9 Tips on How To Ask for a Raise as an Independent Contractor
You’ve done everything you can to get a raise. You’re clocking in early, submitting work before it’s due, putting in that little extra effort — everything, that is, except actually ask for one.
This is a hard conversation to have, almost equal to the freelance interview, itself. But this time, instead of presenting yourself as an ideal candidate for the position, you’re now proving why you should receive more pay.
This is generally easier for employees, who are regular fixtures in a company and oftentimes get pay increases automatically. However, even employee should bring the matter up with their supervisor or human resources department and be prepared to negotiate for a greater pay increase at their annual review.
For freelancers and independent contractors, on the other hand, asking for a pay raise may require a bit more negotiation. The following is a collection of tips for any worker — even those not traditionally employed — who wants to ask for a raise with resounding success.
1. Always Ask for a Raise in Person
When discussing anything important, such as a higher salary or major project change, you should always speak to your clients face-to-face. Not only is it easier for you to be convincing — and harder for them to say “no” outright — it also shows that the request is something you’ve thought through and are serious about.
Send them a message or email asking when they would be free for a sit-down. Don’t mention anything about extra money yet (this has an off-putting ring to it and may rub them the wrong way), but feel free to share that you’d like to discuss the project.
If your contract is almost due for renewal or performance review, you might consider waiting till then to renegotiate for a higher rate. Clients are usually more prepared for project changes during this time, and you can take the opportunity to explain how you plan to add value during the next project phase.
2. Consider Their Point of View
Independent contractors don’t get the usual employee perks, like paid time off, health insurance, 401(k)s, bonuses, and yes, annual raises.
As a way to offset this, a contractor’s fees tend to be higher than an employee who does the same job. For example, an independent web designer can charge about $60 an hour, while an in-house web designer gets paid about $20 an hour, or about $59,000 a year.
With this in mind, clients and companies typically consider third-party contracts an add-on expense in their budget — and one they would like to keep at a lower figure.
The key is to show clients that the worth of your work goes far beyond what they’re paying.
3. Approach Negotiations as a Business
Yes, you may be a freelancer or independent contractor. But you’re also a business, and this is how you should present yourself when dealing with clients.
Even if your desire for a raise is based on personal reasons (i.e., a holiday trip, home renovations, a bank loan), your clients don’t need — or want — to hear this. What they do want to hear is what your services are worth to them.
Build a solid business case that breaks down exactly why you’re worth the increased fee. Ideally, this should include an itemized list of all your tasks and deliverables, as well as any times when you may have done further tasks that benefited their business and bottom line.
Did your extra work hours help them launch their store in time? Were your additional revisions the ones that ended up being in the final product? Add actual salary data and numbers if you can.
4. Give a Good Reason for the Raise
If your current role and work has changed from what was stated in the contract, you have all the right to renegotiate. This is called scope creep, wherein the project has since grown and expanded far from its original “scope.”
It may cause you to feel overworked and under-appreciated at first. However, all these additional responsibilities are a great opportunity to bring up a change of payment.
Offer to widen the scope of work at an industry standard rate. Something along the lines of, “The hourly market rate for [skill] is currently about [rate], and with the ongoing pace of the project, I recommend we expand by [extra hours] per day or week to accommodate the growth.”
This approach helps the client feel you’re both on the same side, rather than like you’re simply asking for more money.
Note: It’s best to discuss scope creep at the onset of the project before any actual work — or at least before any additional work — gets done. It will be a bit trickier to renegotiate mid-way through the project, and it’s always best to know if you and the client are on the same page.
5. Know the Number You Want
If you’ve been thinking about asking for a raise, then you probably have a figure in mind. Take this figure, add about 10-20%, and that’s where you should start your salary negotiations. It’s always good to have a little buffer, so in case the client counter-offers, you’ll still have a salary you’re happy to work with.
Conversely, decide how much below the original figure you’re willing to accept. Knowing your base minimum — the number below which you’ll walk away — is crucial.
It’s easy to get flustered and lose your stance during actual negotiations. Arming yourself with a salary range beforehand can keep you firm and focused on your desired outcome.
6. Research the Industry Rate
Think of your skill or service as a commodity. Is it available everywhere, or is it something that’s harder to find? Are you great with time-management and more efficient than others? Are you offering a specialty service that merits a premium market value? All these play a factor in the freelance market.
Do some prior salary research on what similar contractors in your industry are earning. If you’re being paid below average, consider the reasons why — maybe there are certain capabilities or more years of experience others offer that you don’t.
If this is the case, you might want to beef up your skill set or experience before asking for a raise. (Actually, any time you further your expertise, it makes sense for your rates to change accordingly.)
On the other hand, if you can prove you’re on par or even above industry standard, you’re at an advantage to negotiate for a raise.
7. Don’t Forget About Other Perks
Base salary is one point of negotiations. While it’s definitely the most important, as you can rely on it at the end of the day, there are many other things that may sweeten the deal.
Consider additional pay based on performance, a scheduled salary increase, or other benefits and perquisites (i.e., using the company car, getting access to office equipment).
Sometimes, especially in the case of younger clients or startups, cash flow may be a bit tight, and they really can’t offer much more in terms of monetary reward.
So if you enjoy the work you do for them (and don’t have such a tight cash flow yourself), these supplementary perks may be something to consider if the client really can’t meet your requested rate.
8. Have an Exit Strategy Ready
What if your client can’t accommodate the raise? This scenario is not pleasant but still highly important to think about.
When anything in a contract changes, there’s always a chance one of the parties won’t be in agreement. This is especially true with matters of money.
Therefore, before you start to rock the boat, it’s best to have other clients or work options in mind. This allows you to negotiate with confidence and not be too worried should they refuse the raise. If the client doesn’t agree to an increase in your current salary now, it’s not likely they will in the near future.
Plus, working with fewer clients for higher pay is better than spreading yourself too thin for too little compensation. And it’s best to seek out clients that value your work as much as you do.
9. Always (Always) Keep It Professional
Clients generally understand that rates will increase over time. Therefore, it’s best to state your case and not make the discussion a bigger deal than it has to be — if you do, the client probably will too.
And no matter the outcome, always see your contract through to completion. Be flexible about the turnover period and responsive if the client has any follow-up inquiries.
As an independent contractor, it’s to your benefit to have as many satisfied clients and good reviews as possible — even if the project must come to a close.
Get Paid What You’re Worth
Time and energy are an independent contractor’s most valuable resources — and it’s part of their job to make sure this value is compensated with fair rates.
For most of us, this doesn’t come easy. But if you apply the tips above, along with a little bit of planning and preparation, the next time you ask for a raise will be a much better experience.