In most cases (unless you are a fully independent contractor) you are employed by an agency to work as an IT Consultant for their client – usually at the client site.
In order to secure the contract agencies have to find the balance between offering the client good value for money and offering the contractor a fair rate.
When ‘value for money’ is a major factor (as with most State and Federal Government Contracts) this balancing act is crucial.
Let’s face it, even when talking about lower end contract rates we are still talking about very high numbers!
And it is these obviously high figures lure IT Professionals into contracting. This means that 9 times out of 10 a prospective contractor will agree on a rate that they are more than happy with.
Once the agent has confirmed a rate with the contractor, they workout fees and charges and present a charge rate to the client. The agent should keep this charge rate as low as possible to ensure that the client is getting the best possible price.
The initial scenario is set and all 3 parties are happy.
Then things start to go wrong as rate discussions start
A true career contract would walk away at this point saying only that they are happy with their rate.
But for the inexperienced it’s the start of a slippery slope as contractors who do not really understand what they are talking about try to compare rates and implied value to the client.
The bottom line is that what the client pays for you does not reflect your implied value to the organisation and it never should!
So we end up in a situation where Fred finds out the Jane earns $10 per hour more than he does and all hell breaks loose!
All of a sudden, Fred what a 20% pay increase and is upset because the client is paying so much more for Jane.
So what? Does it really matter? If you are happy with your rate, who cares if Jane is earning more than you? Take the emotion out of it – it’s just business!
Inevitably we end up in a situation where the agent is trying to manage an emotionally motivated contractor who is demanding an unrealistic increase.
All this does is damage the relationship between all 3 parties.
Firstly the relationship with your agent will come under pressure as you make unrealistic demand and try to hold the agent and employer to ransom.
Secondly, the relationship between the agent and the company is put under pressure as they have to try to justify why the organisation should not have to pay so much more for you.
Lastly and what few contractors consider, your reputation is tainted. Like it or not the client will look at you differently.
If you want a 20% pay rise, move contracts – simple! In this sense contracting is the same as permanent jobs. If you are in a perm role you will get a cost of living increase on an annual basis, sometimes you may get a little more one year.
What makes you think that as a contractor you deserve anything different? You are already earning more so why should you also get higher increases?
There are some simple points to take out of this:
Last of all - If you are going to call your agents or employers bluff, be prepared to join the dole queue – especially in today’s market. There is no need for agents and employers to be held to ransom. There are plenty of good people out there who will happily work for a fair contract rate.
Think about it…….
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