Three ways to increase your contract income
Tuesday, 9 December 2008
There are three main ways to increase your income if you are a contractor. Each of them is outlined below.
Increase your rate
Getting an increase in the rate you receive for your time can increase your income greatly. Even an increase of $1 an hour gives you an extra $40 a week or $1840 a year. That's the equivalent of a new PC every year.
The best time to negotiate your rate upwards is when you've been offered a job and not yet accepted. If you are a candidate the client really wants, you should be able to talk a few more dollars an hour out of them. Tell your agent you've been offered another job paying a higher rate, but you'd prefer to take the one they're offering. It is rare for a client to withdraw the offer completely if you ask for a rate increase. The worst-case is likely to be that they will refuse to offer you any more money.
If you are already in a long term contract, check what other people with your skills are earning in the current market. Are you paid below market rate? If so, you should let your manager know and request a rate increase.
Unless you feel your job is in a precarious position, you should always ask for an increase at renewal time. The worst your manager can say is "no". It is often possible to ratchet up your rate a little at a time to achieve quite substantial increases in a long term contract. A $2.50 increase every 6 months will leave you with $10 an hour more in a two year contract.
Increase your cut
As discussed in the article Inside the murky world of agency margins, you should always ask your agent what their margin is. If that margin is more than about 15%, there is probably some room for negotiation. As with your rate, the best time to negotiate your cut is before accepting job offer. The agency is likely competing with other agencies to fill the position and won't want to lose a certain sale to a rival.
Contract renewal is also a good time to increase your cut. Work out exactly how much your agent has made from you and tell them that they've made a substantial profit and it's time to reduce their take.
Most agents are practised at margin negotiations, and you can expect to have a tough time getting more money out of them. Nevertheless, it is worth trying. Tell your manager that you are negotiating the agency rate and will accept the renewal, despite what the agent may be telling them. Then, refuse to agree to a renewal with your agency until they reduce their rate.
Decrease your time spent between contracts
If you earn $50 an hour while working, every week you spend unemployed is costing you $2000 before tax. A month out of work will cost you around $9000. You should try to make sure that the amount of time you spend out of work is kept to a minimum. Generally, this means keeping an eye on the market even when you are in work. The best time to set up your next job is during the last few weeks of your current one. Read about The hidden jobs market and begin to nurture your list of contacts.
Many contractors brush off calls from agents when they are working. This is a mistake, as agents prefer to help those that they get on with. If an agent thinks you're a good contractor, they will call you when they have a job you will fit. These calls are a minor inconvenience when you are working and a major convenience when you're not. Keep your agents sweet, and you will likely spend less time out of work.
Paul Knapp (email@example.com)
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Best way to increase your income
Increasing your income is easy .... abandon IT. Done - you'll save a fortune on Xanax.Gloomyshoes, 12/09/2008 05:57:55 AM
Kid - you have got it all wrong!
"there is probably some room for negotiation".
How bout increasing it with 15% by cutting that agency off entirelly?
Why do all "contractors" in Australia behave like bitches and roll over for "their" agent in stead of acting like real consultants?Davinci, 12/09/2008 06:40:45 AM
as an employer
I used to be a contractor like you guys, but as an employer it is a lot easier to use an agent than employ someone directly.
For the employer the agent represents the following
1 - Makes sure your dealing with a company, it's their responsibility to many of the insurances. Unless your running yourself as a PTY LTD company there are certain insurances I have to cover no choice.
2 - No 80 / 20 rule problem. I can utilize a contractor for an entire year and know that they are not going to have to disapear for a part of it, or do anything dodgy.
3 - Time saved in finding people, I call them up, they give me a person, I interview person, it's that easy.
There is a lot about running a business which you contractors just don't know about, and most of you wouldn't have the guts to leave your nice high paying contracts and spend 14 hour days getting an idea off the ground for the equivilent pay of $20 an hour. I have, I have also started to hire people, and I have tried hiring directly, and I have tried hiring through a recruiter. Let me tell you, I'll be hiring the next person through a recruiter. It's far less hassel.anon, 12/09/2008 08:50:43 PM
Pick a new occupation
Alternate Careers for IT Losers Gloomyshoes, 12/09/2008 11:06:01 PM
....and call up their friendly psychoanalyst!Hawkwind, 12/10/2008 06:41:43 PM
NewsBreak :: Rio-Tinto
Australian workers on tenterhooks as mining giant aims to reduce capital spending to reduce its $40 billion debt.
