Renewing or extending a contract for your job is important, but this isn’t the type of thing that you want to wait until the last minute to do. Regardless of how long the original contract is for, the bottom line is that you’ve probably been thinking for months about whether or not there are changes in the contract that you’d like to see made.

Things such as rate increases, contract duration, notice periods, and client expectations/deliverables are all topics normally addressed in a contract renewal. But, doing things last minute doesn’t give you, your agency, or the client enough time to get approval. 

Remember, often a client has a set or approved budget, so it’s not quite as simple as giving you that “extra £20 per day”

The fact is, you can be a lot more confident in getting the extension if you know how to negotiate your contract renewal, and it starts with the following steps:

The last thing you want to do is rush through your contract renewal. If you start the negotiations 4/6 weeks before the contract is set to expire, this can give you the leeway you need to increase the odds that the negotiations will be successful.

Keep in mind that your goal should be to make sure you are happy with the position you are in and that both you and the client are benefiting from the relationship. 

If a rate increase is justifiable, then why? Review everything you’ve accomplished above what was agreed/expected of you and use these to bargain with.  

Within the temporary/contracting world, it is extremely important to put the focus of the client first. Building out as many strong relationships as possible and gathering as many positive references as you can make it easier to negotiate a new contract, and find more work further down the line.

When working with an IT recruitment agency such as Lucid, previous client reviews are a massive factor when we are looking to put forward a certain contractor for a temporary position.

What this means is, how are your relationships with stakeholders, board members, and senior management?

From the very beginning, you should have been building positive and honest relationships with all of these people.

If you have done this, they likely already know at this point of your accomplishments.

If not, you need to start letting them know about what you’re achieving and contributing towards the company’s success.

Even though you may feel that you are developing a strong relationship with the client, you wouldn’t want to discuss a contract renewal directly with them.

Working with an IT recruitment agency provides a great benefit when it comes to discussing your role within your contract and if you would like to negotiate a renewal as well.

Considering that an IT recruiter has already built up a relationship over a number of years, in some cases, with the client that you are working alongside, it will be in your best interest to have an experienced team member mediate this conversation for you.

As well as knowing the budget that the client has to work with, and their previous responses to contract renewals, your IT recruitment agency will be the best channel to pursue when looking to extend your working relationship.

When you get to the point where you’re ready to discuss renewals, make sure that you know exactly what you want out of your next contract. 

If you are looking to renegotiate aspects of the contract, make sure you document this: your expectations, the reasoning behind it, and the evidence.

Give your agency/employer all of the specifics and give them the tools they need to fight your corner and negotiate the deal you want. 

Remember that the more details you include in the negotiations, the better off you’ll be in the end.

It’s always best to discuss these things face to face or over the phone and then follow up on email. Never go into your negotiations unprepared.

Be calm, have confidence that what you’re asking for is right, and stick to the facts you’ve already prepared. 

Prepare for questions being asked because they normally are, and if they give you feedback, take that into consideration.

In addition, be prepared to get asked questions about both the past and the future.

If you plan to ask for a raise, make sure that you do some research into what is a fair pay rate for you to ask for. This is important because the client will want to know why you believe that you deserve a specific rate.

Have data to back up your claim, show them everything you’ve accomplished, especially if it helped the company either save money or generate more revenue. 

It is important to keep track of as many metrics as you can e.g. time saved, the knowledge that you had that helped the project reach completion, did you lead the project? Did you have to manage any other contractors? Were there any additional features that you had added to the project that impressed the client? 

You may think that increasing your pay rate will lead you into earning more money, and whilst there is truth to this line of thinking, there are many other factors that you have to consider when deciding upon your rate of pay.

Your rate of pay should reflect your experience, skillset, and be based on research within the market that you are working in.

Constantly looking to increase your pay rate can hinder you when it comes to discussing a contract renewal and working with new clients.

Building trust and longevity with clients will stand you in good stead for the future of your contracting career as you start to gain a larger client base.

Clients appreciate a long-lasting relationship with contractors and may be put off by an increase in pay rate or simply won’t be able to afford your services if you’re still wanting to complete the same level of work.

Be realistic, don’t just expect everything you want to be handed to you on a silver platter.

Why? Because there are always many variables, costs, timelines, or ‘business constraints’ that you may not be aware of. 

So always be open-minded and realistic about your expectations.

Keep in mind that this is not a “win or lose” situation. You’ll probably negotiate some items successfully and others not so successfully. 

The point is that you’ve gained valuable experience, and that experience can only help you the next time that your employment contract comes up for renewal.

This is also where being prepared for a variety of situations will be useful.

If you’re wondering if you should negotiate your contract early, the answer varies depending on whom you ask.

Most people decide to go ahead and wait until their contract is close to the renewal/extension date in order to be prepared.

But if you notice changes in the company that you’re not overly satisfied with, you might want to read the writing on the wall and start your negotiations early.

In the end, all of this is a highly personalised task that depends solely on your specific situation/contract. 

If you’re having trouble with your contract, or think you’re undervalued – feel free to talk to one of our specialist team who can give you some valuable market research or advice.

Written by Lucid Support