Contract Renewal Rise Opportunity
This article, on contract renewal rise opportunity, is the last of a 3-part series that UKContractors is running on getting a rise from both your employer and your agent at renewal time. We published the other two earlier in the year. This is about a great contract renewal opportunity. It can be quite lucrative for UK contractors.
Read Contractor Renewal Rises Part 1 and Contractor Renewal Rises Part 2 first.
Buy Out the Agency
Another tack that you might want to attempt is to try and buy out the agency. If you know that there is plenty of work there, e.g. 2/3 years worth, and that they rate you highly, have a word with your boss about the prospects of them wanting you for an extended period.
If he or she is keen to do something, then you should approach the agency about buying out your contract. There’s no need to tell them that the client wants you for the next 2/3 years.
It happened to me once that the company that I was working for wanted me to turn permanent. They paid a one-off fee to the agency, and I worked then for the company.
I don’t see why it should be any different for contractors.
Find out first what the agent charges for one off fees (especially if they have a permanent division). This would be a good indication of the price that they might want. It’ll probably be in the range of 10-20% of one year’s salary.
Year End Bonuses
Also, find out when the agency’s year end is, and end of quarter. It is usually the time when most companies will give you a bargain. They are short-termers and want to hit or exceed this year’s targets.
If the agent smells something up and doesn’t want to deal, get in touch with their Finance Director. That’s especially near year or quarter end. He will be very keen to deal with you.
I’ve done this before when trying to get a good year end deal for software licences (that we were going to buy anyway). I phoned up the sales rep who said that the deal couldn’t be done.
Then I phoned up the Finance Director on the last day of their financial year. I said how disappointed I was that they couldn’t do this deal. He corrected me straight away, and said that it must have been an oversight. Of course the company could do it, if I faxed over the request straight away.
It’s always good to know the psychology of the people that you are dealing with, and sales reps. That’s even more so with Finance Directors who always focus on this year’s results.
In their eyes, next year can take care of itself when it comes. It is important that you get your client company on board.
They could say that they are very impressed by the quality of person that they were presented with and would like to use the agency again. That’s provided that they sort out this little matter, as they don’t want to lose you.
Contract Rate Rise
If you play your cards right you can make a mint here. This a great contract renewal rise opportunity. If you are taking a 2/3 year renewal, make sure that your fees are reviewed regularly, i.e. on a 6-monthly basis.
Don’t think that you are swapping rate rises for security as the company can get rid of you at any time if circumstances change. Also, try to get a 6-month notice period built in either way to the contract.
Whilst the company are still very keen on you (and these things can change), they might be inclined to secure your services this way).
You could be sitting on an absolute goldmine here, if you insisted, as part of the deal, that you go on their preferred supplier list for supplying staff.
This would probably take you outside IR35 as well.
This contract renewal rise opportunity comes once in every young man’s (or woman’s) life, and you’ve got to take these when they come. Of course, the average contractor would probably just ask for the agency to take a small rate cut for agreeing a long term contract.
There are other ways of skinning this cat though, as I hope you’ve seen.
To see other advice articles click on Successful Contracting
Ad – Contractor Services
All-inclusive contractor accountancy service. Best value in the UK for a personal service, no tie in periods and an accounting package tailored to you – Aardvark Accounting.
