Recruiting Contractors? Don’t ask what their last rate was.
We think that a Contractors previous rate is of little relevance to the job that you are now advertising.
The job that you are currently advertising will have some sort of value for your company. Various Contractors will be able to do the required job and will tell you what their rate is.
Here’s an example of why a previous rate is irrelevant. The Contractor may have just completed a contract with a low rate. Perhaps they did this whilst waiting for the ideal contract to come along. Regardless of the reason, you cannot use the previous rate to place a value on the vacancy that you currently have.
You will no doubt have a rate range in mind, so it’s OK to put that in the advert. It gives potential candidates an idea about where it fits in with their expectation’s.
Suppose the Contractor has just completed a job that paid twice the market rate due to some specialised knowledge that the company urgently needed. Do you still want value your job based on that?
Here’s another example of why a Contractors previous rate is irrelevant. The Contractor may have just got a certificate in a subject that is valuable to you and one that the Contractor feels justified in charging for.
If you have ever had an Electrician or Plumber do some work on your house did you ask them what their last rate was? Probably not, you simply got them to give you a quote for the job and possibly asked for recommendations.
There are many factors that govern the rate that a Contractor quotes, such as location, remote working options and accommodation costs.
You need to compare applicants on other aspects rather than their last rate.
The job that you need completing should have its own value which you determine by your business needs. If you are basing it on a contractor’s previous rate at a totally different company than yours then you are indicating that you are not entirely sure what the value of the work is. You might ask Sally what here previous rate was, and she says £300 a day. Joe might say £450 a day. Are you really letting these people put a value on your business? You need to determine the value of the work that needs to be done and specify that you are prepared to pay between £375 and £420 depending on how the Contractor performs during the recruitment process.
At UK Software Jobs it’s easy to specify a rate range as shown below.
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