Negotiating Salary or Hourly Rates - Updated 2021

Recently I received a request to write a blog post about negotiating salary and/or hourly rates.  I've avoided this topic until now because the financial aspects are always a complicated and touchy subject.  

I'm certainly not giving away any trade secrets when I say that consulting firms and staffing firms make their money by placing Healthcare IT Professionals at their client sites for either contract work or permanent placement.  

Placing someone into a permanent position is usually a cut & dried affair.  The firm will source, approach, screen and present qualified candidates to their client, if one is chosen and agrees to employment the firm will receive a % of that person's first year's salary as a "finders fee".   The industry standard is 20% but it can be higher or lower depending on the type of position being filled and the rates agreed upon by the client.  

With regard to contractors, the firm follows the same scenario as above but the candidate will be retained for a specific amount of time to complete a specific project.  Regardless of the employment method the consultant chooses (corp to corp or W2) the firm will bill their client at a higher rate than they are paying the consultant to increase their bottom line.

A firm determines the client bill rate by considering the following factors:  the consultant's desired hourly rate, the "burden" to carry that consultant (man hours spent for recruitment, any necessary care the consultant will require during the contract, cost of pay rolling, any benefits provided, liability insurance and how long the contract is expected to last etc.) and X amount of dollars for profit.  The rates charged to clients vary a great deal in this industry, in particular; large consulting firms tend to charge higher rates than the smaller staffing firms.  

So, what does all that mean when it comes to negotiating rates? 
> If you are seeking a salaried position, your rate is going to be whatever yearly salary you have determined makes sense to you.  Your recruiter will ask you up front for a figure, and I suggest you give them one.  If you're needing $120K and their client is only willing to pay $80K for the role, then you are aware immediately it isn't a fit.  Always be forthright about your salary demands.  If you want an idea what the industry standards are in a particular geographical location - check out: www.glassdoor.com

>Being an hourly contractor is a bit more complicated, due to COVID-19, the hourly rates have dropped across the industry. The best practice is to be flexible with your rates, but have a hard stopping point.  Also, take into account other benefits of a particular engagement and adjust your rate accordingly:  does it offer100%  remote work, does it require extensive travel, is it a long term engagement, will you learn new skills or gain new certifications, are there difficult tasks associated with the role, and so on. 
Below is a list of industry averages for various roles, and a few reasons why you should work through a consulting firm  instead of trying to work directly for the healthcare / hospital system. Keep in mind these rates are just an example and can vary quite a bit due to numerous factors.* 

Go-Live Support Analyst -  $30 - 55  / Hour
Trainer -                               $55 - $75 / Hour
Certified Trainer -                $65 - $95 / Hour
Junior Analyst -                   $45 - $75 / Hour 
Analyst -                              $55 - $85 / Hour 
Senior Analyst -                   $65 - $110 / Hour
Project Manager -                $75 - $150 / Hour 
Project Director -                 $95 - $175 / Hour 
(the above rates do not factor in travel expenses)
*The rates above can increase dramatically if you have a clinical background or specific certifications.

Reasons to seek contracts through consulting or staffing firms:
1.  The firms have direct contact to the internal hiring managers and can communicate your strengths directly to them.
2.  The firms can offer healthcare benefits during the engagement
3.  The firms will continue to negotiate extensions for you.
4.  The firms will work to find you future engagements

Reasons to seek permanent employment through staffing firms:
1.  The firms have direct contact with the internal hiring managers and will present your resume directly to them, on the other hand, when applying via a hospital web site your resume often falls into a "black hole" or it has to be processed through HR before the IT hiring manager ever sees it.
2.  The firm will negotiate your salary requirements (and it's in their favor to get you higher pay)
3.  The firm can often present your resume to multiple clients
4.  The firm may have a number of roles that are not posted online
5.  The firm normally has developed a strong working relationship with their client and might be aware of upcoming roles that would interest you but have not yet been announced.


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