Contract Extensions: When and How to Ask for a Rate Increase

Posted on May 2016 By Speller International
Contract Extension

​Securing a rate increase is a fine art, and negotiation plays a huge role in ensuring you get the best possible outcome.

Picture this: your contract is coming to an end but it looks like there is a strong potential for an extension. You think you’ve been doing a great job – but is it the right time to ask for a rate increase? Before you do anything else, you need to assess whether you are justified in asking for more money.

First, ask yourself:

  • Have my regular tasks changed from the initial contract?

  • Has my workload grown substantially?

  • Do I now have extra responsibilities?

  • Am I now managing people; or has the number of people I manage increased?

  • Have I moved from a support role into something more project-based?

  • Has demand increased for my skill set in our market? (This can work both ways, however: changes in the market can also work against you if demand for your skill set is low)

By preemptively addressing potential resistance points your manager or recruiter may have, you are ensuring you’re ready to ask for the rate increase – and to explain why you deserve it.

Now, it’s negotiation time

Once you’ve decided it’s time to talk, here’s what to do:

Talk to your recruiter first

Once you’ve asked yourself the hard questions and you’re sure a rate increase is feasible, touch base with your recruiter as soon as possible. Let them know you would like an increase, and explain the reasoning behind why it is deserved.

Make sure your timing is right

Timing is important here, right from the start. We suggest getting in touch a minimum of one month prior to your original finish date as, if you leave things too late, budgets may already be set, leaving you with little room to negotiate.

Know what you want

Work out your minimum rate and stick to it, but don’t just pull numbers out of nowhere – do your research and ensure that what you are asking for is reflected in the market.

Understand the reality

Remember that, sometimes, even if you are deserving of an increase, the money just isn’t in the budget. Be prepared to negotiate in other ways: a longer contract, the promise of a review in the new financial year, or something else. Money is not the only way to feel rewarded, so thinking laterally can pay off if budgets are tight.

Ultimately, a successful negotiation leaves both parties feeling satisfied. If you’re feeling unsure about what move to make next, consult your recruiter. Remember, they are there to help.