5 tips for negotiating your contract rate

With a rising cost of living, and an increase in National Insurance looming in April, the pressure on everyone’s pocket is greater than ever. One way for contractors to lessen the financial load is to secure the maximum possible contract rate for their assignments.

Contractors are typically paid higher rates than permanent staff, largely due to a contractor having a specific set of skills that a hiring company needs for a specific project or task. But there is always room for negotiation. The trick is to know your worth and where your skills sit in the marketplace.

Strong negotiation skills don’t come naturally to many of us, but bear in mind that it’s business, not personal. If you are looking for a raise on your existing contract, or looking for the best rate on your next assignment, here are a few tips to set you on your way:

1) Know your industry rates

Gaining market insight puts you in the strongest position to negotiate, so it is important to keep up with the current contract rates in your industry, as they can change over time according to demand and the general economic climate. Rates also vary by region, with contracts in Greater London and the South commanding the highest rates.
Join forums or social media groups for contractors in your industry and talk to others in the same field to find out average contract rates for your job title and skill set.

2) Work out your worth

Once you have a general idea of the average contract rates in your industry and region, look at your own skills and job title within that. If you have a niche or highly sought-after specialism you will be in a stronger position to ask for a higher contract rate.
Also, ensure that your job title properly reflects the work you are / will be doing, as hirers often base or band rates on job title alone.

3) Make yourself more valuable

Systems, processes and technologies change over time so it is essential you stay ahead of the game for your particular industry.
Look into courses, qualifications or online training that could add value to your skill set. This not only makes you stand out from other candidates when you are up for a role, but the enhanced skills will give you leverage to negotiate higher contract rates.
4) Start with your agency
It is a good idea to always approach your recruitment agency first. Your consultant will have knowledge and view of other contractors’ rates and therefore will be well-placed to negotiate on your behalf. But even if you are negotiating via the agency, it’s helpful if you provide evidence that a higher rate is justified. (See all of the above!)

5) You don’t have to say yes to everything

It is very easy to fall into the trap of just saying yes to absolutely every contract you are offered, especially when you are just starting out. If you feel as if you are being short-changed, keep looking for something better. The flip side of this is taking a lower-paying contract with a great client to get a foot in the door and better-paying prospects with that firm.

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When it comes to contract negotiation, perhaps the ultimate place to start is to ask yourself two things: “What should my contract rate be?” and “What am I prepared to work for?” Although it is important to know your worth, stay fair and competitive with your rates, to prevent pricing yourself out of the market.

Finally, hold your nerve! You won’t sound arrogant by trying to negotiate the best price for your services. Best of luck!