expecting organisations to increase their rates by 20%, because the cost of living has grown by 20%, simply reduces end-users’ profit by 20%.

Something has got to give and someone has to miss out.

That may be partly why the Hays Tech Contractor Day Rate Guide 2024 found that in the last 12 months, “day rate growth has remained fairly flat across multiple specialist areas, following stronger increases in recent years.”

Slice of the pie (remember, there’s more leftovers without a middle-man)

Let’s tackle it from another angle. In many contractor recruitment situations, the pie is divided into three -- the client, the contractor, and the agency.

Here, I’d like to acknowledge that a good recruiter can be of tremendous value. But it’s well worth both contractors and clients being open to a direct engagement, with no agency in the middle, which increases the available pot of money -- by roughly 20%.

Sounds obvious, doesn’t it, but in a market where rates and margins are being squeezed, I’m seeing many contractors still place too little emphasis on securing direct engagements.

Use strategic networking to win contract IT work without an agency

‘Direct-to-client engagements are all very well and good’ you might say, but how does one go about winning work, without the intervention of an agency?!

Well for starters, to pick up the fundamentals of cutting out the agent, you can join our upcoming webinar on how to access the hidden contract market here.

But to now get you started on my recommendation of landing direct-to-client gigs, get ready to hone something you already likely do – and that’s networking.

To land direct-to-client gigs at a premium, however, you cannot just settle for what I’d call ‘random networking,’ which is indiscriminate contact-building and mass issuing of LinkedIn connection invitations.

Introducing your IT contractor sales plan, whether outside or inside IR35 status

Rather, you’ve got to develop a strategic networking plan, much like a ‘Sales Plan.’

If you are operating outside IR35, you operate as a ‘true business’ so the sales plan is going to need to be company-led, repeatable, and consistent.

Even if you are working inside IR35, which I’ll go into more detail about at the webinar, you can still have an essential strategy for winning work at the highest possible rates. 

Four quick steps to hit up the hidden IT contractor jobs market

Generally speaking when trying to conjure up a lucrative piece of work from the hidden market, start by:

1. Defining your target audience i.e. freshly assess who are the decision-makers that are likely to be looking for people like you?
2. Locating these new people on LinkedIn. To not do this second stage half-hearted, IT contractors should strongly consider one of the premium LinkedIn licenses.
3. Connecting with these people and endeavouring to build a relationship by adding value, and finally:
4. Try to enter into some form of pay-for-work-related dialogue with these decision-makers.

Your network is your net worth

In addition to these four steps to hitting up the hidden IT contractor jobs market, swap out step two for your existing network, i.e. speak with your existing contacts, approach old clients.

Generally, you want to get yourself out there with people you already know and especially people who’ve paid out to you before for services -- the more conversations and interactions you have, the more likely it is that an opportunity will come your way.

In this sense, the saying that “your network is your net worth” could never be truer.

But to really bug people with this phrase once you’ve landed lucrative contract after lucrative contract (!), you’ll need three other aces up your sleeve.

Here's three aces to max out IT contractor pay when direct-to-client (includes where to pick up the fourth ace)

The first ace up your sleeve is building a ‘Thought Leadership’ strategy.

This is the term given to describe releasing your expertise online, through written and spoken channels, albeit on and from professional platforms like LinkedIn.

You should engage in Thought Leadership to strengthen your personal brand and put yourself, your insights and/or your company on a pedestal -- above other less active contractors.

The second ace up your sleeve is making sure you have a great LinkedIn profile.

Remember though, a great LinkedIn profile doesn’t mean simply filling out every field with some half-decent text!

Instead, and assuming you’re serious about direct-to-customer opportunities as an IT contractor, make sure your profile has a professional banner, a good photo, and an ‘About’ section explaining in client-terms the value you bring. You’ll also want to reference successes and organisational-benefits you’ve driven for previous clients.

The third (and for now final) ace is brevity but with a punch. In particular, I advocate using a one-page networking CV (what’s sometimes called an ‘executive biography’), rather than a typical three or four-pager. Bringing all of this into one strategic plan that you systematically execute on an ongoing basis will help you secure direct engagements, remove an over-reliance on recruitment agencies, and ultimately help you maximise your rates.

Of course, beware that the devil is in the details! Put another way, there’s a lot more to consider than just the points in this article if you really want to continually max out your rate by going direct.

The  September 12th webinar is therefore the fourth ace -- it will delve into the practicalities in much more detail, even offering a walkthrough on how you can create the one-page networking CV/exec bio.

Register, get reviewed, ready yourself for a rate rise

You can register here for the free online event this Thursday at noon.

In the meantime, reach out for a free 1-2-1 and confidential review of your LinkedIn profile, where one of my team will evaluate your profile against best-practice. We’ll also provide some sage and constructive advice. Who knows; what you’ll pick up from this free 1-2-1 could be responsible for notching up the next set of averages when Hays publishes its tech contract rate guide in June 2025, even if that does rather assume you’ll let an agency back into the chain!