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hourly rates- annual increases?


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3 posts
Ryan Keiffer
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We raised our hourly rates in January 2017 for the first time in several years, and it ended up being a pretty significant increase.  While we managed it well and felt little to no negative impact, we felt at the time that it might be easier to do a smaller annual "cost of living" increase instead, and targeted January 2019 to potentially implement it.

Has anyone made this shift and had clients react negatively? Any suggestions based on experience on the best way to roll this out, or pitfalls to avoid?


Ryan Keiffer

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Hi Ryan:

I have spoken with numerous agencies that write a small annual rate increase into their contracts with clients.  In some cases, the contract states that the agency has the “right” to increase rates versus just having a standard increase each year. This shows the client that you are not simply increasing rates for the sake of increasing but only doing it if necessary.

If you review this clause with the client at the time they sign the contract, they are aware that a rate increase may come at some point. This is typically easier than broaching the subject without any warning.

If you don’t have all clients sign contracts, you could also work some wording into your estimates that the rates reflected are valid up through December 2018, giving you the opportunity to change them in 2019.

Rate increases are never an easy conversation to have with clients but if you can give them some type of forewarning, they typically respond better when the conversation is initiated.

Let me know if you want to chat.


Mary Fisher
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We bill at $135 an hour. We have been that rate for a long time. I do not see that we are able to raise our rates at this time.

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