El Segundo, California – (The Hosting News) – March 29, 2006 – According to IT consulting firm, Surrex Solutions, utilizing its evaluation tools enables hiring managers to evaluate available IT consulting resources and respond to pay rate and bill rate dynamics.
Surrex’s FIT Analysis, a proprietary project management testing and evaluation tool, allows IT consulting professionals and staffing managers to determine project staffing needs for IT staffing firms.
According to the company, the major factor that determines whether rates are rising or falling are IT consulting market conditions. Supply and demand is the driving force IT Staffing firms use to determine IT consulting rates. No matter how skilled a COBOL IT Consultant might be, in today’s market space, the demand for his or her skill set is just not there. On the other hand, should a hiring manager need an IT Consultant skilled as an asp.net Architect, yet their budget is $30/hr, they will either be waiting a long time, or will have to compromise the level of experience needed. This could jeopardize the project outcome.
According to Executive Vice President at Surrex Solutions Corporation, Michael D. Ellis, the reality is that each individual marketplace has a finite number of qualified IT consultants possessing a defined skill set. If that number is low, rates will be higher, and vice versa. It would be a mistake for either the IT consulting professional or the hiring manager to be firm on their rates without understanding the market conditions. There is nothing wrong with initially attempting to achieve a target rate to determine what level of talent is available for a given budget. Perhaps there are aspects of an assignment where you can compromise experience for rate. IT staffing professionals will tell you, in the end, you get what you pay for.
IT consulting professionals are concerned that lowering their rate may lock them in to the lower rate for good and move backward. Mr. Ellis believes that this is a misconception, as IT consulting rates vary with experience and market conditions, and can fluctuate both ways, sometimes in a short period of time.
Those IT consulting professionals, who are firm on their rates, may actually end up making less money over time. A $60/hr IT consultant who wants to hold out for $65/hr, and waits one week before getting the higher paying assignment, will miss out on a $2400 paycheck (40 hours at $60/hr). It will take them 480 hours (or 12 weeks) until they break even ($5/hr x 480 hours = $2400). And that is assuming they get the position in one week, if it takes longer. Therefore, holding out for a higher rate does not always mean making more money in the long run.
While an IT consultants’ goal is to maximize earnings potential, in contrast, the hiring manager, who has a limited budget, is told the project needs to be completed with limited funds allocated for an IT consulting resource. The IT staffing firm looks to balance the desires of both the consultant and the hiring manager while maintaining a reasonable gross profit margin.
What determines which direction IT consulting rates are moving is neither the needs nor desires of the hiring manager or the IT consulting professional, though they do have influence.
The IT staffing firm is in the precarious position of trying to fulfill the needs and desires of both the hiring manager and the IT consulting professional while providing value to both and making a reasonable profit. It is very rare, based on today’s market conditions, that the difference between the pay rate of an IT consulting professional and the bill rate to the client is such that the IT staffing firm will make an unreasonable profit. The truth is that market conditions do not allow this to happen. A successful IT staffing firm recognizes the long-term relationship is much more important than short-term gain.
To learn more about Surrex Solutions Corporation, please visit: www.surrex.com.