Talent Development Centre

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All Talent Development Centre posts for Canadian technology contractors relating to pay rates.

What You Need to Consider Before Accepting a Counter Offer

Alison Turnbull By Alison Turnbull,
Permanent Placement Specialist at Eagle

Nearly all IT careers begin in a permanent employment position, as opposed to jumping right into the market as an independent contractor. Naturally, then, at some point you’ll be in a situation where you land a new job, either as an employee at another company or as a contractor, and the time comes to tell your current boss you are leaving. It’s something that most people dread. Upon giving your notice, what happens if your company comes back with a pay increase and/or a promotion? Most people’s first thought is “Wow, I’m really valued here and they’ll do whatever it takes to keep me”. But before accepting that counter offer, be sure to consider all of the facts and do your research!

There are a plethora of articles out there explaining the reasons that accepting a counter-offer is equivalent to corporate death. Statistics prove that “over 80 percent of people who accept counteroffers either leave or are let go within a year.”

It’s important to ask yourself some important questions. Why were you willing to leave in the first place? What has changed? If it was strictly compensation, it’s possible that a counter-offer makes sense, but in the vast majority of situations there are other factors at play that just aren’t resolved by earning additional pay. If you are truly a valued employee, why did it take you almost walking out the door for them to pay what you know you are worth?

In many cases, an employer will be scrambling to backfill a position within your 2-week notice period and there will inevitably be gaps that will impact their business. By offering a nominal increase to keep you, they may be ensuring they are covering their bases but working towards replacing you on their own timeline. The other important factor is that you will always be the employee who wanted to leave, so if there is a restructuring, your name will likely be the first on the chopping block.

Be sure to carefully consider all of the aspects of consideration before declining that new opportunity and be sure you are doing what is right for your career in the long run.

Discussing Your Rate with Colleagues is Rarely Ever a Good Idea

Cameron McCallum By Cameron McCallum,
Regional Vice President at Eagle

Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one. –Benjamin Franklin

I can’t count the number of times throughout my career that I have been approached by a contractor asking for an immediate increase to their hourly rate mid-contract. And when asked what has changed, the reason was not that the role had morphed into a more senior position with added responsibilities. Instead, it turned out that the contractor had discussed rates with a colleague and found out that there was discrepancy in rates and they were not earning as much as the individual sitting next to them on the project. While it is tempting to be a party to these conversations, in fact they can have serious negative consequences. Ask yourself the following questions next time you run into this scenario:

  1. Do you really have the complete story? There are so many variables that determine a contract rate and there is no way that you will likely ever have the complete story. Contract rates are based on project budgets and there can be ranges between rates for the same position. A hire early on in the process might have had access to a bigger pot but if you are hired last, there may have been less money left. Perhaps the person you are comparing yourself to had a history with the client and they were willing to pay more to get them. I’ve also seen a client hire a number of “senior” resources at a higher rate and then determine that they need to add someone but change the category to “intermediate” with lower rates. And are you completely certain that your colleague is telling you the truth. Some people feel very uncomfortable having this conversation and they may feel inclined to embellish the truth. The point is, we often end up making assumptions without having the full story.
  2. Didn’t you sign a contract? A contract is a contract and when you sign a legal document agreeing to the terms and conditions that exist within that contract, the expectation is that you will. Make sure you do the heavy lifting up front. Just as any business owner/operator should do, ask questions so that you understand completely and have considered everything about the role you are potentially signing up for, not just the qualifications needed, the end client or the duration and rate. You are running a business and ultimately are responsible for the decisions you make to accept or decline an opportunity. Can you imagine the contractor who has agreed to renovate your kitchen coming to you in the middle of the renovation demanding more money because they’ve heard that a fellow contractor got more money for doing a kitchen down the block. They wouldn’t and for good reason!
  3. Are you thinking long term? Trying to renegotiate your contract in the middle demonstrates short term thinking and rarely turns out positive. You risk destroying relationships and burning bridges, something I have witnessed countless times. Instead, before you act on your assumptions, go back to the reasons you accepted the contract in the first place — the technology, the location, the duration, whatever it was that made it attractive. Think about the valuable relationships you’ve forged with your Recruiter, the client and your colleagues on the project. Then think about what delivering a successful outcome will mean when you are pursuing your next project. The more you build your reputation as a professional and the more you are associated with positive project outcomes, the easier it is to negotiate higher rates for future contracts.