IF AUSTRALIA needed any further evidence the resources boom has shuddered to a halt, it came yesterday in the announcement the world's second biggest miner, Rio Tinto, would lay off 14,000 workers.
Rio Tinto refused to indicate how many of its 17,000 full-time staff and several thousand contractors in Australia would be affected by the cuts. It employs about 110,000 workers and contractors globally.
Rio Tinto slashes 14,000 jobs Hawkwind, 12/10/2008 06:53:50 PM
Survey shows jobseekers finding it tough
9/12/2008 12:30:01 PM
Australian jobseekers are finding it tougher as competition for work rises, a private online survey says.
The SEEK Employment index, which measures the ratio of online job advertisements to applications, slid for the 12th consecutive month in November, falling 2.9 index points to 59.7 points.
The index was down 45.6 per cent from a year ago.
Survey shows jobseekers finding it tough Hawkwind, 12/10/2008 07:19:52 PM
Gloomyshoes, been making good money as a student? Didn't think so. You're the IT Loser because you just couldn't cut it.Perusal, 12/11/2008 05:55:25 AM
The Ship Sank in 1999
How can you cut it in an industry that can't cut it in this country?
ICT has a massive trade deficit of billions of dollars because of the lack of productivity because of losers like you Perusal, and the agencies are completely incompetant.
It fails to employ highly experienced and productive professionals after 10 years of experience in the industry because of rampant age discrimination, leaving the industry with dumb assed Johnnie-come-latelies and fly-by-nighters like you Perusal!
You are obviously a purveyor of that discrimination.Hawkwind, 12/11/2008 07:33:06 AM
Perusal highly correct. Gloomy failure not compete make self industry big gun. Fail attitude risk make tasty meals for wall street bear '09. Maybe fail as student breaks down like Rio Tito empty mining truck with rusts and flat wheel.
Wise man once say success and fail all states of mind. Gloomy best read selfs help book make order from Santa claws.
GLGreat Leopard, 12/11/2008 07:49:48 AM
What does "cutting it" in IT really mean anyway? Performance and ability mean nothing in this game. Is it simply developing a thick hide and an acceptance that most workplaces suck, most programmers suck and most projects suck and continuing regardless?
Only the kiddies think this occupation goes anywhere. The joke will be on them in 10 or 20 years.bliiiiip, 12/11/2008 09:00:20 PM
Conservationists are warning Australia's electronic waste problem has reached crisis point.
A study by the Total Environment Centre has found there are more than 123 million electronic waste (e-waste) items in Australian landfill sites.
E-waste problem at 'crisis point'
They do the same thing with people.Hawkwind, 12/12/2008 01:35:55 AM
No longer a student
Not a student much longer losers - I'm gettin' ready for the big bucks while you IT peons feed of the bottom of the lake.Gloomyshoes, 12/12/2008 06:20:21 AM
your shitting me right?
Gloomy, your shitting me right? interns and resies on the big bucks? A friend of mine who is a resie is right now living in a small two bedroom apartment with her brother because that's all she can afford.
When you get to become a specialist you may be able to name your price, but until you do that your on the shit jobs (literally).
I really doubt you have a medical degree at all.anon, 12/13/2008 02:33:36 AM
Anon can't read.
Probably hopeless at reading resumes too.
LAUGHS HIS HEAD OFFHawkwind, 12/13/2008 05:08:08 AM
Hello stranger. I was on Monster too back in those days and known as CodeCutter then.
I am currently doing a degree in Psychology - won't be long before I graduate too.Hawkwind, 12/13/2008 08:54:29 AM
...ahhh yes and.....
.....Beyond Revenge Lies RedemptionHawkwind, 12/13/2008 05:30:32 PM
Merry Christmas man - you're one of the few that were smart enough to see the light.Gloomyshoes, 12/17/2008 08:26:34 AM
Well, this forum reads like one big dysfunctional family.
Some things never change. cyber, 12/23/2008 08:20:25 PM
For Little Leopard
Take a look at this, GL. Looks like your Indian pals are in deep s**t
Bangalore Boys run for cover Spotty, 12/31/2008 06:04:26 AM
Global recession - Cause 1
Job losses and fears of a recession could lead more foreign workers and students in the United States to move back to their home countries -- and that has some economic observers worried.
Trend of Foreign Workers Leaving Likely to Accelerate as Economy Struggles Hawkwind, 01/01/2009 08:53:39 PM
Global recession - Cause 2
Aug. 1, 2008
As the U.S. economic slump continues, American jobs are increasingly in short supply: the U.S. Labor Department reported on Friday that employers shrunk payrolls by 51,000. The decline was smaller than expected but still marked the country's seventh straight month of job losses. The national unemployment rate, meanwhile, has jumped from 5.5 percent to 5.7 percent.
