How to negotiate a contract extension
Even though contract work is normally for a fixed term, there is often an opportunity to renew or extend a contract with a client or company.
How do you know when it’s a good time to explore this, and how easy is it to set your own contract dates or request a pay increase? What do employers expect, and how do they prefer to be approached?
These eight steps will help you figure out the most appropriate way to go about negotiations and best prepare yourself for the conversation.
1. Choose your timing and start early
Don’t leave it until the last minute and don’t rush the process.
Depending on the length of your original contract (if it was six months or more) then look to start talks three months before the end so you have time to make other plans if your contract isn’t renewed. These things can always take longer than you expect.
Content Marketer and business owner, Chris Worth advises, “your main action should be to drive the process. Three months before the end date, review how well it’s gone and suggest a new scope of work (at an additional fee). The main goal in contract renewal is to make the next year more profitable for less effort.”
2. Have the right relationships in place
Build open, honest and positive relationships from the start of your contract with all the stakeholders and make sure you are appropriately letting the right people know about everything you’re achieving.
Have your new contract discussions directly with the decision maker(s).
3. Be clear on what you’re asking for
Have a suggested proposal in place about how things should move forward, and be clear whether you’re going for a contract extension (extending under the terms and rates of your existing contract), or a contract renewal, whereby you can renegotiate your dates, terms and rates from scratch.
4. Go in with the right attitude
Be calm and confident. Prepare some notes to take in with you about what you’ve already accomplished in the role, what you’re asking for. As well as your plans for what you can achieve in the future.
Take on board any feedback they have, jotting down any key points and make sure you demonstrate a willingness to be flexible.
5. Know what you’re worth
Request an increase in your rate taking into account your additional experience with the company, your achievements during your previous contract period and inflation. Also, do some research on the current average rates for similar roles and make sure your rates are aligned with this as a minimum.
Be clear why you deserve this rate and how you are benefiting the client. Don’t forget about your qualifications, skill set and industry experience.
Track your accomplishments throughout your time working for the organisation and don’t be shy about sharing these in the meeting, particularly if they’re directly related to cost savings or generating revenue. Being prepared to talk frankly about money demonstrates business acumen and confidence in your own ability. It also avoids any confusion, so don’t shy away from discussing pay and be certain what you’re going to ask for as a rate before you start.
6. Be prepared to compromise
Aim high with your rate and other terms, but be prepared to accommodate the client’s needs and to meet in the middle if necessary. Be clear in your own mind the minimum rate and terms you are prepared to go to before you start the meeting.
7. You can negotiate more than money
This is your opportunity to agree on anything related to your job for the foreseeable future. As well as pay this could be about expenses, hours worked, where you work from, new equipment required or reporting processes.
8. It’s not about winning or losing
Try not to take the negotiations personally and remember that they will get easier with experience. If things don’t move forward it doesn’t mean you’ve ‘lost’ or you’ve done a bad job, but simply that you haven’t been able to come to a mutual agreement that works for both parties.
If the negotiations are unsuccessful then make sure that you leave on good terms. How you cooperate and deal with situations like this will say a lot about you as a person, and it’s not unusual for situations to change or for you to cross paths with the same people again later down the line.