No one will have missed it: rising energy prices have pushed inflation to record highs in recent months. December took the cake: the price level that month was 5.7 percent higher than a year earlier. Inflation for the whole of 2021 was 2.7 percent, according to figures from the Central Bureau of Statistics (CBS). And the currency depreciation does not stop: Rabobank is counting on 3.8 percent for the current year.
As a self-employed person, it is wise to adjust your rates accordingly, says Leo Kits, spokesperson for ZZP Nederland, a foundation that represents the interests of 53,000 self-employed people. Although collectively negotiated wages were also unable to keep up with inflation last year, employees with a collective labor agreement usually see their wages increase ‘automatically’ every year. Self-employed people have to see to it that their income increases. “Whoever uses the same prices for years, keeps less and less income and cuts himself in the fingers,” says Kits.
The Netherlands has about 1.1 million self-employed persons, according to the CBS. And for them, this is the ideal time to propose a rate increase, thinks Jeanette de Haas, negotiation coach and freelance buyer in ICT and telecom. Not only because of the high inflation, but also because of the tight labor market. “In the construction, finance, ICT, healthcare and legal worlds, freelancers are now being drawn from all sides. Clients know how difficult it is to find good people and they benefit from keeping people on board.”
If you want to propose a higher rate, you should first thoroughly explore the market, says Leo Kits. “So that you know what is normally paid for self-employed people with similar knowledge and experience.”
In the fifteen years that he manages the helpdesk of ZZP Nederland, Kits noticed that many self-employed people find it complicated to determine a reasonable hourly rate. He usually refers them to online tools, such as the rate check on loonwijzer.nl. “That can help, but I especially advise people to ask colleagues what they earn. Or do the math yourself: what are my fixed costs and what do I have to earn to be left with amount X?”
‘I’m going to raise my rates’ sounds different from ‘actually I want to raise my rates’. Whoever brings it so hesitantly leaves too much room for discussion
Jeanette de Haas negotiation coach
The work location plays a role in this. “If you work in the Randstad, you can charge a higher hourly rate than in Groningen. You also need more money to support yourself.”
If it is clear which rates are usually used, you can adjust your arguments accordingly, says De Haas. “If others are earning 70 euros an hour and you are at 65, you have a strong bargaining position, regardless of inflation. But if your hourly rate is already around the market value, it is smarter to use the consumer price index. Then you can show that all prices are rising, and so is your rate.”
Although calling about a rate proposal may be more stressful than emailing, it is still wise to pick up the phone, says De Haas. “Then you hear how your message falls and you can respond immediately.”
She recommends practicing beforehand what exactly you want to say, because subtle differences in wording can have a big effect. „’I am going to raise my rates’ sounds different from ‘I want to raise my rates’ or – even worse – ‘actually I want to raise my rates’. Anyone who puts it so hesitantly leaves too much room for discussion.”
In addition, make sure you have enough ammunition to defend your higher hourly rate, says Kits. „Do you have more experience? Have you taken courses or been given more responsibilities? Do you notice that you are well placed in the market and are you being pulled a lot? These are all things you can put forward as arguments for a rate increase.”
Deal with resistance
Talking about money is difficult for many people. “They’re afraid of rejection anyway,” Kits says—and that fear isn’t always unfounded.
In some fields, the price is pretty much regulated, he knows. “Think of interpreters and translators who want to work for ministries. Ministries often provide a rate indication and outsource the hiring to a broker. He skims off the rate to cover his own costs. If you are lucky as an interpreter or translator, there is still some room for negotiation with the broker, but that is not always the case,” said Kits.
What to do if a client does not want to move an inch? Think in advance about the consequences you want to attach to this, says De Haas. Does that mean the end of cooperation? Do you indicate that you keep the door ajar for other assignments? Or do you not want to let the relationship blow, even if that means you earn less? Knowing what to do in such a case ensures that you don’t get mugged and say things you’ll regret later.”
Fear of being blunt should not be a reason not to enter into the tariff discussion at all, says De Haas. Making your financial wishes known shows that you take yourself seriously. “Sometimes freelancers tend to bend a lot with their clients. They do not enter into the conversation at all, or in such a half-hearted way that the client immediately feels: I can steer this in a different direction.”
But, she knows, anyone who proposes a rate increase in a positive, firm way will notice that there is often more leeway than previously thought.
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