Q: I’ve seen a freelance/contractor role that I really want to go for but know that I must raise my rate to be in line with inflation. What guidance or tips do you have as a recruiter on how to pitch a higher rate for a role? What have candidates done in the past to secure a higher rate both for inside and outside IR35 roles?
Paul Farrer, founder and chairman of agency Aspire offers his knowledge on the topic and how it pays to ask an agency to negotiate on your behalf and also to know what to expect when you do.
As an agency, we have a responsibility to both our clients and our candidates to find a reasonable balance regarding rates that satisfies both parties.
Aspire is fully aware of the current market rates which have been rising due to a variety of factors such as skills shortages, IR35 reform and increases in the cost of living.
Naturally, we’ll look to negotiate the best rates possible for our candidates but not at the risk of losing you the contract by pricing you out of the market.
When discussing rates with the client, we would, of course, also justify why you deserve to be paid a certain amount, touching on market trends, the increase in demand for certain skills and more recently, inflation and the rising cost of living. In other words, we’ll do a lot of the legwork for you to make sure you’re being paid the right amount.
We also regularly survey both our candidates and clients, to ensure we can forecast and advise from a position of strength. For example, recently we helped all our contractor candidates understand the impact of the recent increase in National Insurance and how this could affect their take-home pay.
In truth, we don’t tend to receive too many queries regarding how candidates’ pay can be raised to take into account the cost of inflation – more often, the questions we receive are focused on the wider market, skills gaps and other ways freelancers can command more for their work.
When focusing on IR35, naturally, some freelancers have increased their rates as a result of operating inside the legislation, given they are taxed as employees. In some circumstances, the client is accepting of this – but often, if a contract is deemed inside IR35, the freelancer or contractor will be offered the option of working through an umbrella company, where they receive rights* in exchange for paying a higher rate of tax.
But whether it’s inside or outside IR35 contracts, in our experience, in the past year, rates of pay have been increasing in the vast majority of the sectors – from media to marketing, technology, digital, events and sales – sometimes in upwards of 30%, as clients pay more to access the talent they need.
*[“Workers who are employed by umbrellas should be entitled to a range of employment rights (subject to qualifying periods) including redundancy payments, unfair dismissal protections, maternity leave and pay and they should be paid between assignments if they are not working,” according to union TUC.]