How much are you worth?
I am regularly asked ‘what should my day rate be for contracting roles?’ by seasoned contractors as well as communications professionals in permanent roles thinking about a freelance career. At VMA we have a day rate calculator on our website so I can easily spit out an answer if you give me your current or previous pro rata salary but that really isn't the full story.
There are a range of things to consider when setting your day rate and I usually recommend working a flexible sliding scale and assessing each opportunity against a list of factors:
- Is it something new that will add to my CV - be it industry or project?
- What is the length of the contract?
- Will there be further opportunities with the business?
- Is it close to home or a difficult commute?
- Will you need to stay over night and pay for accommodation?
- Is there flexible working or part time options so I can look at other projects?
- Is it something I am really interested in?
- What are the people and environment like?
You need to add all of this into the equation and come up with the appropriate day rate for each opportunity. The day rate calculator may say your day rate based on your permanent salary is £350 but I would advise contractors to consider opportunities from £275 - £425. If you are going for a role that you can do in your sleep, it is specific to your industry and project experience, is short term and away from home you would look to charge more than you would for a long term contract with a local charity that you feel passionately about that is embarking on a new project that is a step away from your usual experience.
Some contractors find it hard to maintain their base rate if things have gone quiet and it has been a while since their last contract. But you don’t do the profession or yourself any favours by slashing your rate and taking anything that comes your way. In fact I would never recommend cutting your day rate too severely. You may find you have dropped your rates and then you are still not getting the roles as people reviewing your CV may assume you are over qualified.
Equally puffing up your day rate with no basis isn't going to be a sustainable route. Think about the competition who you are up against who have a track record of success at that level. You are not likely to perform as well and might be passed up for the next role with the company that is at your level.
I sometimes have conversations with contractors that want a higher rate because they are travelling far from home for a potential role. That really isn't a compelling answer - yes it's a factor but not the sole reason for an increase. The client should pay for your expertise, not your journey to work.
It comes down to being flexible and fair - knowing your worth and setting limits to your base and maximum day rate so you know where to pitch yourself for each individual opportunity.
If in doubt, talk to a recruiter you trust. They will be able to review your experience against other contractors they represent and advise on the going rates at your level.
By Julie Mazzei
Managing Consultant, VMA North
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