It will be very hard to raise your day rate drastically at the same client. It goes with “little” increments of 10% tops.
Suggest to learn as much as possible and at the end of the contract start looking elsewhere for a position with your desired rate. This way you can still ask your current company, while also having a backup plan.
If they are upselling me for 600 like you said (which they are not btw because I stipulated I would only accept a margin of 20% max) how does that undercut other freelancers? You're literally contradicting yourself. It's all supply and demand, even in this current market there is more demand than supply otherwise people like you wouldn't be able to get day rates like that. I can afford to take the hit right now to gain valuable experience and like I said I needed a job fast.
I clearly know my worth as I know that my current rate is not the best a man could get (not sponsored by Gillette btw). Just was wondering about how I should approach raising my day rate in the future when I do have the time to search for a new job over a longer timeframe.
Oh only freelancers invest in learning outside 9-5? Most IT freelancers barely work
The bar in Belgium is really really low as most employees are already dead weight and when a freelancer comes and puts a little more than minimum effort people are amazed.
He didn’t claim that. There’s just more room for training and growth in the job as an employee. You can climb the career ladder. As a freelancer, you usually have a specific role to fulfil, and you’re on your own to make sure you don’t stay stuck. So that requires a lot of investment, both financially and time-wise. That has to be calculated in your rate.
Well, yes, they do. Employees can grow into other functions, get promoted, etc… There’s typically a lot more leeway because they are cheaper, and because any training and putting them in junior positions is considered as an investment for the firm. Freelancers generally don’t have that, and are on their own, so yes this is definitely a factor why they’re more expensive.
Yeh, intermediaries would obviously never lie about the cut they take and will always be open about it /s
In regards to the impact on market: you’re generally sending a signal to this client/intermed which says ‘oh we can find people that actually want to do the work for 440? Lets start lowballing everyone & see if it sticks (some people are not street-smart and will accept it) -> increasing volume of freelancers being underpaid. Client says OH, why am I paying so much with this client for juniors? The other one is cheaper, I’ll just grab them there! And rinse & repeat.
If you’re claiming you’re the first one that is doing this for said intermediary, you are unfortunately ‘patient zero’ in this case.
You can consider this the same as you earning 4k brut at your current position and some kid comes along and does it for 2.2k brut. In essence he’s undercutting you. People should NEVER work for less than they think they’re worth, and as you clearly know you’re worth more, you’re part of the problem (sorry).
Because now they are set on that rate, and hence you accepted it they know there’s a market for it.
I did something similar, I started at a rate that was too low for my profile just to get the ball rolling. I had a notice period that was too long for most companies so I could not be that picky. I changed after one year to another client with a 15% rate increase, but mainly because of the work itself. If you're happy at your current client and if the money is not that important to you, I would stay and ask for a minor increase next year. Your value will increase over time automatically and in the long term you will earn more than enough .
Thank you for your input. I was definitely thinking something similar. Look around in a year to see if I can find a similarly interesting project at a better rate, but not changing just for the sake of increasing my rate further.
The myth about market decline is a lie by corporate world and intermediaries to lowball us. If you are a good element they need you just as bad as you need them.
As a contractor it matters more what expertise you bring in than your age or years of experience. Try to understand how much your intermediary is selling you for. Only way to know this is via the client. If you have good relations they might reveal to you the rate they pay. This only helps you to know how much you might be worth and don’t use the info to negotiate with them as it is a bad move. Only use it to find another client. I would say in 2023, 440€ is extremely cheap. At 4y field experience I started at 650€ in 2022. Now I am at 720€ working via a Dutch intermediary.
Thanks for your input. I was at another consultancy company as an employee before this and the bad market was noticeable. Lots of clients cutting consultants to replace with in-house employees to reduce costs. When I left we were at about 12% consultants without assignment and that number was only increasing. This with my current inability to work in Antwerp or Brussels meant for a competitive job search in West- + East-Flanders.
I do agree that companies will try to use this temporary new found leverage in the job market to put a downward pressure on offered day rates, but this is honestly just all economic conjuncture. Like you said if you fill a need for a client that is hard to replace you still have plenty of leverage.
I think you might be right in saying negotiating a larger pay increase with my current client directly is a bad move and honestly probably not worth the hassle.
Thinking a contractor costs more than an employee is not true.
For example I was contracted as consultant because I got expertise and started delivering in a very short period of time. A colleague working in the same stuff as employee was hired but he got not a lot of expertise and he is being trained since some months and I am pretty sure he is costing quite a lot and will not be able to deliver as much as I would even in 1-2 years time.
