Getting a fair rate! Top tips for determining your day rate!
by Matt Gleeson
31/01/24Back to insights
Negotiating interim contracts can present its own unique set of challenges. It is often difficult to establish what exactly a fair and equitable rate is. A rate that reflects the value you are adding to the organisation but is also respectful of the communities you are serving.
Moreover, for us at Tile Hill it is important to be mindful of the larger effects of addressing systemic disparities in the industry. Surveys, such as the Institute of Interim Management (IIM) Survey and the Ethnicity Pay Gap Report, shed light on the prevailing pay gaps that demand attention.
This article aims to equip you with key insights for effective interim contract negotiations and how to get a fair and equitable rate that is balanced with the financial pressures the public sector faces. We delve into understanding market trends, establishing realistic rate expectations, and making the most of industry resources, all with the intent of empowering you to negotiate a rate that is not just in line with market norms but truly reflective of your professional worth.
Of course, you don’t have to navigate this space on your own. Partnering with recruitment agencies like Tile Hill offers interim workers significant advantages in pay negotiations. By tapping into our expertise and industry insight, you can enhance your understanding of your negotiating position and ensure that your compensation accurately reflects your expertise and contribution to the recruiting organisation.
The importance of market research
It is important to start with a solid understanding of the current market rates, this involves thinking about the following:
Industry Trends: Keep abreast of market trends in interim management. Are certain skills in higher demand? What are the emerging trends within the public sector that might need most action, and what specific jobs command a higher day rate as a result of the level of demand and scarcity of the required skills? Having put some thought into these types of trends can demonstrate additional professional value.
Networking: Networking remains an essential part of understanding the current market rates and conditions. Engaging with others, such as previous permanent colleagues and other interim managers means you can gather invaluable insights into the dynamics of the sector, especially in terms of compensation, contract conditions, and emerging opportunities and threats. To gain a picture on how to network effectively, you can visit our insight article here.
Leveraging Industry Expertise: Your recruitment agency should have a thorough picture of the market rate for your expertise, drawing from other similar campaigns they have run, and their network of candidates similar to you. By asking your recruiter for advice, they can offer a candid view on what you should seek as a realistic rate. When being represented by an agency, and working with them in this way, it is vital that you trust them and the transparency of their advice when agreeing a rate, and also at the offer stage. Your consultant should be experienced in having these conversations with the client to ensure your remuneration is fair and that it aligns with market standards.
Setting your rate
Always be mindful of both your ideal, as well as the minimum you would be prepared to accept , as this will help shape the conversation with recruiters and help anchor future negotiations with potential clients. .
Ideal Rate: This is what you aim for based on your skills, experience, and market rates. Remember to keep this figure as an ambitious though realistic value.
Minimum Acceptable Rate: Determine your lowest acceptable rate, considering your expenses and the market standard. Carefully consider going below this as it can devalue your service and mean you are not getting a fair rate for the value you are adding. .
Rate Benchmarking: As previously mentioned, leaning on the market knowledge of prominent specialist agencies in your field can give you a greater understanding of what relevant roles are offering. Outside of this, you can also look at job adverts as an indication of compensation similar roles are offering.
The art of confident negotiation
Negotiating is challenging; therefore it’s important to understand to feel prepared going into these conversations, but also to be aware of the resources available to you. As outlined above, maintaining a firm stance on your established boundaries is key. Clearly articulate your desired rate and remain unwavering in not accepting less than your minimum unless there is a very good reason to do so.
It is also worth noting you are under no obligation to disclose your current daily rate/salary, as this is a fluid number and should not be used as a baseline for which your future rate is based on. Some really interesting research has gone into the disadvantages of disclosing your current salary/daily rate, and an article to summarise this can be found here. Whilst this is predominantly focussed on permanent salaries the same principles apply.
In situations where rate discussions arise as part of a recruitment process, confidently direct such queries to the consultant supporting you in the process as they can act as an impartial third party that is motivated to achieve the best outcome for all parties. This not only eases immediate pressure in an interview setting, but you will also benefit from their experience in securing fair compensation.
For interim workers, understanding IR35 regulations is crucial, as it significantly impacts your income and how you are taxed. We have covered the importance of understanding how your rate may differ with IR35 and how it may differ in take home pay in a previous blog, which can be found here.
Understanding what needs to be covered by your day rate
Factoring in travel and accommodation expenses is paramount, as these costs can quickly add up and cause quite a large disparity in your take home pay between roles. Accurately estimate these costs and adjust your rate accordingly, especially if there's no separate allowance. Research typical expenses for similar roles and locations to make realistic calculations.
Contract length, a factor in negotiation
When setting rates as an interim or consultant, you should consider the length of the contract. You may feel that short-term contracts could warrant a higher rate due to factors like reduced job security, the urgency and specialised nature of the work, and the need for quick, high-value output. This could justify a premium on your skills and the flexibility you provide.
On the other hand, long-term contracts may merit a slightly lower rate given their longevity, which can prove highly valuable to you as an individual. It's key to weigh up these aspects and adjust accordingly, considering the potential long-term value of extended contracts in comparison to shorter assignments.
In summary, negotiating interim contracts requires an approach that combines personal preparation, understanding of the market, and effective communication skills. You should focus on researching current trends and rates to set realistic expectations.
Overall, the key lies in being well-informed, assertive, and adaptable. Make sure to leverage the available resources, including your agency, and by doing so you will be able to navigate interim contract negotiations with more confidence and success.
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