Should clients insist upon being privy to the myriad components of a bill rate? Till recently, the industry dynamics have been such that many clients would pose this question themselves while suppliers were not willing to have their markup open to scrutiny. While the quality of contractors sourced may be the primary concern of every client, concerns about cost are generally never far behind. Thus every client has a need to negotiate rates down to the extent possible. This may be why suppliers these days are differentiating themselves on this front and offering transparent bill rates. But how exactly would clients benefit from knowing the actual amount their contractors are taking home as pay?
When a supplier is not transparent about the pay rates and pays variable rates to different contractors to boot own margins, there is a possibility that two contractors, with similar skills, engaged in similar tasks with the same client happen to compare notes and realize that one of them has been shortchanged.
Effects of Transparency:
Clients today may demand to know the pay rate or may specify a rate with the requisition – and only negotiate the markup with the supplier.
When a client gets a contractor who appreciates the fairness of the pay rate received, there may be some indirect benefits as detailed below:
It is ultimately a decision which would be dictated by the ground realities of one’s industry taken in conjunction with the market trends.
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