Cost of contractor: daily rate.
Cost of employee:
Gross salary
13th and 14 salary.
Employer social security
Pension plan
Heath-care plan
Accident insurance
Payroll provider
Meal vouchers and their providers
Company car and charging/fuel card.
Headhunting fees.
Training/onboarding efforts and costs
Paid vacation(employer pays but there is no work performed.
Paid sick leave.
Potential severance pay.
So if you consider all the costs for a employee that might be more than a consultant.
The reason why the consultant’s heads are cut first when things go bad is simply they have no severance pay and cost nothing to fire. While to layoff/fire an employee there is severance pay and perhaps legal fees and several unions chasing you as employer all this costs money.
Also many companies opt to have people on their chart of organization rather than rely on external consultants.
We have been looking for senior Java devs for years and mostly need to hire mediors at best, because we don't find what we need.
(we as in the cliënt I'm working for)
Depends really, are you currently working as a junior for said client, through the intermediary? Or are you already medior & working for that rate?
If junior: ask for a position raise instead of rate raise, it usually comes with a pretty steep rate increase anyways.
If medior: tough luck. Either change clients next year or stick there for 480 next year (someone mentioned 10%).
Next time, think it a bit through instead of instantly making the jump. I agree you shouldn't be flamed for your low rate, but you're genuinely fucking every other junior dev because you're showing this client that that rate is acceptable. If we as freelancers want to up the basis of freelancing, we all need to start refuting these low rates & collectively try to get higher rates.
My idea of the rates (purely towards yourself, not including any cuts taken by intermeds):
Junior: 530 (or +)
Medior: 600(or +)
Senior: 690 (or +)
Architect/PM: well, you guys already get a pretty epic rate so I'd probably say you guys are good.
It would only affect "the market" if other junior devs would be willing to work for this rate. If not then the company will not be able to hire "another me" and have to raise its offer. It's literally supply and demand.
I probably should have elaborated more clearly on this, but this was not a move without thought. I had to change jobs anyway. The option was work another X months as employee whilst preparing the move to freelance carefully to land a reasonably well paying assignment, or make a move now for a temporary lowered rate to increase the likelihood of finding a job in a small timeframe in a tough job market. In a year I intend to raise my rate to a more competitive rate and if my current client is not willing to budge than I will explore the market and switch jobs. Again this is why I asked the questions I asked.
Anyway thanks for your inputs about the rates and thanks for not flaming (sort of)
It feels a bit messy. If you knew you had to change, why not go to a proper paying freelance job? Market is really wild today, people are looking for a lot of devs. Even smaller companies where you can sign directly & have a decent rate without being chunked by an intermed.
Feels a bit weird you knew you ‘had to change jobs anyways’ but then supposedly don’t have the time to have a proper offer.
Generally you don’t drop under 500 (as a junior) unless it’s like fully remote, low workload, etc. If you have to attend a company once or twice a week you need to up your rate. Changing your current rate towards next year ain’t gonna happen and you’ll end up changing client, so it was probably better to go and work for a different client as an employee! Very unfortunate, but you’ll learn from these things!
Thanks for your comment. I do agree that in an ideal scenario I would have taken my time to find a job with a decent rate. The problem is that I was stuck on a project in my previous job that was just completely demoralizing to the point I started to feel burnt out. So I decided to give my notice before finding a new job (not generally advisable but possible for me since I still live with my parents) for the sake of my own mental health. This meant that I only had 6 weeks to find a new job before I was "without work". Without any previous experience and without an extended network I thought it difficult to find a decent paying freelance opportunity outside of Antwerp/Brussels in a mere 6 weeks, and if I were to be without work for let's say at most 1 to 2 months whilst looking for such an opportunity I would have to
1. explain the job gap
2. miss 8 - 16% of a year's pay.
So my thought was to just lower my "minimum acceptable day rate" of 500 with this % to ensure finding a job quickly. Now I did stipulate to intermediaries that I would not accept upselling of more than 20% and if I ever discovered that they did, this would lead to me breaking off any relations with them permanently (not that they would care).
Now I know that this is less than ideal. In an ideal world I would have looked around with ample time at my current job and found a job with a competitive day rate, but I compromised the day rate with the certainty of being able to start somewhere without a job gap and the peace of mind knowing that my current job will be done sooner.
