Fee Rate Survey Shows Pressure in 3rd Sector

Skillfair Consultancy Fee Rate Survey 2008

Negotiating fee rates is something that many consultants find difficult, the balance between the risk of not getting the work and the benefits of asking for and obtaining a higher rate can be quite fine and many of us take the easy route and just 'charge what we've always charged'. The economic doom and gloom that's occupying many media pundits at the moment can also sap confidence and lead to pressure on rates from both ends - clients feel they can push back on rates and worry about the economic climate leads more consultants to cave in.

2008 Fee Rates

Skillfair's annual fee survey has been running since 2004 and now provides a useful perspective on both past and present rates that is of benefit to both clients and consultants. This year's survey was sent to over 6000 consultants, interims, freelancers and contractors on the Skillfair database and attracted over 500 responses. As well as usual breakdown by skill area, we asked consultants to identify the geographical area of the majority of their clients and also to break down their work between private sector, public sector and 3rd sector. The average fee rate charged by our respondents was £535 - this is somewhat lower than the figure for 2007 of £662 - something that may be partly explained by an increase in the number of consultants on our database working in the public and 3rd sector. However, the average private sector rate for 2008 was £635 - suggesting that fees in general have come under some pressure over the last year.

Fees by Specialism

Although our skill categories were slightly different this year, there is a slight drop in each area compared to 2007 - but as usual some skills and areas of work are much better paid than others. Our league table of specialties is headed, as usual, by Change Management.

However, Coaching - which seems to have become a well accepted activity in larger organisations - is in 2nd place despite the seemingly limitless supply of people training in coaching and facilitation. Rates for Human Resources, Training and other forms of Management Consultancy also seem to have held up well and these areas account for the highest rates charged, each having at least one respondent bringing in over £1500 per day.

Public or Private?

Looking at differences between sectors, there seems to be only a small difference between public and private sector, but quite a marked lowering of rates in the 3rd (or voluntary) sector. Presumably, this is one of the reasons why both the mainstream political parties are so keen to outsource government responsibilities to not-for-profit organisations! While a good number of consultants concentrate on working in just one sector, the majority, well over 60%, work in at least 2 of the 3 sectors.

This graph shows the difference between the sectors visually.



Regional Variations

Our final area of interest was geographical location - although a substantial proportion ,nearly a third, of our respondents work 'All over the UK' - confirming the willingness of many consultants to travel to where the work is and their ability to work remotely.

In fact, the figures show that these roving consultants do better than those who concentrate their efforts in one area and outperform the national average rate - although this may be because these are people with sought after skills, who command a high rate but have no choice but to travel to find work. Incidentally, the bottom place for Wales should be treated with caution as there were very responses here.

What does this mean for me?

The survey results underline the advantages enjoyed by people with sought after skills and the ability and willingness to travel widely to work. Those in the South-East and London clearly command higher average fee rates - but the variation isn't that large and given the extra time spent travelling by many 'down south' I have suspicion that there would be less difference if an hourly rate, including travel time, was calculated!

So the question, as always, is how do you make sure you're charging the right rate and maximising your income? Our figures are only a guide but should help you to measure your own standard rate against others in a similar position. When discussing rates with clients, the important thing is to concentrate on the value you bring to their business and to remember that you can always negotiate a rate downwards but it's next to impossible to move the rate up once you've quoted a figure! 

About Skillfair

With more and more businesses choosing to use freelancers, consultants or interims rather than employees, today’s managers need a more efficient way of finding and selecting specialist help. Skillfair is the UK’s first comprehensive virtual meeting place that connects clients with specialist independent consultants within the Business, Technology and IT sectors. With Skillfair, clients can specify their requirements and get responses from quality-checked consultants, complete with CVs, within a few hours. Alternatively, clients can browse our Consultant Directory to identify likely candidates and get in touch directly.

Skillfair is funded through membership subscriptions from both client and consultant. Skillfair does not take a commission on projects arranged through its service.

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