5 top tips for increasing your earnings.
I was recently asked to write an article about negotiating rates for the website Network Locum Survival Guide, a one-stop shop providing support for locum doctors.
Now locum doctors are obviously highly trained and knowledgeable experts in their field but they are often quite uncomfortable when it comes to negotiating their rates because it simply isn’t their speciality. They spend many years training and developing their core medical knowledge and skills but next to nothing to develop their negotiation abilities.
Not surprising really, then, that the whole negotiation process can seem a bit mysterious, a dark art to them.
We can all earn more
But it struck me that locum doctors are not alone in this situation. Nearly all professionals who have to charge for their work on a contract basis or a job basis are likely to be in the same position. In fact, even permanent employees face the same problem when it comes to talking about salaries and pay-rises.
People who can be highly skilled in their specialised area can feel quite uncomfortable negotiating their rates, simply because they haven’t had the training in what is a very complicated skill.
So if you are a project manager, or I.T. contractor or management consultant working on an interim or contract basis. Or you are a lawyer or accountant or graphic designer or trainer or yoga teacher or, indeed, anyone who has to quote for their work before getting it, you may well be in the same position.
So, to help you get your best deal the next time you are negotiating your rate, we have collated 5 top tips to de-mystify the process. We will show the first two here and the rest in a following article.
Tip 1. Do your research
It is imperative to do your research and the very first thing is to know your market. Find out the typical rates for your field, for your locality and your level of experience. There are usually market surveys available or internet sites that can give benchmarks. But also ask fellow practitioners. Pay should not be a taboo subject, this tends to keep rates low.
Know the market trends too. What is happening in your field that is going to impact rates? Look at the big picture and look at the detail too. How will these trends impact you and your customer specifically.
And research your customer. What is going on in their world? How desperate are they? Get to know the problems and the opportunities they are facing. Put figures to them. If you can link your proposition more directly to these, you will be able to charge higher.
Tip 2. Ask high
Of course, your research will show a range of rates, quite a large range in some instances. And, naturally, you will want somewhere near the top of that range. But, at the same time, you don’t want to price yourself out of the job. What do you do?
In most cases, you should be the first person to mention a figure and it should be your Maximum Plausible Position (MPP). This should be the highest figure you can justify, and have your reasons ready to hand. Why should you be the first? Because it means you set the reference points. You will get a better end-result if you negotiate down from £100 p/h than if you go from £50 upwards.
If you are worried that this figure will scare them away (and only if), you can imply this figure is negotiable. You can say things like “Typically, my rate is £90 p/h” or “I know some jobs in the area go for up to £100 p/h, so I’d be looking around the £90 mark”. These imply your MPP is a starting point for the conversation and is open to discussion.
As well as knowing your maximum, you also want to have a clear idea of your minimum. What is the lowest figure you would be prepared to work for? And look at the range in between – where on that range are you starting to smile more and where are you beginning to get a bit grumpy? Its important to know what you feel about each possible price point. If you are doing the negotiation over the phone, it is worth having a rate card written down next to you for reference.
And the best way to have a high minimum and also a well-justified maximum, is to have a strong Plan B so make sure you are looking at other opportunities at the same time. It also helps to build up some cash reserve so you aren’t desperate and having to take the first job at hand. When I first set up as an independent consultant, I was offered my first contract at a very good rate. As soon as I finished the conversation, the phone rang again and I was offered another contract elsewhere. The next day, a third contract came in. As a result of having more than one option available to me, I was able to double my rate in the course of a week.
Now, if you start the discussion with your MPP, they may say that’s too expensive. Fine, ask them their budget and (if it is above your minimum) you will probably end up at the top of their budget range. What is more, any concession you make, make sure you get something in return to justify it.
These two tips alone should give you a great start to getting your best rate. But there is a lot more you can do and we will look at this in the next article.