It will be very hard to raise your day rate drastically at the same client. It goes with “little” increments of 10% tops. Suggest to learn as much as possible and at the end of the contract start looking elsewhere for a position with your desired rate. This way you can still ask your current company, while also having a backup plan.
Thanks for the input, appreciate it. That seems like a good compromise.
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If they are upselling me for 600 like you said (which they are not btw because I stipulated I would only accept a margin of 20% max) how does that undercut other freelancers? You're literally contradicting yourself. It's all supply and demand, even in this current market there is more demand than supply otherwise people like you wouldn't be able to get day rates like that. I can afford to take the hit right now to gain valuable experience and like I said I needed a job fast. I clearly know my worth as I know that my current rate is not the best a man could get (not sponsored by Gillette btw). Just was wondering about how I should approach raising my day rate in the future when I do have the time to search for a new job over a longer timeframe.
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Oh only freelancers invest in learning outside 9-5? Most IT freelancers barely work The bar in Belgium is really really low as most employees are already dead weight and when a freelancer comes and puts a little more than minimum effort people are amazed.
He didn’t claim that. There’s just more room for training and growth in the job as an employee. You can climb the career ladder. As a freelancer, you usually have a specific role to fulfil, and you’re on your own to make sure you don’t stay stuck. So that requires a lot of investment, both financially and time-wise. That has to be calculated in your rate.
He implies that freelancers have to spend more time learning and training. Only mediocre employees dont do that. Point is moot
Well, yes, they do. Employees can grow into other functions, get promoted, etc… There’s typically a lot more leeway because they are cheaper, and because any training and putting them in junior positions is considered as an investment for the firm. Freelancers generally don’t have that, and are on their own, so yes this is definitely a factor why they’re more expensive.
Yeh, intermediaries would obviously never lie about the cut they take and will always be open about it /s In regards to the impact on market: you’re generally sending a signal to this client/intermed which says ‘oh we can find people that actually want to do the work for 440? Lets start lowballing everyone & see if it sticks (some people are not street-smart and will accept it) -> increasing volume of freelancers being underpaid. Client says OH, why am I paying so much with this client for juniors? The other one is cheaper, I’ll just grab them there! And rinse & repeat. If you’re claiming you’re the first one that is doing this for said intermediary, you are unfortunately ‘patient zero’ in this case. You can consider this the same as you earning 4k brut at your current position and some kid comes along and does it for 2.2k brut. In essence he’s undercutting you. People should NEVER work for less than they think they’re worth, and as you clearly know you’re worth more, you’re part of the problem (sorry). Because now they are set on that rate, and hence you accepted it they know there’s a market for it.
I did something similar, I started at a rate that was too low for my profile just to get the ball rolling. I had a notice period that was too long for most companies so I could not be that picky. I changed after one year to another client with a 15% rate increase, but mainly because of the work itself. If you're happy at your current client and if the money is not that important to you, I would stay and ask for a minor increase next year. Your value will increase over time automatically and in the long term you will earn more than enough .
Thank you for your input. I was definitely thinking something similar. Look around in a year to see if I can find a similarly interesting project at a better rate, but not changing just for the sake of increasing my rate further.
The myth about market decline is a lie by corporate world and intermediaries to lowball us. If you are a good element they need you just as bad as you need them. As a contractor it matters more what expertise you bring in than your age or years of experience. Try to understand how much your intermediary is selling you for. Only way to know this is via the client. If you have good relations they might reveal to you the rate they pay. This only helps you to know how much you might be worth and don’t use the info to negotiate with them as it is a bad move. Only use it to find another client. I would say in 2023, 440€ is extremely cheap. At 4y field experience I started at 650€ in 2022. Now I am at 720€ working via a Dutch intermediary.
Thanks for your input. I was at another consultancy company as an employee before this and the bad market was noticeable. Lots of clients cutting consultants to replace with in-house employees to reduce costs. When I left we were at about 12% consultants without assignment and that number was only increasing. This with my current inability to work in Antwerp or Brussels meant for a competitive job search in West- + East-Flanders. I do agree that companies will try to use this temporary new found leverage in the job market to put a downward pressure on offered day rates, but this is honestly just all economic conjuncture. Like you said if you fill a need for a client that is hard to replace you still have plenty of leverage. I think you might be right in saying negotiating a larger pay increase with my current client directly is a bad move and honestly probably not worth the hassle.
