Contract Negotiations: A Cautionary Tale

Welcome to Building Better Developers, the Developer Nord podcast, where we work on getting better step by step, professionally and personally. Let's get started. Well, hello and welcome back. We are continuing our season where we're looking at mistakes and missteps and all kinds of other little things that led to success. This episode, we're going to look at, we'll call it contract negotiations. Now this was, this one really is, it's a little bit of my mistake, but it's really actually where I probably took the correct road and it was based off of somebody else's mistake. But it's something that I think it's important to point out because of the cost to this other person. Now at this time, I had some people I had, I was into my career and was essentially offered a job at a sizable company, Fortune 100 kind of company. And I was offered a job to come in as a manager. The director that I was going to work for, I know, or knew, still know, I was a friend, we worked together well when we had done so in the past. And through sort of an interview process that was just out of the blue, it was through personal contacts, he essentially offered the job. Now this was not as an employee, this was as a consultant. And I had my own little consulting company, but because of the size of the company that we were going into, they had this preferred vendor list and things like that. I said, oh, this is great, I would love to do it, but I'm not on the preferred vendor list. And talked briefly about it, but it was not going to be worth my time and effort and money to get situated so I could be on their preferred vendor list. And instead, me and the director sort of put our heads together and said, hey, there's these people we know, these companies that are on the preferred list, let's just talk to one of them, I'll go in as a subcontractor. Great. Makes it easy, it's a win-win. And so I did. I talked to basically the first company on the list and said, hey, I've got a job, I've got an offer, all I need really is for someone to sign on the dotted line and take over, you know, basically pass the money or the check from this company to me so I can get paid. Didn't need insurance, I didn't need anything else. It was a straight hourly deal. I knew what the rate was that was possible with this company, with the Fortune 100 company. And so talked to this and they ended up getting directed to a recruiter that was I think sort of new. And I said, this is what's going on. And they said, okay, yeah, I think we can make it work. And started moving things forward. And it was also something I said, hey, this is a manager position, so if there are other positions that open, I will in some cases be effectively a hiring manager. So I think it's a good opportunity for you, you know, this consulting company, to get a foot in the door, even though they had a few people there, but have somebody on their side in management. And it didn't cost them. There was zero sales involved. They didn't have to put any investment in getting to this point. It was already a done deal. And so everything was looking good. And we got to I want to say like a week out of starting, maybe two weeks, something like that. And the recruiter calls me up and said, hey, got a couple changes. We need to, you know, we can't we can't make the weight rate work. We're going to need you to cut. It wasn't a lot. It's like a couple bucks an hour off of your rate of what we pay you. Because we need a bigger margin. And I said, look, I said, no, I don't think you do because look, this is there's no investment that you guys put into it. We already agreed on this. I already have allowed you to push me down on my rate. And no, you can't come to me at the last second and do this. Now, you know, a little bit of a side note as I find out over the years working with this company, this is something they do a lot where they they will push both ends. They try to raise the rate that they're getting. They try to lower the rate they're paying. And they will do these like last minute tactics and things like that. And it is what it is. That's how they approach stuff. Well, so this person did that and then started lecturing me on how I didn't understand what the what consulting was like and what it really what really went into rates and what were available and what weren't. And I had been a consultant for probably 10 years at this point. So I knew actually, to be honest, better than she did because she'd only been doing this for, I don't know, six months or a year. And I think most of what she got was coming from, you know, a manager, account rep, something like that. And this was a mistake that they made was they had something that landed in their lap. And instead of accepting it and moving forward with it, they wanted to work it. They wanted to squeeze it for even a little bit more. It's literally it's almost literally the idea, the concept of looking a gift horse in the mouth. It's one of those things where it's like, hey, here it is. It's all wrapped up. This is all you need to do. It's very cut and dry. And you don't have to waste time on negotiating or sales or anything. You just you get your you know, you get your overhead off of it and you're you're off and running. And it was it was what was sort of a typical overhead of I can't remember was like 25, 35 percent, something like that. That was at that time was was very doable for this kind of situation. And they had agreed to it. Well, you know, they started balking at it and decided, ah, that's not quite good enough. I want to get a little bit more. And it very quickly turned into me saying, all right, I'm done. I'm not going to work with you guys. I went to another company. That was another preferred vendor that was somebody else that I knew. And we had that thing signed and ready to go, I think, within 24 hours. So I had learned, which was one of these things that I had learned in some some prior situations