Knowing Your Worth
Posted on 14 September 2017
New to contracting or considering the change? No doubt you’ve asked yourself one very important question: how much can I earn?
How much you earn is determined by how much clients are willing to pay for your services. In other words, how much are you worth in the market?
Unfortunately there’s no simple formula to follow but here are a few things to consider when setting your rates:
Understand Your Market Value
Many things influence a person’s value in the market, but some of the key factors to consider include:
- Size and scale of previous projects delivered, especially projects of notable significance
- Size and scale of previous employers (medium vs enterprise scale)
- Ability to provide in demand and/or niche skills
- Levels of responsibility in past roles
- Direct reports in past roles
Contractors with unrealistic expectations is one of the most common mistakes we see. Yes, it would be great to charge top rates but do you have the skills and experience match? Remember, the higher the rates the higher the expectations; over promising and under delivering will only serve to damage your reputation and limit the opportunities presented to you.
Understand the value of the role
Just as each individual contractor in the market has a value each individual role has a value, and recognising this is vital. Based on their requirements, some roles simply don’t warrant more money. If offered a role that pays less than your standard rate you have two options: consider other benefits the role offers (e.g. new challenge, great company, convenience) and accept the role at the lower rate or decline the opportunity and wait for something else. And always remember - it's a supply versus demand equation that ultimately determines market rates.
In addition to the above considerations, it’s also important to seek advice from those in the know - recruiters. Taking into account the above factors, and the current state of the market, they’ll be well placed to give you an indication of how much you can expect to earn and will be able to present opportunities to you as they come in.
Hopefully we’ve given you some food for thought, and a good base to get you started. If you’d like to discuss contracting rates further please don’t hesitate to reach out - [email protected] or 09 368 5111. We look forward to speaking with you soon.