Contractor Doctor: When applying for contractor roles online what rate should I give?

Dear Contractor Doctor,

I’m in the process of finding my second IT contract, this time via online job boards and agency websites. However, when applying for contracting roles online, I am sometimes asked to specify a contract rate before the application will be accepted. I’m concerned that if I don’t specify a rate, or specify the ‘wrong’ rate, the agency or client won’t consider my application.

When applying for contract roles online, what rate should I give, if asked?



Contractor Doctor says:

Ideally, contractors should start their contract search with a good idea of what their skills are worth on the contract market at the time they are seeking a new role. But in times of rapid market change, or for first time contractors, this is not always possible.

Indicating a rate when applying for contracts online is only the start of contract negotiations. Many factors could influence the final rate agreed when the contract is signed.

Whatever rate you put in the box when applying online is not set in stone and you can change it later provided you have a good reason. The goal of the application process is to get an interview. Then, after the interview when it’s clear what the role entails, you could perfectly legitimately say that your original quote was based on incomplete information and now you know what’s required, you need to alter your rate upwards.

Try to be vague when first discussing rates with an agent, whether it’s an online application or over the phone: Always try to give a range, if possible, because that eases negotiations if you need to increase your fee, particularly if you are enquiring by email rather than via an online application process that only allows a single rate figure.

Know the state of the contract market

Although it’s not always easy to do so, try to evaluate the state of market demand. If demand from clients is strong, or the contractor has a highly sought after specialist skill, then even quite high rates will generate a phone call from an interested agency.

The best way to find out what rates are being paid for specific roles is from other contractors. If you are a first-timer and don’t know any contractors, then you may end up accepting a lower rate than you deserve. So avoid signing up for long contracts first time around, so that you can renegotiate a better deal at renewal, or move on to a better contract.

Whatever rate you put in the box when applying online is not set in stone and you can change it later provided you have a good reason

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However, when there are lots of contractors chasing only a few roles, then it’s likely that the agent will choose the contractor with the best skills who is underselling themselves. Quite often, this tends to be a first-timer or a more experienced hand misjudging the market.

If the pressure is off and you can afford to take a few knockbacks, then try a higher rate and see what happens. Follow up your applications by phone and if you keep getting told your rates are too high, you know that you need to lower them when applying online.

What to say during a rate negotiation

If the original rate specified during the initial online application turns out to be way below market rate but the ‘I quoted too low based on the original ad’ tactic won’t wash, try a different approach.

When you’re talking money with the agent after the interview with the client, simply explain that you’ve had a better offer from another agent and you plan on taking that unless the rate improves. The agent has invested significant time and money into getting to the negotiation stage, and chances are the client has made it clear they want you. That means you’re in a strong position and the agent is a whisker away from doing the deal, getting a ‘bum on seat’, and moving on to their next deal.

Don’t feel guilty about playing hardball like this. Plenty of contractors get a call from an agent who says ‘the client wants you but is only prepared to pay £XXX’. In the majority of cases, this is lower than you’ve requested and a naked attempt to improve the agency margin at a cost to your rate.”

The golden rule is to say what’s required on an online application to get you an interview, and the second rule is to follow up the application by phone, because the agent gets plenty of CVs and may not even bother reading yours if you don’t chase.

Good luck with your contracting!

Contractor Doctor

Published: Tuesday, September 28, 2010

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