because I was now a couple of jobs in. I had learned that there is is worth it to negotiate your your salary and your rates and things like that. And I'd also learned that sometimes it is better to walk away than it is to fight for, you know, somebody where you know they're just going to keep dragging you down. And you can see a lot of negotiation strategies that are like that. But if you once you set a limit. And we've talked about this before. You know, there's some some mistakes and errors that I've had in the past at that point, for example, which we go back to when I bought the one car. And it was having this idea of what your limit is or what your you know, whether it's a bottom or a top end or what is it that you say that this I'm going to draw this line in the sand. But it's a pretty strong one before I even go into a negotiation type of situation to know what I want, what I need, what I'm worth, what my desire is, whatever it is that the factors are involved in that. So that when you get into it, it's not you don't allow the emotions to deal with it as much as you just say, OK, I can look on paper that this is what my my target or my agreement was. And where I knew where I was, you know, it was my bailout point where it's like, no, I can't I'm not going to move off of this. And this was one that I didn't necessarily do that beforehand. I didn't realize that it was going to be a negotiation kind of thing. But I had already said everything to that. I'd already had all of these agreements around the initial rate. And when they came back and change it, I was like, no, I've I'm not going to redo everything. And they and it was it was it was one of those that could have easily been. Me saying, OK, fine, I'll take it for a lower rate. Because I could have looked at it and said, this could be a lot of headache. It wasn't a lot. It was one of those. It was some small percentage by the time you're done. It may have been pennies. I don't remember what it was, but it was one of those where. I stood my ground. In the long run, it was the better way to go because they were just not a company I needed to deal with this this consulting company. And the company that I did work with turned out to be a much better fit for me to be as a subcontractor, but also for all of the things that went on with that Fortune 100 company. So it was definitely something that worked out for the best based on. What I had learned from some prior mistakes. But the opportunity became it opened up. With this, you know, with this mistake that this recruiter made. Now, one mistake I did make is I didn't shop it around and I probably should have beforehand instead of just going to a company and said, hey, I'm just giving you business. I'm going to here you go. Here's a contractor ready to go. I should have said, hey, I've got and should have done so. You know, I've got two or three different places that I can go to. This is what I'm looking at and allow them to bid for the work basically. And I've had I done so, I probably would have ended up with even a better rate than I had. But I was OK with that. And that's one of those things that it was. It was a mistake in a way, but it was one that was I was able to overlook or forego because it really didn't in my mind cost me as much. Maybe it did. You never know. But it's one of those situations where if you don't. If you touch the oven and it's not hot enough to burn you, then maybe you maybe it opens you up later for making a bigger mistake. In this situation, though, it really does go back to and this is I think this is a big challenge when we get into negotiations and things of that nature and particularly in the technical world and the IT world. But I think with a lot of industries where there are not hard to get to, I think it's a big challenge. It's that you have to have a confidence or an understanding, a knowledge of what your skill set is. What do you bring to the table and what is that worth? And then you have to factor in things like, am I really good at some of this? But I think there's a lot of things that you have to be confident in. And then you have to factor in things like, am I really good at some of this? But there's a couple other things that will I will be able to advance or grow so that there's non-monetary rewards. And that includes things like, you know, are there other benefits? Is this closer to my home? Is this a remote work job? Is this something that's like a company that I really wanted to work for or an industry I really want to work for? Or people that I really want to work with? There's a lot that goes into these kinds of negotiations. And when something falls into your lap or just falls into place, there are two different ways we can look at it. Some people are just like, great, it falls in place. I'm done. I'm out. I'm going to take it and I'm going and I'm going to run with it. More often than not, particularly when we have a little bit of time to think about it, we may we may get into this idea of massaging it a little bit. And I think that's to make it work better for us. And that is OK to some extent. But one, once you agree, if you then go back, it is very risky because they may just walk away. But it's also something that doesn't give the right feel to a lot of people. And I know that it depends on your you're raising your culture, your environment. Some places that's that's a natural thing is that you sort of draw a line in the sand, but then continue negotiating. I think for most and this is probably more of a Western philosophy. I think if you go to East, I think, you know, if you're in China or Japan, the negotiation and the way those things are viewed are very different. So this is this is more this is definitely a little bit of a personal thing and definitely a Western based business kind of thing. But when you are negotiating and when you agree, you need to you're going to be best off when you agree to be in a situation where you know that you will