Establishing Rates: Getting What You Want
As an independent IT contractor, your credentials, references and work examples are probably among the top three things you can use to command the rates you want. But unless you’ve been working in the industry awhile, particularly as an IT contractor, you’ll likely need some baseline information on which to base your salary requests.
Unfortunately, you probably won’t find a handy Web site that states exactly what you, personally, should charge for contract work. But you can find the information you need in a roundabout way.
Forums are an excellent place to start mining for concrete numbers, but the fees you can command might depend several variables, including experience, relevant certifications (which can increase your marketability), the nature and scope of the project and the technology market in general.
If you have the right skills in the right market, you can command higher rates than if it’s a down market. If the industry or some segment thereof has experienced a hiring downtown (some say outsourcing has a role to play, depending on your specific skill set), you might have to adjust your fees to stay competitive.
If your skills aren’t in demand or have gone out of fashion, or if there’s too much competition for what you do, you might have to adjust your expectations.
Generally, however, independent IT contractors can command higher hourly rates than their full-time counterparts. The independent, though, also has to pay for health insurance, other benefits and taxes from those wages.
Another factor that might affect how you establish your rates is your location — if you’re in an area that values technology and has an appreciative attitude toward its contribution to the business environment, it’s likely that you can ask for and receive more money.
For instance, Northern California is the home of Silicon Valley and has many software and technology companies that need a variety of skilled tech workers. But the cost of living is also high, finding affordable housing can be difficult and commute times can prove arduous.
The greater Boston area and the Pacific Northwest (Microsoft headquarters is in Redmond, Wash.) are also home to many software companies and high-tech industries. Peruse tech recruiting sites and job boards for salary numbers. Post questions in forums for other independent techies who might be willing to share information on how they calculate their billing rates. Certification Magazine publishes results from its annual salary survey in the December issue, and this might provide some useful baseline information.
The CertMag salary survey also queries popular certification and training expense data, which you might want to consider as you position yourself to earn top dollar.
Weigh gathered salary information against your marketable skills and experience. Factor in your cost of living and expenses such as educational costs related to newly earned certifications, and use all that information to come up with hourly or project rates, but be prepared to negotiate.
Information is power, especially when you’re trying to squeeze the almighty dollar.