The huge secret no-one ever told you about negotiating temp rates

The “big secret” when it comes to negotiating with clients about temp Bill rates is to shift the clients focus from the RATE, to the COST!

If you allow all the focus to remain only on the $ value of the hourly rate, then you have very little negotiating leverage. The client quotes another agency that will “charge less, for the same job”. If you argue about the hourly rate only, you have nowhere to go, because less $ is less $!

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But if you focus on the other part of what the client said, then you have plenty to discuss. I am referring of course to where the client says another agency will charge less “for the same job”. That’s the weak spot to tackle in a client’s argument. Will the client indeed get “the same job” done by the cheaper option?

NO is our argument, and it could cost the client plenty.

So for example, let’s say you are suggesting to a client that a mid-weight freelance graphic designer is going to cost her $50 per hour. The client says “That’s expensive – I can get a graphic designer from your competitor for $45”. You see, the client focuses on the rate only.

Most temp consultants cave in at this point. They reduce the Bill rate to win the assignment. That teaches the client that our rate is negotiable, and it immediately reduces our margin, and that’s bad!

A more appropriate strategy is to focus the client on the comparative COST of the entire project. Get the focus off the hourly rate. How? Well, like this usually works…….

“Ms Client, all our graphic designers have been interviewed, screened and tested for both their skills and their attitudinal fit to do freelance work. In the case of the person I propose to provide you for this role, she has worked for us many times before, and I have many glowing testimonials on the calibre of her output and her initiative and accuracy. Ms Client, the person I will provide you will come in, sit down, and start being productive from the first hour. She will make minimal mistakes and the quality of the outcome will make you very happy indeed. What’s more, she will do this project within the two-week time frame you need. To get someone of this calibre we need to pay $50 per hour.”

But $50 x 8 hours x 10 days = a total cost to you of $4000.

“If you take the cheaper option Ms Client, you may well pay $45 per hour, but it is most unlikely you will get the calibre of individual and the quality of work I am promising you here today.”

“Indeed, your $45 an hour person is likely to take longer to do the job, absorb more of your time, and quite possibly make more mistakes.”

So $45 x 8 hours x 15 days = a total cost to you of $5,400.

“The so-called ‘cheaper’ option Ms Client, will cost you far more!”

“It’s the quality work done at the best cost that I am offering you, and that’s why I am suggesting my talent at $50 is in your best interests.”

What day can she start?

That’s the way to sell quality temps!

If your client wants a great freelance experience, and the client wants their problems solved quickly and accurately, the price may be a little higher, but the value will be measurably better!

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About Greg Savage

Over a career spanning thirty years, Greg Savage has established himself as a global recruitment leader. Greg is a regular keynote speaker at staffing and recruitment conferences around the world.

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8 Responses to The huge secret no-one ever told you about negotiating temp rates

  1. Neil D February 23, 2011 at 9:51 am #

    Another great article – logical and inspiring to read. It transfers the argument from cost to value.

  2. @Blackers3047 February 23, 2011 at 2:36 pm #

    In today’s transparent and honest world, selling and more importantly adding value is what a client needs. A client who is given this sort of insight and support will come back to you time and time again. Great article about how to sell your expertise

  3. Surya February 23, 2011 at 3:35 pm #

    Of course, the temp person you have sold to the client must not slack and must live upto all the things you have promised to the client 🙂

    • Greg Savage February 23, 2011 at 3:43 pm #

      That is an excellent point Surya. “Over- selling” a temp will cause a huge loss in credibility and the client will never believe your “value” argument again. You can only sell this as I have described if you truly do have a great temp to provide

  4. Tom February 23, 2011 at 4:16 pm #

    As someone who regulary hires temps I am always willing to pay more for the strongest candidate. However I am not prepared to pay stupid recruitment fees I.e. visability of fee structure and a sensible rate then more than happy to pay the extra for the strongest candidate. As the fee is always a % of candidate pay..the more the candidate the larger the fee. More than happy to pay recruiters decent rate but really annoyes me when recruiters get greedy, i.e. recently worked out that one contracting agency was trying to charge me what would have worked out as $40K in fees for a $65K candidate the life of the 12 month contract….. (after on costs)

  5. John March 24, 2011 at 2:05 pm #

    I like this approach too…..we often have consultants trying to defend rates by saying we are ‘niche’ or specialist…..which really means we source, screen and select candidates better than anyone else because of both out processes and knowledge…..they just dont say it as succinctly.

  6. Mick September 8, 2014 at 11:22 am #

    I can’t really see this holding up as a logical argument. Because the other candidate is cheaper (which you know nothing else about apart from this fact) they are less likely to be as good at their job is absurd. Any half-switched on client would see straight through this.

    • Greg Savage September 8, 2014 at 2:47 pm #

      I take it that you have not actually tried this strategy Mick? I have. About 200 times. Mostly works. Not always.…Greg

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