Work on Retainer

Stumping for the next job can be challenging. Working on retainer can keep the jobs—and money—coming in while you look for the next big contract.

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While retainer work isn’t for everybody, the flexibility and hours can be worth the hassle for some people, says Kate Zabriskie, Maryland-based career coach and business consultant.

Determine Details
Before embarking on retainer work, make sure you iron out the details. “The contractor and client should discuss how the retainer arrangement will work,” Zabriskie says. “If the hours are not all used during a given period, do they roll over, or is time not used lost? I would recommend not allowing the hours to build up. They also need to discuss what to do once the number of hours for the month are used up. For example, if you have already remodeled an office kitchen this month—using up all available hours—does the rate change for additional work in the month? Does the work stop until the next month?”

Additional areas to consider include clauses to cancel the agreement within a pre-determined number of days, and specifications on who is authorized to perform work. For instance, the contractor may want to subcontract or delegate jobs if more-specialized and profitable work comes in, while still meeting retainer obligations, Zabriskie explains.

Retainer Advantages
From the contractor’s perspective, retainer work provides guaranteed income, says Jennifer Loftus, founder of Astron Solutions, a human resources consulting firm. “Retainers allow you the flexibility to develop other projects without worrying about how the bills will be paid. This work can also serve as a confidence booster. For instance, if an organization is willing to have you work with them for an extended period of time, that demonstrates that you do excellent work.”

Retainer Drawbacks
On the downside, clients can sometimes think that if you are on retainer, you’re at their beck and call and may take advantage of that relationship, Loftus says. “It takes strong client-management skills to ensure that both participants in the retainer relationship are treated equitably,” she says.

Structure the Specifics
Spell out beginning and end dates, fees and the specific services that fall within the scope of the retainer, advises Liz Bywater, president of Bywater Consulting Group. “This protects both parties against potential conflict about expectations and whether they are being met,” she says.

Mutual Benefits
If structured correctly, retainer work can be a great arrangement for both the service provider and the client, Bywater says.

From the service provider’s perspective, retainers can improve cash flow, since payment is made at the beginning of the retainer period. From the client’s viewpoint, retainers provide peace of mind. “The client knows that the service provider will be available for specific services over a specified period of time,” Bywater adds. “Furthermore, the client isn’t required to make a new investment decision every time he or she needs the help of the service provider.”