Lowballing (Pitches in the Dirt)

[Tidge]

I have the luxury of being somewhat choosy w.r.t. whom I work with, but I'm never not surprised when someone tries to lowball me after an initial set of discussions regarding both the project and the expected rate. I've heard a lot of excuses, but I'm convinced for some people it is a cross between a negotiation tactic and a power trip... it's not like I come back and offer "well, now that I've thought about it... this will take 25% more time" or "How about I only give 80% effort?" or "How about we agree to only get 75% done?".

I've had a couple of recent conversations along these lines that really stuck out:

1) President/Principle owner of a startup has a firm calendar date that is highly aggressive with a set of things outside of company control, but with well known $$ costs on the order of $400M and a LOT of work to do to get to that point. Contract would be for 6 months max, with ability to end contract at any time (basically work-for-hire) any time prior to end date... and the President can't make the offer because he's hung up on what would be at most $15K on top of a pretty modest rate that his previous employees left his employ over!

2) Company needs (three) unicorns... looking for a triple-headed unicorn... obviously a LOT of work, reasonably well-defined contract scope but there will also obviously be some crossover into at least one of the other uncovered areas. Everything is agreed to, but again it comes down to "we took a closer look at the budget and we need the rate to come down $10/hour"... and I'm thinking that they probably needed a fourth unicorn to plan their projects/budgets. This was another supposedly well-defined project, so again we're talking about expenses on the order of $10K.

I've been (a spectator) on the other side... a company really flubs a project (years overdue, several million $ spend with nothing to show for it)... the company finds an external resource (team) willing and capable of tackling it and committing to a believable project plan (true deliverables, metrics and milestones) at a cost that is a fraction (significant) of the money wasted so far... then the company lowballs the offer and gets disgusted when the external team walks away. The company ended up spending more time and $$ than was externally projected to finally get a half-baked version of the original concept complete. This experience felt like "hey, we spent 4x the money and took a decade+, but now we don't have to share the credit!"

 

[yodon]

I think some companies EXPECT you to come in high and negotiate down. That's generally a red flag for us. They're often extremely difficult to work with, quibbling over an hour here and an hour there.

Other companies think you should bill out at the rate of a lawn mowing service. I generally remind them that, for example, a diesel engine mechanic bills out at $250 an hour. They tend to get the idea - but rarely pony up for the expenses.

 

[Golfman25]

Well you're only worth what you're worth. If the company doesn't see it, then move on. Of course, you can also price yourself out of the marketplace.

 

[Tidge]

Well you're only worth what you're worth. If the company doesn't see it, then move on. Of course, you can also price yourself out of the marketplace.

Re: pricing yourself out of the marketplace: ¯\_(ツ)_/¯. In the two cases I mentioned... I certainly wasn't going to be challenging the ceiling. When I had a full-time job, I had to manage contract work where almost always the contract was devised by and agreed to by someone else. As a result of a decade+ of that... I could pretty quickly tell if we were getting our $$ worth.

I came to believe (and little has changed my opinion) that for a significant number of people in the industry I work in who are looking for help: they either don't believe or don't know how to tell if someone else is capable of doing the job they are hiring for. I've had people say things like "If I knew how to get it done I'd just do it myself"... which is not the default (or most efficient) attitude when it comes to most life tasks (surgery, auto repairs, etc.) I only mention this because neither I nor the folks I know who work similar gigs are asking to be paid like senior VPs.

As noted and quoted... sometimes the way folks approach project contracts tells a lot about the way people think and the likely nature of the job.

 

[Golfman25]

Re: pricing yourself out of the marketplace: ¯\_(ツ)_/¯. In the two cases I mentioned... I certainly wasn't going to be challenging the ceiling. When I had a full-time job, I had to manage contract work where almost always the contract was devised by and agreed to by someone else. As a result of a decade+ of that... I could pretty quickly tell if we were getting our $$ worth.

I came to believe (and little has changed my opinion) that for a significant number of people in the industry I work in who are looking for help: they either don't believe or don't know how to tell if someone else is capable of doing the job they are hiring for. I've had people say things like "If I knew how to get it done I'd just do it myself"... which is not the default (or most efficient) attitude when it comes to most life tasks (surgery, auto repairs, etc.) I only mention this because neither I nor the folks I know who work similar gigs are asking to be paid like senior VPs.

As noted and quoted... sometimes the way folks approach project contracts tells a lot about the way people think and the likely nature of the job.

Maybe. But there is an old adage -- the customer sets the price.

 

[yodon]

Another one: you get what you pay for!

 

[Tidge]

Another one: you get what you pay for!

Even if a company is super-secret about its internal wage scales, I've never been at a place where folks with the ability to hire and/or approve contracts didn't know what the scale was... certainly everyone knows how much they make.

In one of the two examples I provided: The company has actually lost someone (who couldn't do the proposed job, but also wasn't going to be asked to do that job) because they were underpaid as a full-time employee. The pushback I got was "we wouldn't pay someone I *liked* the extra $/hour, why would I pay *you*?" I suspect that guy was thinking with something in his pants, and I'm not 100% sure it was his wallet.