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Public vs Private sector daily rates ?


Given the public sector focus on value, do you pitch to a lower daily rate in the public sector than in the private ? If so, by what %age ? (This is on a like for like basis, eg number of days, amount of design etc).

Or is it more complicated than that, depending on whether it is local authority, NHS, education, etc ?
Peter D

5 Responses

  1. is value a changing law?

    my own view is public and private sector is treated on the same criteria, charity is the only area where I discount heavily..”there but for the Grace of God, go I”


  2. Public / Private sector rates
    I’m with Rus on this one.

    What mindset says that professionals should expect a reduced return for their efforts simply because the client is in the public sector? I don’t want to open a can of worms here, but I have found that working in the public domain is often harder for us professionals than working with private organisations. I am often tempted to inflate my rates rather than reduce them!

    If you need to reduce rates then why not equally reduce your efforts, skills and knowledge given to the client! Free lunches are worth exactly that …. nothing.
    Keep the faith.


  3. public sector
    Hi Peter
    Generally I agree with the other comments here.

    Many public sector organisations (IMHE) have bigger, more healthy budgets than the private sector.

    Be proud of your price.

    Again Like Rus I only offer discounts to local charities – national ones have healthy budgets, and charging them full price does not reduce their contribution to their worthy cause, a £1000 budget is stille a £1000 budget – if you only charge £600 they will spend the remaining £400 on something or someone else.

    There are too many trainers trying to compete on price – and as we have seen in the IT training arena day rates are now under £175 per day – this is an unsustainable business model. Anyone charging less then £600 is not charging at a realistic and sustainable rate.

  4. Fee rates
    I am going to disagree with my esteemed colleagues (well only a little bit).
    I think there is a world of difference between a blue chip company and a small engineering company, for example. Similarly there are differences in the public sector. Central government departments often pay more than NHS Trusts or local authorities, for example.
    Now, you can take the line of ‘this is what I charge’ as others have suggested which does have merit as long as you are winning the right work. But if you are tendering, want to penetrate a new market, are prepared to work for less if it is local, or if you think your current rate is losing you opportunities, then that is a different matter. I know many consultants and freelance trainers who work for a range of rates based on a subtle blend of what they think the client might be able to pay and what they think they are worth.
    As to the percentage, I don’t think there is an easy answer to that. Each bit of each sector is different. However, taken as a whole, I am sure that the average day rate paid by mid to large size national public sector organisations is at least 10% less than is typically paid by similar size national private companies. But I cannot give you hard evidence to support that view, just an opinion based on many conversations with buyers and my own experience from being on both sides of the fence.

  5. Pricing
    Just as a little aside,
    I well remember, many years ago, completing what I thought was a pretty effective presentation to the Regional Director of a heavily-subsidised former state monopoly. He seemed rather impressed and then asked the big question. “OK how much is all this going to cost me?” I decided to go for broke, took a deep breath, thought of the biggest number I could ever imagine and blurted it out. He thought for a moment, then replied “Hmmm, then I’m afraid that we can’t do business.” Cursing my greed, I quickly said that I might be able to shave £100 a day off the price. He smiled and said, “No laddy, you’re going in the wrong direction – we would never work with someone as cheap as that”! That day I learned a great deal about differential pricing.


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