When it comes to contract work, negotiation is key. A variety of factors influence what goes into someone’s working rate. However, what’s critical is that independent contractors negotiate in a way that works for them rather than undercuts their services.
Why does negotiating matter?
When contractors first start, they might feel hesitant to negotiate, excitedly taking on whatever rates are tossed their way. However, negotiating is essential — especially in highly-skilled and specialized areas of medical contracting. Negotiating and the “art” of compromising can earn you valuable work and improve your reputation.
It also shows that you’re sure of your worth. Establishing rates gives potential clients an understanding of what to expect from your experience and skill set. For example, experienced contractors or those who have specialties can easily charge more per hour than those who are starting out.
Negotiating Ultimately leads to mutually beneficial agreements between you as the contractor and your clients. It starts the relationship on the right foot, if both parties are willing to collaborate
Successfully negotiating leads to landing clients, which helps expand your contract or freelance “portfolio”/work history. You might learn a skill with a new client that enables you to value add as a contractor, thus giving you more opportunities to increase rates.
Figure out your bottom line/minimum acceptable rate.
Everyone has an absolute minimum, lowest hourly rate that you’ll accept from clients. Contractors need to determine what that looks like for them individually.
First, know what your industry rate is for your specialty/skill set. This varies by specialization.
Next, include your overhead costs. This means( any tools, uniforms, travel needed to and from the location should go into the math for your rates.
Lastly, understand your goal profit margin in relation to how many hours you plan to work in a given timeframe. For example, if you’re only able to work a few hours each week but you’re working in an in-demand role, consider charging higher rates despite working fewer hours.
When you start negotiating, start high.
Negotiating can feel intimidating for those not willing to start higher than they think they need. However, people expect you to start high. Contractors can usually demand a higher contract rate on projects that require a fast turnaround, relocation or extensive travel. Conversely, the contract rate may be lower if the work is virtual or if benefits are part of your compensation package.
When negotiating, keep client constraints in mind. Even if a client thinks you are worth more money, they may have a salary cap that prevents them from paying you more. If the client is someone you know would likely lead to full-time employment in an industry you want, you can also opt to go slightly lower to make your application more appealing
Leave room for negotiation.
Rather than selling themselves short before the discussion begins, contractors should look to open the negotiation themselves. It never has to be cut-and-dry. Use language like “my typical hourly rate is $X, but I often find that the specifics vary depending on the skills needed for an employer. I can quote a more accurate estimate if you provide me with information about this project.” This helps the potential client set the parameters of their needs while giving contractors an understanding of what will be expected of them.
Women, become comfortable with negotiating.
Studies have shown that women often negotiate more assertively for others rather than themselves. Many women are taught to be more accommodating, and more assertive traits are seen as negatives. This can put most women at a disadvantage in the workplace, but especially when it comes to negotiating working rates.
However, the more comfortable a woman is negotiating and standing her ground, the greater the returns. The University of Muenster noted that women can become more comfortable with negotiating by viewing themselves as an agent for the organization, essentially treating themselves as a third party.