Author Topic: Asking for a raise - pissed off even though I got what I want  (Read 7011 times)

jzb11

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I'll keep it short and sweet

I'm working as a contractor (1099) on a special assignment
Customer personally requested me
Customer is satisfied and requested to renew contract with my employer for another year
There are no other people in the office available/capable to perform said project
There is a 40$ difference between what I bill the company and what they bill the customer

I asked for a 10% raise because my costs have increased considerably this year (business insurance, ACA, etc).

Informal negotiations began, I said I could take 5.5% which would cover my costs.
They counter the next day with 1.5%.
I'm insulted and effing pissed that they would even consider offering that number.
I tell them I ne d 10% and can't take anything less at this point.
they make me out to be a bad guy, give me a hard time. I have to threaten to quit and pack up
Ultimately I get 10%.

Anyway the whole thig has put a terrible taste in my mouth. I have all the leverage, could ask for more than what I asked for, and really would've taken 5.5% to cover my costs. But because they dickwads had the audacity to dick me around and offer me 1.5%, i became infuriated to the point where I'd walk away from it all - a pyrrhic victory but one I could afford to take due to having a nice sum of FU money.

All of this just makes me want to FIRE even more, and get the hell out of corporate America.

mm1970

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #1 on: January 25, 2015, 05:08:45 PM »
Yes, it seems like some companies really try and jerk you around.  I have been on the receiving end, and it's no fun.

But you won, so take heart.  And now you know that it works.  So you can do it again.

gimp

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #2 on: January 25, 2015, 05:23:42 PM »
You did the right thing. Well done on having the leverage to get your raise.

MDM

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #3 on: January 25, 2015, 05:39:05 PM »
...to the point where I'd walk away from it all.
You have just identified one of the most important aspects of a negotiation.  You have to be ready to say "no deal."  Otherwise it really isn't a negotiation - instead, you are relying on the good graces of the other side to give you whatever they see fit.

Before reaching FI, it is pretty much true that Everything you want is already owned or controlled by someone else.  Less so after FI - that's the "Independence" part.

Note if you read the linked blog: personally I don't think one needs to be a "power" negotiator, but it certainly doesn't hurt to understand dynamics that occur when one does negotiate.

CopperTex

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #4 on: January 25, 2015, 06:17:14 PM »
Playing games in the workforce does suck but sometimes you just have to go head to head like animals in the wild. Buy hey, you WON! Situations come up where it's kill or be killed and you should be congratulating yourself for standing your ground and winning. I do understand that it feels sickening to have it come down to that though.

jzb11

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #5 on: January 26, 2015, 01:07:10 AM »
I suck at negotiations (part of the reason my job has gone downhill), but you really shouldn't have told them you'd take 5.5% so quickly.  You should have waited to see what they countered after your initial 10% request. 

In the end, you got what you wanted but now you may have turned the relationship sour -- they are probably thinking "what a jerk, he said he'd take 5.5% and then went back on it."

Glad you got the 10% though.

The issue is that I was naive. Because my goal wasn't to be greedy and make a bunch of extra money, my goal was simply to cover the increase in my costs. And because it's a smaller group within a much larger corp, I thought that I wouldnt have an issue due to the relationships I've made etc.

But once I saw that 1.5%, I realized I was naive and that trying to be reasonable, not greedy, etc was just going to result in me being walked on.

Spondulix

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #6 on: January 26, 2015, 01:32:19 AM »
If you're a contractor, you're technically not asking for a raise- you're telling them your new rates. They have a choice to pay it or to hire someone else, and any negotiation is a courtesy. The fact that you were willing to negotiate will give you leverage when you raise your rates again in 2016. :)

Are you even supposed to be a contractor in this situation? Do you have to work at an office/on their hours/etc?

AlwaysBeenASaver

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #7 on: January 26, 2015, 08:11:45 AM »
If you're a contractor, you're technically not asking for a raise- you're telling them your new rates. They have a choice to pay it or to hire someone else, and any negotiation is a courtesy. The fact that you were willing to negotiate will give you leverage when you raise your rates again in 2016. :)

Are you even supposed to be a contractor in this situation? Do you have to work at an office/on their hours/etc?

This is exactly what I was thinking. 1099 is an independent contractor (ie business owner). You have rates and the customer chooses whether to hire you. You raise your rates and the customer decides whether to continue with you or find someone else. Kinda like if your mechanic raised their hourly shop rate, it most likely wouldn't be negotiable.

starguru

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #8 on: January 26, 2015, 08:23:00 AM »
If you're a contractor, you're technically not asking for a raise- you're telling them your new rates. They have a choice to pay it or to hire someone else, and any negotiation is a courtesy. The fact that you were willing to negotiate will give you leverage when you raise your rates again in 2016. :)

Are you even supposed to be a contractor in this situation? Do you have to work at an office/on their hours/etc?

This is exactly what I was thinking. 1099 is an independent contractor (ie business owner). You have rates and the customer chooses whether to hire you. You raise your rates and the customer decides whether to continue with you or find someone else. Kinda like if your mechanic raised their hourly shop rate, it most likely wouldn't be negotiable.

This.  I played the contractor game for a while.  I hated this aspect of it.  All these companies that hire out their contractors have a job, which is to make the most dollars per hour off their people.  I always found it distasteful when the profit margin got above $20-30/hr.  Invariably I could always find out the differential and was pretty mechanical about getting my rate to a happy place, allowing my client to make a profit, but not so much that it seemed unfair, since after all I was the one doing the work. 