I believe that if you want to make more money, the trick is to be patient, think like an entrepreneur, be professional and good things will happen. So next time, instead of getting caught up in the moment and feeling like someone has taken advantage of you, don’t lose track of the end goal.

How Tech Rates and Salaries are Shaping Up in 2018

In the last few months, various sources have released information on the salaries and hourly rates of technology professionals. Two of those sources are Dice, which compiled data from the US Board of Labor Statistics, and Inc., who shared an infographic containing data from LinkedIn and designed by MobileMonkey.

As we enter into the final quarter of 2018, it’s worth taking a look at rates and salaries in the technology industry to understand where we’re going. Numbers from both sources are based on the United States so while salaries will not necessarily reflect Canadian salaries, the skills demand usually remains consistent. It provides an idea of which jobs are expected to produce the most opportunity, so an aspiring IT professional can better plan their future.

The 15 Highest (and lowest) Paying Jobs in Tech

The 15 Highest (and lowest) Paying Jobs in Tech

The Top 25 Most In-Demand Skills of 2018

The Top 25 Most In-Demand Skills of 2018

More Highlights from the Dice 2018 Tech Salary Report

Yesterday we shared a snippet from Dice’s 2018 Tech Salary Report, which is the result of a survey of 10,705 employed technology professionals conducted in late 2017 by the US job board. We shared a graphic that clearly demonstrated how technologies like Big Data and Cloud are continuing to be in high-demand with PaaS and MapReduce taking the cake as the highest paying skills.  But that was just the tip of the iceberg from the Dice survey. Here are a few other interesting findings that are relevant to IT contractors in Canada, even if the data is from the United States:

After Management Positions, Systems Architects and Product Managers are Making the Most Money

While the figures are in USD and actual numbers vary by geography, the chart below still reflects the top job titles in the IT world. Naturally, those managing tech and at the top of the org chart are making the biggest bucks, but Systems Architects and Product Managers top the list, with QA and support-related roles making the least amount of money.

After Management Positions, Systems Architects and Product Managers are Making the Most Money

Average Tech Salaries are Flattening Out

As the next chart shows, average tech salaries across the US were flat in 2017 and even slightly lower than they were in 2015. According to Dice, this mirrors stagnant wages the country has seen lately, but employers are offering more motivators and benefits to remain competitive.

Average Tech Salaries are Flattening Out

IT Contractors are Still Faring a Little Better Than Their Employee Counterparts

While the slight rate decrease in 2016 was also reflected in average consultant rates, they did see above average growth in 2017. As per the previous graphic, average salaries only grew 0.7% in 2017 but the chart below shows consultant rates grew 4.7%. In addition, their annual salary continues to be higher than full-time workers, but this is natural and balances out after considering the extra expenses incurred as a contractor.

IT Contractors are Still Faring a Little Better Than Their Employee Counterparts

IT Contractors are Still Faring a Little Better Than Their Employee Counterparts

Top-Paying Skills by Tech Category (According to Dice)

With the continuous advance of technology, it makes sense that the skills needed in the tech industry advance too. This analysis by Dice has shown that salaries are at a flat rate, but employers are finding incentives, like benefits and extra vacation days, to continuously attract candidates.

And nowadays a lot of tech pros are looking for jobs with benefits that allow them to maintain a better work-life balance. Having some of these skills can give you more leverage when it comes to negotiating these benefits. Dice has taken many of these most-sought after skills and found the average salaries.

Top Paying Skills by Tech Category

What Rate Should IT Contractors Charge?

Taking the leap from being a permanent employee to an independent contractor has a significant impact on your lifestyle. Technology professionals who have already made the transition are well aware of this and know that there are endless considerations before, during and after making the decision. One such consideration is the rate you will charge to clients for your services.

Choosing the right rate as an independent contractor isn’t as simple as using your salary from your full-time job. There are many costs that factor into your new rate and we’ve discussed what to charge as an independent contractor before in the Talent Development Centre.

