13 December 2012 ~ 0 Comments

Avoid the “All Inclusive” rate trap

There are thousands of excellent contract opportunities for SAP consultants all over the world. Rates are high, and as always,  it’s a great time to be in SAP.  There are rates in the $100/hr + range (up to $150/hr and beyond for senior functional and architect roles) but one trend you must be aware of is the dreaded “all inclusive rate” trap. Please don’t be fooled or pressured into selling yourself short by accepting less than what you will reasonably need to commute to your SAP job. If they offer you a low rate “all inclusive” you must refuse and tell them you only accept expenses paid work.

Baseline Travel Expense Budget

$600 Round Trip Air
$500 Hotel
$200 Car
$200 Food
$1,500 total
$37.50 per hour   >> hourly premium for travel expenses

Of course I should clearly state the issue: if your expertise is needed, and if you don’t happen to live near your client, your client is going to need to pay all necessary expenses so that you can travel to their location.  This is the industry standard. We cannot allow our trade to be turned into a rabble of itinerant/migrant workers who pick up and move for each 3 month contract. No, we must have our expenses paid! And it’s up to you to insist upon this. I can’t do it for you!

Your client must pay round trip air travel each week. Hotel. Car. Your client must reimburse meal expenses. In short, each and every expense that you incur while traveling on business that you wouldn’t normally incur back home — they must pay.

We’re not being unreasonable here. We cannot simply RELOCATE each and every time we change clients. And we cannot accept an all inclusive rate that pays us less than our expenses and the financial risk of carrying the expenses on behalf of our clients.

Indulge me, dear reader, and understand that this is yet another example of our clients, the MNC, pushing risk and expense to the people that make their businesses run.  They don’t want to take care of our travel expenses, so they pay us to take care of them. They understand that this simply shifts the burden and risk to us — otherwise, they’d take care of us.

So it falls upon us again (as it has with healthcare, taxes, and even our hourly rates) to make our own rules,to set our own standards, and to see that our clients pay for our travel expenses. Personally, if a client asks me to take an “all inclusive rate” I insist on $40/hr extra (in addition to my normal rate), and these expenses ($40 * hours worked) must be paid each week on Friday.

I suggest you accept no less.

And I trust that you understand that your solidarity on this issue is expected. For if some of us loosen our standards and accept “all inclusive” rates for less than $40/hr to cover all related travel expenses, this will become the standard and the rest of us will suffer, or we will have to fight harder to maintain the standards of work in SAP.

Have some confidence. Don’t accept less than you deserve. That’s all it takes to get your rate and expenses. Practice saying “NO!”

Truly, Jim

P.S. what are you  seeing?

please share your experiences below… what do you think?

 

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