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    How much are you worth? Setting your day rate as an IT contractor

    “Hard-working, talented IT contractor, day rate = £XXX. Seeking attractive prospects for potential ongoing relationships. Drinks and maybe more?”

     

    Promoting yourself as an IT contractor isn’t too far from placing a personal ad on a dating site. The major difference is that “drinks and maybe more” isn’t the outcome you’re hoping for; it’s work.

    (Actually, scratch that; if the client is buying, by all means get boozy with them. Just make sure the ‘maybe more’ translates to a work contract afterwards!)

    But how do you get the clients to want to meet in the first place? You’ll obviously have the talent for the job, but is your day rate hitting the sweet spot? As freelance contractors, you’re always walking that delicate tightrope between charging too much and selling yourself short.

    Love at first sight

    It reminds us of the The Office’s David Brent, who when filling out an online dating form says: “You can’t put ‘very attractive’. It looks like arrogance, doesn’t it? Put attractive. She’ll see me.”

    If you sell yourself short like this when it comes to your day rate though, not only are you letting your clients off for cheap, but you might come across as less skilled than you are and not even get the interview. Alternatively, you might get a meeting but then find you’re actually overqualified for the position.

    Then again, if you do put ‘very attractive’ – or in this case, quote a day rate that’s too high – you could end up putting off the clients from the get go. The client needs to approve of your day rate at first sight, or they could move straight past it.

    Ultimately you want to ensure you’re getting paid fairly for what you can bring to the table, and yet you also want to make sure you secure the work by charging an affordable rate. It’s a delicate balance, and one that many IT professionals struggle with. Just how much are you worth?

    Plenty of fish to research

    Permanent positions are often advertised with salaries – or at least salary guidelines – attached. This makes it much easier for you to know whether you’d be suited for the role. If the salary seems to be the next logical step for you to make in your career, and you have the required skills they’re looking for, you can apply with confidence.

    Unfortunately this isn’t a luxury granted to many IT professionals when they’ve gone contract. Unless potential clients have quoted ‘market rate’ as the amount they’re willing to pay, it will be up to you to provide them with a quote. Besides, market rates for IT professionals will differ drastically depending on the skills required for the project.

    Like you though, there are plenty of other proverbial fish out in the proverbial IT Professional sea, so start researching.

     Ask other contractors what they charge

    Sounds simple, but you’d be amazed how many people don’t do this. Of course there are reasons why people working in the same profession as you would want to keep their day rates to themselves; they might feel they’re charging too little, or that their competitors could undercut them.

    The problem with this is that if contractors don’t discuss their day rates, new contractors will come in and undoubtedly price themselves too low. This will eventually push all day rates down, as the market for contractors becomes too competitive. So chat with other contractors, and make sure you’re earning what you should be.

    If you have any contacts working in HR, they could also be very valuable to you. As they often deal with invoices and contracts, they can let you know what the going rates are.

    Use online salary tools

    Researching through salary tools is one of the best places to start when deciding what to quote. LinkedIn’s salary tool amalgamates hundreds, maybe thousands of submitted salaries, to show the median yearly salary for a particular job title in a particular location. Alternatively, you can just search by country. Let’s take a look at some popular IT job titles and their salaries in the UK on LinkedIn.

     

    Job title:                                 Median base salary (per year)                     Range:

    IT Consultant                           £40,000                                                           £22K-£77K

    IT Manager                             £42,000                                                           £30K-£62K

    IT Analyst                                £25,500                                                           £18K-£40K

    IT Project Manager                 £46,000                                                           £33K-£65K

    IT Engineer                             £25,400                                                           £18K-£36K

    IT Administrator                      £23,600                                                           £17K-£40K

    For further salary research there are other versions of this tool available, such as Glassdoor’s. These average salaries are for full-time positions of course, so next up would be determining the additional costs you have that need to be compensated for.