If you don’t feel like reading the entire post, take a look at this video that quickly summarizes all of the key takeaways.

The Significance of Supply Arrangements to Contractors

Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

What are Supply Arrangements and Why Should a Staffing Agency’s Matter to IT Contractors?

Supply Arrangements: What are they and why should they matter to IT contractors?Within the staffing industry there are a dozen or more business models employed by various employment agencies.  There are the smaller staffing agencies who focus their marketing efforts on smaller companies, on very specialized niches, with a handful of very strong relationships they might have, or a combination of these.  There are the huge international recruitment agencies that tend to focus on companies with international operations and may be generalists in the sense that they support multiple lines, from casual labour to general staffing positions to professional positions to technical positions, in an attempt to serve companies that want a single vendor to handle all of their contingent workforce needs.  Between these two extremes, there are the Regional and National staffing agencies that often service or specialize in only one or two different types of hiring needs, but often limit these to provide the level of expertise/focus that means so much to their clients.  Then there are mixtures and blends of the above.

The one thing that most recruitment agencies have in common is that they work to put formalized Supply Arrangements in place with the clients that they service.  A supply arrangement is simply an agreement that defines the relationship between the agency and the company that they serve/support.  Typical to most supply arrangements are the following:

  • Term of Agreement (date range within which the agreement will be valid)
  • Definitions (define the terms used in the agreement)
  • Commercial Terms (concerning insurance, rates, timesheets and invoicing)
  • Performance (defines the service the agency will be providing)
  • Termination (terms under which the agreement might be concluded)
  • Confidential Information (how to manage and keep safe important company data)
  • Indemnity and Limitation of Liability (keeping each party “safe” and legally separate from each other)
  • Signatures/Sign-Offs/Dates/Etc.

If these look familiar, they should!  They are the very same components that incorporated contractors find in any sub-agreement that they would sign with a staffing agency. After all, we jointly enter into a company-to-company relationship, so the terms should include the same content.  In fact, a good number of the terms that a contractor finds in their sub-agreement with their staffing agency are actually “flow-down” terms from the agency’s own supply arrangements with the end client.  That is often the reason why agencies cannot be very flexible with the terms — they have committed contractually to work with their clients in certain ways and must, legally, have their sub-contractors comply to the same terms.

Despite a lot of similarities in the terms between supply arrangements, it is extremely rare that any two supply agreements would be exactly the same.  Employment agencies are required to be chameleons, adapting perfectly to the business requirements of each of their clients.  The best agencies have detailed processes to ensure their compliance across many different agreements. For example, Eagle has tools and processes dedicated to this and is part of our ISO 9001:2008 quality framework.  That big stack of paperwork that we present to contractors at the beginning of each assignment is part of that process.  In this way, we ensure that both Eagle and our sub-contractors stay “on-side” of our supply agreement Terms & Conditions.

So, why should this matter to independent contractors?  Well, that’s a question with many answers. Here are just a few of the reasons why contractors should want to work with agencies that A) create good supply arrangements with their clients and B) have strong mechanisms in place to ensure adherence to the terms (both on their side and by their sub-contractor partners):

  • Legitimacy – Having an official supply agreement in place signifies a deep level of commitment between staffing agencies and their clients. It suggests that the company is committed to using the agency and that there will be a certain level of exclusivity.  If a technology contractor is working with a recruiter that has a supply arrangement in place, you can be confident that the recruitment agency has the right to represent you and that there will be some standardization in place to manage the hiring process.
  • Access to the Best Companies/Jobs – The best staffing agencies have the best relationships. Often there is a barrier to entry for agencies who do not have supply arrangements in place with companies.  By partnering with staffing agencies with many supply arrangements, it means that you will have access to suitable roles that come available at these companies.
  • Confidence in Staffing Agency Rates – Supply arrangements often define what levels of profit are associated with the services provided (also defined), so recruiters are working off a prescribed methodology for setting their rates. Companies agree to pay staffing agencies “X” for their services should they identify, qualify and place top resources into their open roles. For contract work, that means that independent contractors set their rates “Y” and the client is charged “X+Y” (or “X x Y” if “X” is a %).
  • Risk Mitigation – Working for a recruitment agency with a supply arrangement in place ensures that the “rules of engagement” have been set out. Working with recruitment agency who has strong compliance mechanisms in place means that the recruiter will set you up for success and ensure that you are protected against potential missteps.  Be aware of the 2 to 3 page Sub-Agreement contract!  Eagle’s sub-agreements are typically 8 pages at a minimum, but depending on the flow-down terms and requirements, it could add up to 20+ pages for your review.  Ultimately, this all protects you from risk.

