How To Determine When It May Make Sense To Take a Lower Rate

I want to share a conversation I had with a consultant, who we will call Bob for the sake of this blog, who asked for my advice on a contract he found on his own.

So, Bob and I were discussing a contract he was offered.  He was accustomed to working for $85 – $90 an hour.  This contract offered him $80 an hour. Now of course there is more to consider when evaluating a contract then just the hourly rate. But for this example, let’s assume that everything about the contract was good enough to accept in a moment’s notice if the rate offered was $90 an hour.

Bob asked my advice on what type of a technique he should use to get the rate higher because he really wanted to work on this project.  He was really struggling because the rate that was offered was going to cause him to turn the contract down. It took me aback for a second because in my opinion, that was the absolute last thing this person should have been thinking.  Sometimes, ego gets in the way of business.  If Bob would have had another position lined up, this would be a different story.  But he didn’t.  He was not new to contracting so I was surprised I was going to have to take him through this exercise.  This post is not about how to negotiate, but rather about making a good business decision.

If Bob felt the contract was a good one, and the only thing getting in the way of accepting it was the rate,  I told him to run the numbers. If he were to accept the contract at $80 an hour he would make $76,800 ($80 x 160 hours for 6 months).  If he were to accept this six month contract right now at $90 an hour, he would make $86,400 ($90 X 160 hours for 6 months).  So the difference between the two rates over a six month period would be $9,600.  If he takes the position at $80 it would take 120 hours or 3 weeks to make up the difference.  So, if he felt he could have found another, equally appealing contract at $90 an hour within the next 3 weeks he should pass.  But, if he were to consider the overall money he would be making over the next six months, as well as the probability of finding something more appealing at a higher rate in such a short time frame, he would be better off taking this contract at $80.

Again, there are many things to consider when evaluating a contract, but when it comes down to the rate of pay, this is how you consider and evaluate the dollars to make the best income decision!

About the author


David Kushan

David Kushan is the President of Healthcare IS and has spent the last 18 years of his career working in the Healthcare Information Technology industry assisting over 120 healthcare organizations nationwide. Visit for Dave’s company blog, articles, podcasts and more.