But some experts say there is a bright spot on the jobs front: At least a handful of American companies who had relied on workers stationed overseas are now bringing jobs back to the United States. In addition, foreign companies are continuing to expand U.S. operations and hiring more local residents, instead of flying in foreign staff for business.
Some Outsourced Jobs Are Coming Back Hawkwind, 01/01/2009 09:01:56 PM
Thanks for these
Thanks for those articles, Spotty and Hawkwind. A very interesting read.
It's a pity that this web site is not "keeping up" with the current climate and you have to resort to posting in this topic.
We should be able to create new topics ourselves - just like any other web site in the world!
Having said that, shall we all move somewhere else? Any suggestions?Laz, 01/02/2009 01:55:27 AM
whats wrong with this site.
This site is unbelievable, it so behind the times, what about some Current topics.
Just because you are not effected by the IT climate.
Probably thinks its still 2005
There must be a new owner, probably ?n?i?n.
sdsid, 01/04/2009 07:48:03 AM
This is beginning to really suck
The job market is looking *very* bleak overseas. What we gain by by foreign workers leaving, we'll lose twice by people returning from overseas.
The dot-com bubble was a cake walk compared to this job market damnit, 01/05/2009 05:26:20 PM
Looks like leopards aren't very popular in India!
GL,watch out! Leopard Lynched in India Spotty, 01/07/2009 02:15:01 AM
Contract Income Through Agencies Are Capped
Good article ... the only challenge with implementing this is that contracting acquired through recruiters are capped!
You are capped because the agency may decide not to give you the full information about their cut or may not be willing to negotiate that much.
I have been in the contracting and consulting market for a long time ... and I have worked with lots of agencies ... Kingsley Tagbo - IT Career Boot Camp, 01/07/2009 12:01:35 PM
Indian IT fraud
There might be a push back against outsourcing following the recent case of fraud by one of the largest IT outsourcing companies in India. I think the kind of companies that outsource are pretty well doomed and horrible places to work anyway, but the more jobs in the pot the better for everyone.hi there, 01/08/2009 12:46:22 AM
This comment was removed as it contained offensive content.GloomyShoes_Daddy, 01/08/2009 03:54:49 AM
QANTAS has been burnt bad by signing up with self admitted Indian fraudsters Satyam. I hope the QANTAS managers who did this dog of a deal are being held to account.
QANTAS in Satyam Scandal
"The chairman of Satyam, one of India's largest outsourcing providers, has admitted to inflating profits for seven years"Bill, 01/08/2009 04:14:38 AM
Some of you are nothing but a sorry bunch of wankers! The only hope for you getting engaged is OTHERS actions and exogenous factors rather than your own competitiveness.
You suck BIG time! You won't have a break wether it's good times or bad times, because only thing you winy Marys do is hoping for work to land in your laps.Ikaros, 01/08/2009 06:24:53 AM
On the money
Looks like NAB and Telstra have been caught up in the multi billion dollar Satyam Indian IT scandal:
NAB and Telstra latest Satyam victims
Sounds like gloomyshoes and Hawkwind have been right on the money. The chickens are coming home to roost.Bill, 01/08/2009 08:28:40 AM
More Satyam Victims
Telstra, Qantas, Coles, NAB and Suncorp are now caught up in this 1.8 Billion dollar scandal.
Sucked in is all I can say.Kenny K, 01/08/2009 11:23:47 PM
Moderator where are you????
I placed links to the Satyam scandal on this BB weeks ago, way before these other guys, about the scandal involving the World Bank. And you removed my links, without leaving any comments behind to indicate that a post had been deleted.
How about now deleting these posts by these other guys which talk about the Satyam scandal??
Or has the scandal now become too widespread?? that removing these other postings would seem petty?
Editor: Sorry, I must have removed it by accident.Joe, 01/09/2009 12:38:48 AM
Ikaros is upset....
Too bad Ikaros!! If you can't stand the Satyam scandal and the heat coming off it, then get out of teh kitchen! Alternatively relocate to a different country, where its not so hot. Failing that... to another planet.Joe, 01/09/2009 12:41:37 AM
Ironically the word Satyam means "truth" in Sanskrit.
Guess who the London-based World Council for Corporate Governance gave the Golden Peacock Global Award for Excellence in Corporate Governance last September? None other than Ramalinga Raju.