Eagle has numerous supply arrangements in place with many of Canada’s largest companies across multiple industry sectors and across all levels of government.  We are national leaders in Oil & Gas, Energy, Telecommunication, Education, Health Care as well as having 3 of Canada’s 5 big banks as our clients.  Our Supply Arrangements with our clients are often 80+ pages long and our sub-agreements to our sub-contractor partners are often 10+ pages long. Although more work to put in place, this is a good thing.  Through this process we ensure our contractors’ success and, in doing so, our own as well.

Next time you’re interviewing recruiters to decide on your preferred staffing agency, remember to ask how many supply arrangements they have. A response to that simple question will speak volumes in terms of their legitimacy, access to opportunities, rates and risk mitigation.

Why Share Your Compensation History with a Recruiter?

Alison Turnbull By Alison Turnbull,
National Delivery Manager at Eagle

Should You Share Your Compensation History with a Recruiter?I came across an article recently that was quite interesting to me personally, and it certainly seemed to be a contentious topic with 488 comments, 6200 likes and 1364 forwards in a few short weeks.  Apparently, (and previously unbeknownst to me), Massachusetts recently passed a new bill preventing employers from requiring salary histories from job applicants.

As a recruiter with 20 years of experience, most of that in permanent placement (in both retained and contingent firms) I found the commentary very interesting.  Most who commented very passionately agreed that recruiters had no right to ask for compensation history, and felt that the ask was ‘unethical’ and a means to get a candidate to the lowest salary possible.

It is very rare that I have had a candidate flat out refuse to share their compensation information with me, but it has happened on occasion.  It always makes me very reluctant to represent them as I find it difficult to effectively negotiate on their behalf, and it often leads me to wonder whether they are looking for a substantial increase over their current compensation that may be outside of the norm.

I always explain to candidates that the initial compensation conversation is between us, and how I choose to position that to an employer can and will be discussed and agreed upon with their input.  As much as I’m unwilling to just throw out an employer’s ‘range’, I’m as unwilling to invest the time in representing someone to a client without having a full understanding of their motivation, expectations, and employment history (including compensation).

It is not unrealistic to expect a substantial increase in some cases and if it is justified, particularly if there are extenuating circumstances like relocation, being long tenured within one organization, niche areas of expertise, an imminent increase or bonus, or just being a passive job seeker who is completely content where they currently are.  If someone’s expectations are beyond what would be considered standard, I can justify that to an employer if I have a full understanding of all considerations involved.

Obviously, it’s important for a recruiter to understand that your expectations are in line with an employer’s range before time is invested on all sides, but should the history of what you have earned be a factor of consideration?  Or should the market rates, your experience and the employers range be the only criteria?  I welcome your thoughts/input below.

Working with Your Recruiter for the Best Rate

5 Common Rate Negotiation Mistakes Made by IT Contractors

Every independent contractor wants to secure the best rate for before going into a technology project. Especially since the ethical professionals know that once a rate is agreed upon, it can’t be changed, you want to ensure you’ve done everything you can to get the highest pay.

Recruiters at staffing agencies understand that and work hard to get you a fair, market-value compensation. At the same time, it’s also their job to ensure the client is getting the best deal possible. In the end, your final rate may come down to your negotiating and when it’s done well, everyone is satisfied.

Unfortunately, all too often we see independent contractors make some mistakes while negotiating, which, at best, can see them not get the rates they want, and at worst, can see a contract get cancelled or relationships get damaged. Here are 5 common mistakes we see that can help you improve in this area.

Independent Contractor Rate Negotiation Mistakes

Cameron McCallum By Cameron McCallum,
Branch Manager 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.