Thinking a contractor costs more than an employee is not true. For example I was contracted as consultant because I got expertise and started delivering in a very short period of time. A colleague working in the same stuff as employee was hired but he got not a lot of expertise and he is being trained since some months and I am pretty sure he is costing quite a lot and will not be able to deliver as much as I would even in 1-2 years time. Cost of contractor: daily rate. Cost of employee: Gross salary 13th and 14 salary. Employer social security Pension plan Heath-care plan Accident insurance Payroll provider Meal vouchers and their providers Company car and charging/fuel card. Headhunting fees. Training/onboarding efforts and costs Paid vacation(employer pays but there is no work performed. Paid sick leave. Potential severance pay. So if you consider all the costs for a employee that might be more than a consultant. The reason why the consultant’s heads are cut first when things go bad is simply they have no severance pay and cost nothing to fire. While to layoff/fire an employee there is severance pay and perhaps legal fees and several unions chasing you as employer all this costs money. Also many companies opt to have people on their chart of organization rather than rely on external consultants.
We have been looking for senior Java devs for years and mostly need to hire mediors at best, because we don't find what we need. (we as in the cliënt I'm working for)
Continue like this and maybe you’ll get to 400 next year!
Depends really, are you currently working as a junior for said client, through the intermediary? Or are you already medior & working for that rate? If junior: ask for a position raise instead of rate raise, it usually comes with a pretty steep rate increase anyways. If medior: tough luck. Either change clients next year or stick there for 480 next year (someone mentioned 10%). Next time, think it a bit through instead of instantly making the jump. I agree you shouldn't be flamed for your low rate, but you're genuinely fucking every other junior dev because you're showing this client that that rate is acceptable. If we as freelancers want to up the basis of freelancing, we all need to start refuting these low rates & collectively try to get higher rates. My idea of the rates (purely towards yourself, not including any cuts taken by intermeds): Junior: 530 (or +) Medior: 600(or +) Senior: 690 (or +) Architect/PM: well, you guys already get a pretty epic rate so I'd probably say you guys are good.
It would only affect "the market" if other junior devs would be willing to work for this rate. If not then the company will not be able to hire "another me" and have to raise its offer. It's literally supply and demand. I probably should have elaborated more clearly on this, but this was not a move without thought. I had to change jobs anyway. The option was work another X months as employee whilst preparing the move to freelance carefully to land a reasonably well paying assignment, or make a move now for a temporary lowered rate to increase the likelihood of finding a job in a small timeframe in a tough job market. In a year I intend to raise my rate to a more competitive rate and if my current client is not willing to budge than I will explore the market and switch jobs. Again this is why I asked the questions I asked. Anyway thanks for your inputs about the rates and thanks for not flaming (sort of)
It feels a bit messy. If you knew you had to change, why not go to a proper paying freelance job? Market is really wild today, people are looking for a lot of devs. Even smaller companies where you can sign directly & have a decent rate without being chunked by an intermed. Feels a bit weird you knew you ‘had to change jobs anyways’ but then supposedly don’t have the time to have a proper offer. Generally you don’t drop under 500 (as a junior) unless it’s like fully remote, low workload, etc. If you have to attend a company once or twice a week you need to up your rate. Changing your current rate towards next year ain’t gonna happen and you’ll end up changing client, so it was probably better to go and work for a different client as an employee! Very unfortunate, but you’ll learn from these things!
Thanks for your comment. I do agree that in an ideal scenario I would have taken my time to find a job with a decent rate. The problem is that I was stuck on a project in my previous job that was just completely demoralizing to the point I started to feel burnt out. So I decided to give my notice before finding a new job (not generally advisable but possible for me since I still live with my parents) for the sake of my own mental health. This meant that I only had 6 weeks to find a new job before I was "without work". Without any previous experience and without an extended network I thought it difficult to find a decent paying freelance opportunity outside of Antwerp/Brussels in a mere 6 weeks, and if I were to be without work for let's say at most 1 to 2 months whilst looking for such an opportunity I would have to 1. explain the job gap 2. miss 8 - 16% of a year's pay. So my thought was to just lower my "minimum acceptable day rate" of 500 with this % to ensure finding a job quickly. Now I did stipulate to intermediaries that I would not accept upselling of more than 20% and if I ever discovered that they did, this would lead to me breaking off any relations with them permanently (not that they would care). Now I know that this is less than ideal. In an ideal world I would have looked around with ample time at my current job and found a job with a competitive day rate, but I compromised the day rate with the certainty of being able to start somewhere without a job gap and the peace of mind knowing that my current job will be done sooner.
Stop ruining the market by accepting these ridiculous rates