agree and you're not looking to change. That doesn't mean that you can't ever. But there is something I feel lost if you change it. And it may be that you it's OK because you never deal with those people again. But also is something where it can come back to bite you. And this this is something to consider, particularly because I've had a lot of conversations recently about such things is when you are looking for a job. And you get an offer, but you have multiple offers out there or probably the hardest part is when you have a couple of offers out there, you have a couple other offers that you are waiting on. You're pretty sure they're going to come, but you don't know exactly what they are. And what you want to do is be able to evaluate all of them and make the decision that's best for you, which makes complete sense. But I think in the midst of it, sometimes we decided, oh, it's that's a little risky because what happens if I wait and this offer gets withdrawn and this other offer that I think I want doesn't actually come through. So there is some and that is all possible. I think the way that I have worked professionally is to, I guess, take the high road. So if I've got multiple offers, I'm waiting on a couple. I will let people know. And I have had situations where that has caused offers to be rescinded. And I would argue that every single time that happened, the place that rescinded the offer turned out to be a place that I really didn't want to work at. I didn't want to work at anyways. It would have not worked out well, either because the company folded later or it turned out that the job wasn't what it's supposed to be or lots of other things have happened. So I think you're going to be better off being open about those things. I think you have to lay everything out there because there are negotiations and that. So it's not like quite like showing your you don't have to show your entire hand like using a poker analogy, but it's OK if they know how many cards you have in your hand. It's not like that. It's not a perfect analogy. But I think when we get in these situations. You you need to be pretty clear and upfront. And for example, if this recruiter had said, you know, hey, I think this is going to work, but we have a B and C things that we need to hit for this to be a valid or an accepted contract and had been open with what those things were. Beforehand, I probably would have been more open to it. If if their approach was we're going to make a we'll make an agreement, but we're going to come back and push on it still afterwards and try to get you at the last minute. Obviously, you're not getting sort of removes the use of that approach when you tell somebody that beforehand. But also, it's one of those that I think. I think gotchas like that surprises like that are always going to be risky. And so the more you can do to read, reduce those, the better. And even if it is something where you think that you can walk away. So, for example, if you like, take a job offer and then you get a better job offer two days later and you say, OK, sorry, I got a better offer. I'm going to take it. While it is understandable that in a lot of cases will leave a bad taste in somebody's mouth with with you. And I have I've had situations where doors were closed to me because I did something like that, because the way I left the situation was not what they wanted. Played it too close to the vest, you can say, and they weren't happy about it. And later on, it was it made it so that company was not somewhere that I was going to go because they're like, well, you know, you did this before. This is how it worked. And we didn't like that. And whether it's just them taking it personally or whether it's something that's more of a business decision, because there is a cost to selecting a person and making an offer and all that kind of stuff. Where if you accept it and they start moving forward and then you back out of it, then there are costs associated that that company may not want to pay. So it's there's a lot of stuff to consider when you get into these situations. So what you know, the moral of this story is going to get a negotiation, knowing what your points are, what you need, what your needs are and what your wants are. And when you get to the end of it, stick to it. Don't try to go back and question it and second guess yourself and saying, I could have gotten a little bit more. Maybe I can get a little bit more squeeze a touch more out of that because you may end up losing it all. That being said, it's time to wrap this one up. So go out there and have yourself a great day, a great week, and we will talk to you. Thank you for listening to Building Better Developers, the Develop-a-Nor podcast. You can subscribe on Apple Podcasts, Stitcher, Amazon, anywhere that you can find podcasts. We are there. And remember, just a little bit of effort every day ends up adding into great momentum and great success. There are two things I want to mention to help you get a little further along in your embracing of the content of Develop-a-Nor. One is the book, The Source Code of Happiness. You can find links to it on our page out on the Develop-a-Nor site. You can also find it on Amazon, search for Rob Brodhead or Source Code of Happiness. You can get it on Kindle. If you're an Amazon Prime member, you can read it free. A lot of good information there. It'll be a lot easier than trying to dig through all of our past blog posts. The other thing is our mastermind slash mentor group. We meet roughly every other week, and this is an opportunity to meet with some other people from a lot of different areas of IT. We have a presentation every time. We talk about some cool tools and features and things that we've come across, things that we've learned, things that you can use to advance your career today. Just shoot us an email at info at Develop-a-Nor dot com if you would like more information. Now go out there and have yourself a great one.