Spondulix

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #9 on: January 26, 2015, 02:15:26 PM »
I have two types of contractor relationships - the penny pinchers who are more concerned about their bottom line than their relationship with me, and people  who are more concerned with the relationship. The relationship-based ones tend to be very open, telling me what their margin is and are cognizant that I am helping them (and clearly value my time). The penny pinchers you can only fight dollar for dollar and you can't take it personally. Those are the ones you have to watch out for anyhow, cause if it's only about money, they'll steal a job from underneath you if they find a solution that's better for them financially.

That's why its so important to maintain a good relationship with clients. I had a client who moved across town and asked if I would join them. It's a totally different ballgame when you're approaching a company and saying, "I have a client and we need somewhere to work." I got offered more money, free lunches, etc lots of perks to try to sell ME on coming to work for them.

bigalsmith101

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #10 on: January 26, 2015, 06:24:55 PM »
I can absolutely sympathize with you. I'll give you my best example as a method of comparison.

I work as a 1099 contractor as well, albeit on temporary contracts, and there was (initially) roughly a 50% difference in amount that I billed the company I work for and what they billed the customer. (If I billed $50, they billed $100)In the first year, I had NO IDEA what kind of value the company was receiving on my behalf.

Fast forward to year two. I'm now being personally requested by our customers. Company offers to pay me more in lieu of taking on more responsibility. Margin drops to about 40%, I keep 60%. I take the offer. I begin to realize my monetary value, AND my capacity.

Fast forward to year 3. I realize that I'm going to be doing this more permanently. I begin voluntarily taking on nearly all of the upfront tasks/responsibilities while maintaining the same contract wage. Company is no longer dealing with customer first hand, but barriers to entry prevent me from replacing the company personally. Eventually, the company does nothing but make money every day I work. I only need them to provide the leads. 3 months later I tell the company I contract to that I want to renegotiate the contract. I tell them I want 85% of the gross contract amount, they will maintain 15% of the contract. They fight back, offering a 30/70 split.

At this point I realize I have the "FU Position" on my side and stand my ground. Either they give me 85% of the contract award rate and settle with keeping 15%, or they lose their best/most valuable contractor and make NO money on my behalf ever again.

They have no option but to settle and accept. I believe they value the fact that I am a guaranteed income generator for them. When I'm on the job, they make money with NO hassle.

I do wonder if there will come a time when I am replaced, but I also know that certain aspects of my job/capacity are irreplaceable short term and thus require long term planning. I.e, I will see it coming in advance. Until then, I'm preparing my FI for future "FU status" negotiations.

dividendman

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #11 on: January 26, 2015, 06:37:50 PM »
At this point I realize I have the "FU Position" on my side and stand my ground.

That's a great feeling isn't it?

rocketpj

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #12 on: January 26, 2015, 08:43:41 PM »
I had a similar experience a few years ago after I quit my office job.  I had burned out as the head moneymaker of their 'consulting' department while making crap wages.  Literally they were billing me out at $700-900/day and paying me $42k/year (which is about $200/day). 

I knew they were making a huge amount off my labour (I had 232 billable days my last year there), and then we had a round of contract negotiations where the boss basically went to the wall to stiff me out of a $1200/yr raise.  I mean seriously.  So I ended up quitting three months later.

Exactly three days after I left they realized that they had $200K in contracts which had my name on them, and which also required a fairly specialized approach which I had developed over the past 5 years.  So my phone rings and they offer to hire me as a consultant at $150/day - the fucking nerve of it just about made me blow them off. The manager who made the offer was so sheepish I almost felt sorry for her.

I had expected the call and had been willing to be negotiated down to $500 until they made that crap offer.  So I told them I couldn't possibly do it for less than $650.  The next morning they accepted my rate and I made more in the next month than I had in the previous 6 months.

Knapptyme

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Re: Asking for a raise - pissed off even though I got what I want
« Reply #13 on: January 26, 2015, 10:14:15 PM »
I had a similar experience a few years ago after I quit my office job.  I had burned out as the head moneymaker of their 'consulting' department while making crap wages.  Literally they were billing me out at $700-900/day and paying me $42k/year (which is about $200/day). 

I knew they were making a huge amount off my labour (I had 232 billable days my last year there), and then we had a round of contract negotiations where the boss basically went to the wall to stiff me out of a $1200/yr raise.  I mean seriously.  So I ended up quitting three months later.

Exactly three days after I left they realized that they had $200K in contracts which had my name on them, and which also required a fairly specialized approach which I had developed over the past 5 years.  So my phone rings and they offer to hire me as a consultant at $150/day - the fucking nerve of it just about made me blow them off. The manager who made the offer was so sheepish I almost felt sorry for her.

I had expected the call and had been willing to be negotiated down to $500 until they made that crap offer.  So I told them I couldn't possibly do it for less than $650.  The next morning they accepted my rate and I made more in the next month than I had in the previous 6 months.

This is awesome. Well done!

In the private sector of teaching, we have an opportunity to somewhat demand our salary for the coming year. I take advantage of this time, and make sure the raise is better than inflation and show my headmaster the numbers from nearby schools, state averages, and other comparables. He appreciates this approach, and because most of my colleagues "need" their job, they just take what they're given, and I get the raise I want. (My wife also gets this raise because we work at the same place with the same amount of experience and education.) It feels good to be a living, breathing, thinking human being.