Negotiating Tips For Consultants

A lot of us are working as consultants these days. We do not have the rights and privileges of an employee. A lot of us are sole practitioners. How do we insure that we do not get lost in the shuffle when it comes to getting the right compensation and that we get paid on time as per the stipulations of our contract?

I am hearing more and more of an issue with regards to this subject. Consultants get hired often when the company has an immediate need or there is a pressing problem confronting the organization. Quite often consultants are asked to start working immediately. Therefore, the terms of the contract are finalized after the work starts. Consultants beware! Here are some ways consulting agreements are negotiated:

A straight competitive hourly rate: factor into this rate a competitive base rate, add to that benefits and an overhead burden. If you have any kind of a specialization and if you are on your own, the current competitive rates are from $70/hour to $250/hour. Do not be shy about asking as high a rate as possible. Remember the organization wants to hire you because they have a serious need. Do not back down here. Also ask for a regular payment deal, if you go into invoicing, then get ready the collections game.

A combination of stock and cash: the stock potential can be very alluring but be ready to aggressively manage this deal. Work out an upfront schedule of when you going to receive the stock. Most regular employees get stock right after they start working. Never hold off receiving stock until after your assignment is over. While you are on the project you have more of a leverage to get what you deserve. If you hold off till after you finish the project you can get forgotten, things change, new people come in and your ability to receive what your contract calls for gets more challenging. My advice to people on this subject is that individual consultants should develop a very secure contract for themselves spelling out items that you want to cover and have your clients sign this contract. Usually clients have a very elaborate contract for you to sign, sign that but still have them sign your contract also.

Consultants who are temporary workers often can get forgotten in the shuffle, therefore if you are a consultant aggressively manage the business side of your assignments. Pay as much attention to the business side as you would to subject matter you have been brought in to deal with. Be assertive and protect your rights!!!

Intrinsic Rewards

In the pay ethos is cash the only desired outcome? I do not think so.

In this "flat world" with "cloud computing" dominating our beings, we are finding out that knowledge is a key ingredient of organizational success. Thus "knowledge workers" require from more their work environments more than just a paycheck (don't misunderstand me, all us want that also - because cash is still king). "Knowledge workers" want and need "intrinsic rewards" And by the way in these tough economic times, an organization that can be creative in designing and implementing these "intrinsic" programs will save cash as well create a desirable work environment.

Thus, I get a lot of questions like - "Can you elucidate on what knowledge based organization that strive to be "world class" are providing by way of employment conditions to attract and retain "world class" talent into their organizations".

Here are some current trends:

Flexible working hours - this program provides employees the ability to spend time with their children or to schedule their commutes to avoid rush hour traffic. This provision includes the opportunity to telecommute a few days a week on a rotating basis.

Longer vacations - paid vacations are great, but so is unpaid time off. How about doing unpaid time off instead of lay-offs? A novel idea, right? Offering hard-working employees extra vacation time to visit relatives, take a cruise or take a class are all very attractive to employees.

An attractive work environment - making the surrounding pleasant, neat and clean. Plants, posters or paintings all make the environment pleasurable and fun.

Discounts or free use of company products and services - the simple gesture of making office computers available to employees for after hour use can go a long way to make it attractive for some employees.

Sponsoring community activities - employees like to work for companies that sponsor community activities. Youth soccer, the Little League, United Way are just some examples of this type of community support.

Recreational activities - company picnics, special occasion lunches, "attitude adjustment hours", a day at the ballpark, are all very attractive propositions to employees. These activities break up the monotony of day-to-day work, especially when employees have been putting in long hours.

Tax-free $2000 bonuses - companies are offering company-sponsored and funded savings plans to new and part-time employees who have not yet qualified for the pension plan. In some countries the tax laws allow such programs to operate. 

All of these small gestures make an organization attractive and desirable to work in. Therefore, more and more start-up companies who thrive to be "world class" are introducing such programs for their employees.

 In conclusion, I say that organizations that focus on these "intrinsic" rewards in conjunction with the "cash" component create an attractive and rewarding work culture.