Talent Development Centre

Independent Contractor Rate Negotiation Mistakes

Cameron McCallum By Cameron McCallum,
Branch ManagerĀ at Eagle

5 Errors IT Professionals Sometimes Make

5 Negotiation Mistakes Independent Contractors Sometimes MakeAs an independent contractor, you have the opportunity to interact with any number of recruiters in your local market or, if your skills are in demand, agents from all over the world. You probably find that it is not uncommon to have conversations with recruiters that you’ve never spoken to before, never mind worked with on a contract together. And more often than not, the initial conversation you are having with a complete stranger, involves a career decision with financial implications. Negotiations are difficult enough without having to enter into a rate discussion with a total stranger. Money is personal and the questions that are sometimes asked to establish parameters around rate can be uncomfortable. But rate is key to any contract discussion and you need to be prepared to enter into these discussions with Recruiters in an open and forthright manner.

Part of being prepared for these discussions is to understand myths surrounding staffing agencies and how to negotiate with them. The following are some common mistakes I’ve seen independent contractors make when negotiating with recruiters.

  1. More is better: Wrong! Trying to always increase your rate can affect your career negatively. I’ve seen candidates who play hard ball on rate and ignore the advice of the Recruiter end up pricing themselves out of the running due strictly to price. Professional recruiters will have client and market knowledge and apply that knowledge to price their candidates competitively. Every position is unique and market conditions can change rapidly (Hello Calgary!). Don’t forget as well that rate is a reflection of your seniority and professional standing. If you do manage to hit a home run and boost your rate, don’t forget that the client’s expectations can and most likely will be tied to the rate you negotiated. If you can’t deliver to those expectations, the results can be serious.
  2. I’m getting ripped off: There is no denying that contractors have developed a level of caution when dealing with Recruiters. Some recruiters in an effort to pad their commissions have unscrupulously negotiated with candidates with no concern for building mutual trust or delivering a quality service to the contractor community. I can say confidently that the staffing industry has matured and the level of professionalism has grown. But if you do find yourself with concerns about the Recruiter you are talking to, remember, you are not obligated to work with that person. If you want to perform a quick test, ask the recruiter what their philosophy around margin looks like and see if they are able to give you a satisfactory response. If the Recruiter is not comfortable disclosing this or mumbles their way through an explanation, maybe it’s time to end the conversation.
  3. They don’t need that information: If you are dealing with a Recruiter for the first time, they may be interested in what you have earned in previous contracts. The simple reason for this is to try and establish at what level you have been working and what your skillset has been paying in the market. Remember that if you exaggerate your numbers, you may be creating a set of perceptions around who and what you are and the Recruiter may make a decision that you aren’t a fit for the role they are working on. Again, a good recruiter will be able to offer you insight on the rate you have been earning and how it fits their client’s present needs. And a really good recruiter will identify when a market is ready to offer you a higher rate or conversely, when it is time to bring your number down to remain competitive.
  4. I’ll agree now but will secretly wait for a better offer: Once you’ve negotiated a rate and you have agreed to be represented by a particular recruiter that you feel comfortable with, DO NOT attempt to renegotiate days later after another Recruiter calls and offers $5/hr more. You’ve already entered into an agreement with one Recruiter who has likely submitted your resume to the client. Any Recruiter who tries to convince you to go with them for a bit more money is putting your candidacy for that role in jeopardy. Professional staffing firms and their clients want to work with contractors who exhibit honesty and integrity. Demonstrating that you are unable to commit to an agreement is a direct reflection on your business practices.
  5. Every situation is the same: Finally, as already mentioned, every situation is not the same. What one client is willing to pay for a specific skillset is not the same as another. And market conditions can change from one day to the next and impact rates. Listen carefully to the Recruiter and gauge what they are saying. Do they have a lot of knowledge of the position, the client, the market in which the contract exists and your skillset? Ask questions and if you don’t like the approach or the answers, it’s simple. Nothing is forcing you to work with that individual.

Have you made any mistakes while negotiating that you later regretted? Please share your experiences with our readers so we can all learn from each other.

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