You have successfully navigated through the choppy waters of firstly securing a great contract and secondly completing that contract. Well done! Now, it comes to discussing a new contract with the recruitment agent and the end client company. Firstly, move the conversation away from talk of ‘extensions’ or ‘renewals’ – these are not relevant terms. For example, have you ever heard of a free agent sportsperson, when their contract is ending, talk about a ‘renewal’ or an ‘extension’? The answer is simple – NEVER. The discussion is always about a NEW contract and invariably on better terms. – so why shouldn’t you do the same? You will be discussing a new contract and therefore, from your point of view, you will be discussing more favourable terms for yourself. There is nothing wrong with this, there is no need to be coy about it – you have successfully completed the contract, you have done a great job, the client is impressed – you want to talk about better terms and that means a better rate. Agents may try and deflect with the ‘extension’ talk but they generally want you to just renew on the same terms so that they keep the client happy as obviously the client company will be trying to keep their costs down, who wouldn’t? This is business after all.
It is time for you to negotiate and do the best deal you can for your new contract.
Effective arguments for a rate increase are as follows:
- You have done a great job and delivered X, Y and Z on time which meant the project was delivered on time. Therefore, you have proved your effectiveness and need a raise.
- The statement of work you delivered on meant a reduction in man hours (automation) and / or led to a cost saving of a certain £ / € amount for the company. Again, you have proved your effectiveness and need a raise.
- You have integrated well into the company, you understand the what, how and why they do what they do, and you have built effective relationships that help you get things done. They need you. There is an opportunity cost to losing you. If the company had to bring in new person to replace you it would mean a risk to the project and a missed deadline. Neither the agent (trying to build a relationship with the client) or the company (trying to get work done) will want this.
- You have reviewed the market for your skills and experience and the rate is now “X” % higher than it was 6 months ago. Therefore, you need the rate match, OR you will take a contract elsewhere. NB – this is something that you may want to consider very carefully doing because a. your bluff may be called (if it is a bluff) b. If you enjoy where you are and are on a good rate then going somewhere else, that turn out you don’t like, for some extra money isn’t worth it.
For any number of reasons, you may reach a hard stop when discussing this with your agent – the client may truly not have additional budget to fund an increase, it may be head office policy to only a rate up to a certain amount and no more or the agent may simply be totally unwilling to upset the relationship with the client company. However, you can still be creative in the process to get what you need. Here are some ideas of what you can try and renegotiate.
- You can ask the agent to take a reduction in his/her margin, so you can get more. Agents and their recruitment companies will be slow to do this and will say it simply cannot be done however it can and is done, they just do not want to do it. You can argue that as it is a new contract and they haven’t had to work for it the 2nd time around and as you have done a great job there is not much relationship management involved 2nd time around it is worth it for them to deal with it.
- If the client isn’t open to a day rate increase how about retainer paid at the end of the new contract if you stay for the full 6, 9 or however many months it is?
- No increase is possible, but the contract is far from home and you must pay for a hotel Monday-Thursday night and for flights going Monday, returning home Friday evening. Well, how about a new contract that allows work from home Monday and Fridays? You can argue you know the job so there is no need to be there 5 days a week. You then have less to pay in hotel costs and flights (they are cheaper midweek) – less costs means more net pay!
- Again, no increase is possible, so how about a longer-term contract which gives you greater security? Instead of 6 months make it 11 months?
So in summary, although you are not a provincial rugby star, the principle of being a free agent at the end of a contract applies and if you have done a good job you are perfectly entitled to seek a new contract with better terms for yourself.