Whenever we look to bring a contractor onto a project on which we’ve never worked before, we have to discuss compensation. Unfortunately, many new contractors are not prepared to have this conversation. Anyone can discuss what he or she wants to make. What I’m talking about is being able to have that discussion in a professional, credible manner. In this Slideshare we explain how to avoid making mistakes and the best ways to approach your rate negotiation.

1. How To Lose Credibility When
Negotiating Your Rate

2. Whenever we look to bring a
contractor onto a project on
which we’ve never worked before,
we have to discuss
compensation.
Unfortunately, many new
contractors are not prepared to
have this conversation. Anyone
can discuss what he or she
wants to make.
What I’m talking about is being
able to have that discussion in a
professional, credible manner.

3. I want to provide a few tips that will
help you engage in this discussion
with most firms.

4. The compensation conversation can be an easy one, based
upon the particular assignment. The organizations with which
you will generally be dealing have a standardized way of
compensating their contractors.
Most firms know their bill rate to the client. From there, they
have an amount that they will be willing to pay in order to
maintain their targeted margin.
If you give them an hourly rate that’s allows them to earn their
standard margin, and the client thinks you’re a good fit, that’s
the extent of the conversation.

5. However, there is frequently competition for a project.
The competition will come not only from other companies with
which a firm may be competing, but it may also come from other
consultants that your firm can put on the project.
When a firm is deciding which consultant would be best for a
project, they’re taking into consideration not only the best-
qualified fit for the project, but they’re also making sure they can
hit the client’s targeted budget while maintaining a margin to run
a profitable company.

6. So, there will be many times when, based on the money you’re
looking to earn, the firm is either going to have to take less than
their standard margin or go back to the client for a higher bill
rate.
Make sense?

7. Two things I hear far too often from consultants:
When I hear these, I immediately know that said consultants have
not done their homework, resulting in lost credibility.
Let me be specific: When I ask for the first time, “What hourly rate
are you looking for?” the consultant loses credibility when he or she
says:

8. 1) “Well, a person I know is making XX, and I can do
what they do, so this is what think I should (or
want) to make.”
This statement carries very little credibility. If you follow it up
by explaining that you have the same years of experience,
have been in consulting for just as long (there is experience
gained with tenure), and have done work for just as many
clients (there is experience that is gained by doing the same
work for multiple clients over a period of time), then you will
keep my attention. But the statement, in itself, does not
enable me, or any of our firms’ account mangers, to justify a
raise in rate.

9. 2) “Well, in the past I was making XX, so I would
like to see this rate now.”
To my ears, when you say “in the past,” it means that you have
not been earning that amount recently. This occurred either
because you’re quoting a rate that you earned during peak
market conditions or the supply for your skill set has increased,
causing you to accept lower rates for recent assignments. In
either case, what someone was earning in the past does not
help build a case for why that person should be earning it
today.

10. In both cases, the person I’m speaking with has
simply not done his or her homework to build a
case as to why they should be making that rate
today.
By doing some research and presenting your
case professionally to the new firm with which
you’re dealing, you’ll have a much greater
likelihood of getting your rate negotiation off to
a positive start.

11. Learn More At HealthcareIS.com
• Ways to negotiate
• How to get the right contract
• Who to work with
• Tips for traveling consultants
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