It is interesting that the fraudulant accounting has been going on for a number of years, but no one has noticed.
Ramalinga Raju should be added to Five Harvard MBAs who wrecked the global economy
Satyam Shares Plunge After Warning of Cash Shortage Hawkwind, 01/09/2009 03:22:13 AM
Better Get Used To It
There will be many more over the next 12 months.
I wonder who is next?Hawkwind, 01/09/2009 03:28:13 AM
Sounds like gloomyshoes and Hawkwind have been right on the money. The chickens are coming home to roost.
That is why we are no longer in the game.Hawkwind, 01/09/2009 03:37:11 AM
Satyam on brink of bankruptcy
http://www.news.com.au/heraldsun/story/0,21985,24893045-664,00.htmlread_all_about_it, 01/10/2009 12:11:53 AM
One man is blame
Fraud of one man not necessary fraud by whole India. USA trillions dollars credit frauds the real story. Indian IT remain healths and growths.
RameshRamesh, 01/10/2009 08:19:50 AM
Lots of Aliens here...
Well, Joe, IT-wise I actually feel like I am on another planet...Ikaros, 01/10/2009 09:50:55 AM
It didn't happen to someone else!
I am still on holidays (back next week) and still keep my work Blackberry handy (for e-mails) so I'm up-to-date with what is going on while I am away - or so I thought.
The CEO sent an e-mail earlier today about having to deal with the "current economic climate". We are a small IT consultancy shop and his announcement was about having to let go of some staff last week.
I tried to get in touch with HR and they were kind enough to call me back. On speakerphone. With my boss.
"By the way you are no longer required".
Well, I asked for it in writing and to e-mail a copy to me. All of a sudden my (work) mobile phone and e-mail are no longer working.
How's that for professionalism!
(Note 20-20 hindsight:)Should have called later this week so that I could at least remove my junk from my phone and e-mail.
Anyway, with all of this doom and gloom (and Satyam, etc) I thought it would always happen to someone else and never happen to me.
But it did.
As you may have read in my previous posts (in other topics). Always have a "Plan B".
My new job starts tomorrow.
The bad thing is now I have to go out again and find a "Plan B" for this new role. It took me 4 months to get this one!
How lucky was that!Laz, 01/12/2009 06:13:42 AM
Wipro shares fall
Another Indian outsourcing company going down
Any sense out there yet if this is having an impact?Zzzz, 01/12/2009 05:25:53 PM
Also especially for IT workers it is very important to invest their time by learning new, exciting skills which could help meet challenges of 21 century. bstd, 01/12/2009 09:52:48 PM
Surf's UpHawkwind, 01/13/2009 07:30:10 PM
It Won't Be Long
American Labor Statitics.....
Total nonfarm payroll employment declined sharply in December. Large job losses continued in manufacturing, construction, and employment services, while health care continued to add jobs.
Payroll employment in December 2008
In December, the number of unemployed persons increased by 632,000 to 11.1 million and the unemployment rate rose to 7.2 percent. Since the start of the recession in December 2007, the number of unemployed persons has grown by 3.6 million, and the unemployment rate has risen by 2.3 percentage points.
Unemployment in December 2008 Hawkwind, 01/13/2009 11:26:53 PM
Another One Bites The Dust.....
Nortel Networks said on Wednesday it filed for bankruptcy protection in the US and Canada in an effort by the once high-flying telecom giant to weather the financial crisis and restructure its debt.
Once Canada's largest company, Nortel has been struggling since the dot-com collapse and a shifting of the telecommunications landscape. It was facing a payment of some $US107 million ($A161.49 million) in interest on its debt.
Nortel files for bankruptcy in N America Hawkwind, 01/14/2009 04:06:30 PM
Don't Outsource to India
I was talking to someone who runs a multi-million dollar business online, and he advised me "never outsource to India".
Instead, he advises entrepreneurs to outsource to the Phillippines.cyber, 01/17/2009 06:29:12 PM
Great Depression Coming
A Great Depression is coming to America and the UK. Many other countries, including Australia, will experience a recession.
New Tipping Point Coming in March, 2009 cyber, 01/17/2009 06:32:09 PM
Getting the best out of your income
I find that with the income up and down with contracting that it's good to have a nest egg. I was looking at putting 25% of my income into a high yield savings account.
I found this great financial comparison site that help me chose the best deal:
Mozo - Compare savings accounts
Remember the work can always dry up, best to be prepared for the worst.
FrankFrank DMantis, 08/02/2009 04:23:06 AM
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