    The perfect match

    There are two main reasons that IT contractors can charge a higher day rate than that of their counterparts on full-time salaries. The first is that a contractor doesn’t work every working day like someone in permanent employment does. The second is that there are plenty of additional costs the contractor has to factor in, such as:

    • Tax
    • National insurance
    • Healthcare
    • Funding your own sick pay
    • Funding your holiday time
    • Travel expenses
    • Business expenses

    The trick is to find the perfect match between payment for your work and funds to cover these costs. For one thing, be realistic: there’s probably no way you’ll end up working all of the 252 working days in the year. The actual figure might be something closer to around 120-150 days a year (we’ll call it 135).

    So let’s say your expected salary if you were in a full-time position was £45,000. If you divide that by 252, that comes to a day rate of £178.50. Divide by 135, and it comes to a day rate of £333.

    This isn’t taking into consideration the things we mentioned however (besides tax and NI). So, instead, let’s say your day rate was £450. Multiplied by 135 working days, it comes to annual earnings of £60,750, which after tax and NI would be similar to the full-time salary, giving you enough to cover any additional costs.

    Assess your own value

    When you think you know all you need to know about day rates, there’s one more thing you need to ask yourself honestly: how much value do you provide to the client?

    If you feel good about what you’re charging, and you can produce the work to back it up, then you should feel confident and stick to your guns.

    When you first go contract, there are likely to be times when you undercharge for work, and times when you quote too much and lose work. Use this experience to determine the right day rate for you.

    Now, who’s up for drinks and maybe more?

     

     

     

  • contractor jobs

    Contract or perm? Your next big employment decision

    What did you watch on Netflix last night? Maybe you binged on some ‘Breaking Bad’, or watched that new Adam Sandler remake of ‘Pretty Woman’ in which he plays every single character.*

    Or maybe you came to the conclusion that you’ve now exhausted the Netflix catalogue. It was fun for a while – how good is Breaking Bad?! – but now you’ve finished it, you’ve got all you’re going to get out of Netflix for the near future. It’s time to move on to something new.

    Now, before this article turns into a full-blown ad for Amazon Prime, let’s get down to what we’re really talking about here: your career. Like Netflix, a job can be perfect for a while, until you feel you’ve got everything you can get from it. At that point, it’s time to find something more fulfilling.

    That doesn’t necessarily mean going from one permanent position to another though. After all, you didn’t only watch Netflix, did you? You probably streamed things online from time to time, and occasionally watched a programme live on TV as it happened (how retro of you).

    So why not take this approach with your career? Work when you like, at whichever company is offering the work that appeals to you the most.

    Going freelance and becoming a contractor is a decision that thousands of highly-skilled professionals have made (49 million across Europe and the US, according to The McKinsey Global Institute). If it’s something you’re also considering, read on to see if going contract or staying in permanent employment is best for you.

    Contract jobs

    If you have skills that are in demand, you needn’t limit yourself to one company or one position for an extended period. Instead, you could bounce from project to project, company to company, and only choose projects you want to work on.

    This is definitely one of the biggest pros of going contract (or freelance). Not only are you free to pick and choose your work, but you’ll also be paid more for your time than you would with a regular salary.

    Let’s say you’re a highly-skilled IT professional earning £30,000 a year; divide that £30K by the 12 months of the year and you have £2,500; then divide that by 20 working days of the month and you have £125 – your day rate. However, if you’re working under contract, you’re able to command a much higher daily rate – say, £400-£500 for example – meaning in just one Mon-Fri week working on a project you could earn as much as you did in a month previously.

    Remember, you’re doing employers a favour, too. They’re urgently searching for skills that don’t exist in-house and contractors provide the perfect solution. You’re not an addition to permanent headcount and won’t be subject to a lengthy recruitment process or notice period. As you’re hired based on your expertise, there’s no need for protracted training; you can hit the ground running and deliver fast. In fact, despite your extremely nice day rate, you’re a cost-effective and attractive option.

