How to negotiate on a contract?

  1. Hello!

    Does anyone have tips on how to negotiate on your contract? What portions of the contract are the most negotiable (e.g. base rate, OT rate, housing stipend)? Are you supposed to tell recruiters up front "I'm looking for x amount as a weekly take home"?

    Any input would be greatly appreciated!
  2. Visit WanderingVee profile page

    About WanderingVee

    Joined: Apr '18; Posts: 6; Likes: 1
    from NY , US

    7 Comments

  3. by   ChrisMMS
    Recruiter here. If you are having to negotiate your contract it means your agency/recruiter is holding money from you. As a traveler you should never need to be a better negotiator than you are a nurse. I would be up front with all the agencies you work with and ask what percent margins they work on this can range from 20-35 percent. If you have a certain contract in mind I would specifically ask about the bill rate of said contract and compare and contrast pay packages with other agencies. If your recruiter/agency states that they aren't allowed or can't tell you the bill rate I'd be a little nervous of them hiding something from you. Pay packages should be flexible to your customization, but the gross/net should be almost identical if you are factoring them on a 36-40 hour work week. For example if my nurse expects to work a lot of overtime we can make sure their overtime rate is as high as possible, but their gross/net on 40 hours will still be identical. I would just be upfront about what weekly number you are looking for which will help narrow your search down, but also be aware of what is realistic. Best of luck to you!
  4. by   Argo
    Sorry chris but a travel company and recruiters job is to make money.

    As a traveller, i say shop around, see what the highest going rate is for the location and area. It will be a give and take for what you need(benifits vs pay) but always ask for what you want and make them meet you closer to your goal. If a recruiter wont work with you then move on.

    Companies make their money based on the difference between their bill rate to the hospital and the overall rate that they pay you. Some have higher margins and keep more of the money to cover it.

    Ill add that i have negotiated up even after getting an offer. If you have experience(plus successful travel experience) and good references you can do alot more with negotiation. I have increased my weekly by $200 by doing this.
    Last edit by Argo on Apr 21
  5. by   NedRN
    Quote from WanderingVee
    Does anyone have tips on how to negotiate on your contract? What portions of the contract are the most negotiable (e.g. base rate, OT rate, housing stipend)? Are you supposed to tell recruiters up front "I'm looking for x amount as a weekly take home"?
    Hi WV. I'm going to start by agreeing with Argo: shopping around is your best bet. That cuts right to the chase, how much you are going to make without one iota of negotiation. Just like you shop best price for anything else without negotiation and you will learn what your fair market value is in a given market at a specific time for your specialty and experience.

    Second point, you don't have a lot of value to either an agency or hospital at the moment. You need proven experience as a traveler so they know you can adapt quickly, hit the ground running, and are not as big a risk to bail. So forget about chasing money for your first assignment. Instead, you are looking for a traveler friendly assignment well within your skillset. And at least one good recruiter on the same page, putting your needs first.

    Third point, Chris mentioned a gross profit margin. This is what an agency needs overall to cover their costs (recruiters and marketing and offices don't come cheap), and make some net profit. But you don't care (any more than what Walmart pays for stuff you buy there). Some agencies may work on a higher gross profit margin (meaning they pay you less of the bill rate), but they may have higher bill rate assignments. What matters is what you get to keep, and the only way to find out is to shop around.

    That said, that same gross profit margin means your portion of the pie is relatively fixed. Easy enough to negotiate if you simply want to shift say to a lower base rate and a higher housing stipend (actually many agencies won't do that, but smaller agencies will). That is zero sum negotiating, not costing the agency a cent, just shifting how they cut up your portion of the pie.

    Yes, with experience, you can demand more pay. Argo is a very experienced nurse with extensive management and proven travel experience in a very hot specialty. He can demand more, and an agency will still love to have such a valuable traveler to send to valued clients even if their margin is lower. Good business. Hopefully you will be in such a position some day.

