Increasing bill rates while keeping clients happy is a challenge. You don’t want to turn off current or future customers, but raising rates to keep up with inflation or expenses is essential to keeping your business profitable and growing. Taking the right approach: one that balances the needs of your firm and your clients’ can smooth the process.
Consider the following practices to make the change painless.
One reason that many staffing firms are raising bill rates are the increased costs they are incurring because of the Affordable Care Act. Avoid treating the ACA as an unavoidable evil to commiserate over. Instead, discuss the fact that you are able to attract good people and keep them longer because of the benefits you offer. It’s only reasonable that highly qualified, experienced employees would come at a premium.
Grandfather existing clients.
If you need to increase rates to cover expenses, that doesn’t mean you have to increase all your rates. Loyal clients are expensive to replace. If you have existing clients who give you substantial business and are easy to work with, it might be wise to leave them at their existing rates. Charge the new higher rates just for new clients, who will not feel the pinch of increased rates.
Incent people to pull the trigger.
Tell customers well in advance there will be an increase in rates and when they will take effect. This will encourage them to get orders in before the higher rates take effect. This could build up a nice book of business for you. You can increase rates for these customers at a later time.
Raise rates incrementally.
There’s no rule as to how much your rates must increase. If you need to raise them, say a few dollars an hour, raise them twenty-five to fifty cents (or something similar) at a time so it’s not so difficult for clients to absorb into their expenses.
Be transparent about your fixed and variable costs; clients may not realize the hourly rate the candidate market can bear, nor do they understand the regulatory costs that make up the total bill rates.
At Avionté, we provide solutions for staffing firms that help you to operate more effectively and keep your operational costs down. Our comprehensive staffing software delivers integrated software systems that make it easier to drive growth, maximize profitability and streamline your administrative tasks, so that you can focus on your serving your customers. To learn more about the many benefits of Avionté staffing software, contact us today.