    Of course, unless you’re particularly organised and sought after, there will likely be times where you don’t have any work (this might be out of choice – time off is one of the perks, after all!) This is justification for that day rate; it’s not only higher to compensate you for a job well done, it’s higher so it covers you for the days you’re not at work. Then again, if you go contract but use an agency or an online marketplace like Elevate to help you find regular work, this isn’t so much of an issue. You won’t have to hunt for contracts (or contractors, if you’re an employer), as we’ll do it for you. That’s why Elevate is here.

    find contract jobs

    Permanent jobs

    You only need to look at any ‘Office Administrator’ position to see just how competitive the job market is right now. Each of these posts receive hundreds of applications, due to the broad, common skill-set required. If you’re a highly-skilled professional, however, your likelihood of finding a good role is far higher.

    Around a quarter of employers said they expected to take on more staff in the first quarter of 2017, according to the REC’s JobsOutlook survey, while 48 per cent predict there’ll be a ‘shortage of suitable candidates to fill vacancies for 2017’. This is obviously good news for Generation Skill.

    You’ll be familiar with the benefits of permanent employment already: pension plans, private medical cover, training and new technology, etc. It’s ideal for people who like stability; who want to see the long term effects of their work and enjoy the perks. One of the biggest factors, however, is that it offers the ‘safety blanket’ that many of us require, particularly those with families and mortgages.

    There’s also the social side which comes with being a regular part of a team, though this isn’t denied to contractors, of course.

    But if you’re feeling restless both in work and perhaps in life, then going contract could be your next big employment decision. For the highly skilled, you’ll almost certainly make more money and have more freedom than you previously had.

    What’s more, some contractors argue that they have better job security than perm staff, in that they have control of the what, where and when – plus they expect contracts to end and don’t take it personally.

    Ultimately, you might find you achieve greater job satisfaction working as a contractor, where your skills are both highly valued and appreciated. Your work-life balance can be optimised too; giving you plenty of time to catch up on Netflix, or indeed, Amazon Prime.

    I’ve heard that ‘Mr. Robot’ is pretty darn good.

    Discover how Elevate can enhance your career or help you build a team of specialists.

    *This film does not exist. If you’ve now signed up for Netflix just so you can watch Adam Sandler’s ‘Pretty Woman’ remake, we apologise, but hope you find the help you need soon.

  • Austin, Texas

    Government hand-picks Elevate Direct for SXSW panel

    Elevate Direct is attending the iconic South by SouthWest (SXSW) event in Austin, Texas, at the invitation of the Department for International Trade (DfIT).

    Elevate CEO, Dan Collier, is joining a panel discussion hosted by the DfIT as part of its ‘Innovation is Great’ campaign, which showcases successful British tech companies. Elevate, the intelligent recruitment platform, is one of just five businesses selected by the DfIT and is the only representative from the staffing sector.

    The discussion is based around how digital innovation, disruptive technology and data is being used by public sector organisations. It will examine how traditionally bureaucratic institutions can shake off the red tape to compete with some of the most ambitious tech companies and attract the best talent. This aligns with Elevate’s extensive experience boosting government hiring efficiency – reducing one department’s staffing agency margin by 75% – and better utilising its existing workforce using technology.

    The talk will take place in the specially created Great Britain House and the Elevate team is offering to buy drinks afterwards for anyone who wants to chat.

    Running from 10-19 March, SXSW brings together creative people from all over the world, facilitating the development of professional relationships and the sharing of ideas. It comprises comedy, film, music and interactive festivals, parties and a prestigious conference which examines future innovation in the culture, technology and entertainment industries.

    SXSW is a global event which attracts massive international media interest – and not only for its celebrity attendees (last year’s keynote speakers included the Obamas).

    Speaking about the invitation, Dan says: “We’re honoured to have been selected by the DfIT to represent the UK. SXSW is a globally-renowned event and a fantastic chance to both get our brand in front of some international influencers and to help further enhance the UK’s reputation for building great tech businesses.”

    The panel discussion takes place at 3pm, March 12 at Great Britain House, Speakeasy, 412 Congress Avenue, Austin, Texas.