    So there is an article specifically on how to negotiate a travel contract with an agency. You can find it online at PanTravelers. It is behind a pay wall, I believe that annual membership is either $60 or $65 dollars. I wouldn't pay that now, you don't need it. But if it does raise your pay by even $1 an hour, that is $2,000 annually.

    There is a free option that gives you access to about 80% of the content, which includes everything a first time traveler needs to know. That includes a calculator that will help you with agency offers and boil them down to a single number you can get. Quotes are impossible to compare directly without a lot of math and the calculator helps a bunch.

    Good luck!
  6. by   NedRN
    Quote from ChrisMMS
    <snip> I would be up front with all the agencies you work with and ask what percent margins they work on this can range from 20-35 percent. If you have a certain contract in mind I would specifically ask about the bill rate of said contract and compare and contrast pay packages with other agencies. If your recruiter/agency states that they aren't allowed or can't tell you the bill rate I'd be a little nervous of them hiding something from you. <snip>
    Hey Chris, it is great that the honest approach works for you. There are a couple other agencies that like to be upfront with their gross profit margins (although not always completely honest about how they calculate them), but most businesses do not discuss their spreadsheets or costs of doing business. I would never suggest to a traveler to ask, in part because it is rude question, and as I explained just above, it is irrelevant. When you cross shop for anything from say Costco, Walmart, and Amazon, do you call their management team and demand to know what that item actually costs them? While an honest answer would be interesting to a business minded person, all you really want to know is how much it will cost you.

    By the way, if a recruiter says they don't know their agency's gross profit margin is, nor what the bill rate is, they are not necessarily lying or untrustworthy. Some agencies provide their recruiters with a spreadsheet based tool that says what the max rate they can offer is. That and a suggested starting rate - some discretion is used here of course depending on experience et cetera. Recruiters are in sales, and every one of them tries to "qualify" travelers. "Who did you work for previously, and what did you make?", similar to a line of questioning from at a car dealership. You can tell a lot about a traveler's compensation expectations from where they were staff, and particularly what agencies they have worked with so far.

    So that is all a big game, and one you have chosen not to play. Good for you! But you know how most businesses, especially travel companies work. We travelers have to work with them if we are to get the widest options and learn our market value.
  7. by   WanderingVee
    I guess I should have put a little context into my post, but I worked at a large teaching hospital in NYC for 3.5 years before starting travel nursing. I have 2 assignments under my belt and I'm currently in the extension of my 2nd assignment (I'm told it looks good to have an extension on your resume, correct me if I'm wrong). So I have some experience but I'm still fairly new to travel nursing! I have no experience with negotiating and feel like I'm generally timid when it comes to asking for what I want

    I've been asking around to different agencies and I've been told by a couple of them that their rates are non-negotiable because they give you the lowest base rate so they can maximize the non-taxable portion. Is that a red flag or would it be worth it to move forward with these companies?
  8. by   NedRN
    You simply have to do the math to figure out who pays the most, and which offer has the highest take home (not the same thing). The calculator I mentioned can help you with that.

    No red flag otherwise. The risk in paying low hourly and high stipends is completely the agency's risk. Your hourly wage will not be reported to the IRS, and if in an audit of the agency or yourself, there are no penalties to you for not making enough taxable wages. Stipends are completely legal as long as you meet the requirements of maintaining a tax home and working away from home. If you don't maintain a tax home and residence, that could get very costly in an audit and all your stipends would be subject to back taxes, interest, and possibly penalties.

    A point about low hourly, it would really suck if on hour 37 or 41 you took a big pay cut. Treat overtime rates as a completely separate negotiating topic and if the agency has a firm time and a half policy, move on. Don't bother wasting negotiating energy on overtime unless it is both available on a particular assignment and you want it. Take no less than $50 an hour for overtime - on most contracts the agency will still be making extra profits on each OT hour you work. There is actually a separate article on PanTravelers on negotiating overtime!
  9. by   WanderingVee
    Ok thanks!

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