Tips and Tools to Negotiate Contractor Pay Rates

Negotiating a contractor’s pay rate can be one of the most difficult parts of placing a contract candidate. Where do you start, especially if you’ve had little experience placing the particular position in question?

Luckily, there are a couple of tools on the Internet that can give you a starting point for negotiating contractor pay rates. Those tools include the following:

• Bureau of Labor Statisics (BLS) Occupational Employment Statistics—This site provides national hourly and salary wage estimates for about 800 occupations based on semi-annual mail surveys. It also allows you to narrow down the data by industry or geographic location.
• www.salary.com—This site’s free “Salary Wizard” allows you to search its database. You can do so by job title and location, providing a range of salaries, as well as the median salary for the criteria selected.

As a benchmark to begin negotiations, divide the annual salary for a comparable direct position by 2,080 hours (approximately one year) to get the hourly rate. Click HERE for a free Salary-to-Hourly Conversion Table.

Factors affecting pay rates

Once you have calculated that hourly pay rate, adjust the number based on the unique details of the contract placement. Below are a few factors that could affect contractor pay rates:

• Short-term contracts sometimes require higher pay rates because it’s difficult to find candidates to accept those positions.
• Long-term contracts are more like direct hire positions. The longer the contract, the closer the pay rate will be to a comparable direct hire salary.
• If the candidate has been unemployed, particularly for a long time, that could bring the pay rate down.
• Skills that are particularly valuable or rare demand a higher pay rate.
• If the position requires travel or relocation, that could drive the pay rate up.

Are YOU in need of contract staffing solutions or contract placement services in the New Year?

Then download our Quick-Start Guide to Contract Staffing. Or request a demo with one of our contract staffing specialists.

You can can also call us at (888) 627-3678. Start making contract placements and start making more money!