Most locum tenens physicians accept the first rate they're offered. That's a mistake that costs them thousands of dollars per assignment — and tens of thousands over the course of a year.
Negotiating a locum tenens contract isn't adversarial. It's expected. Agencies build room into their offers precisely because they know some physicians will negotiate. The ones who don't leave that money on the table.
Here's a complete playbook for negotiating your locum tenens contract — from the initial offer to the final terms.
QUICK SUMMARY — 7 THINGS EVERY LOCUM PHYSICIAN NEEDS TO KNOW
Always negotiate — the first offer is rarely the best offer
Agencies build in 25–45% margin — there's room to move on rate
Get multiple offers — competing offers are your strongest leverage
Negotiate the full package — rate, guaranteed hours, travel, housing, cancellation terms
Make the first move on rate — anchor the conversation at your target
Use silence — after you counter, stop talking and let them respond
Get everything in writing — verbal promises don't exist
Understand the Structure Before You Negotiate
Before you can negotiate effectively, you need to understand how locum tenens compensation is structured.
The Bill Rate vs. Your Pay Rate
The agency charges the facility a "bill rate" — the total hourly cost of your services. Your pay rate is what you actually receive. The difference is the agency's margin, which typically runs 25% to 45% of the bill rate.
Example: If the facility pays $350/hour and the agency takes a 30% margin, your pay rate is $245/hour. If you negotiate the agency down to a 25% margin, your rate goes to $262/hour — a $17/hour increase that adds up to $680 per 40-hour week.
You usually won't know the bill rate, but understanding that the margin exists gives you leverage. The agency has room to move.
What's Negotiable
Almost everything is negotiable in a locum tenens contract:
- Hourly rate — the most obvious, but not the only lever
- Guaranteed hours — a minimum number of hours per week regardless of patient volume
- Shift differentials — premium pay for nights, weekends, holidays
- Travel arrangements — direct booking vs. stipend, business class for long flights
- Housing quality — furnished apartment vs. hotel, proximity to facility
- Malpractice coverage — limits, occurrence vs. claims-made, tail coverage
- Cancellation terms — notice required, kill fee if the facility cancels
- Extension options — right of first refusal if the assignment extends
- Non-compete clauses — restrictions on working directly with the facility
These terms have real dollar value. Don't ignore them in favor of focusing only on the hourly rate.
Specialty-Specific Negotiating Leverage
Your leverage varies significantly by specialty:
High Leverage (Significant Shortage)
- Anesthesiology
- Interventional Radiology
- Diagnostic Radiology
- Gastroenterology
- Psychiatry
In these specialties, facilities are often desperate. You can negotiate aggressively on rate, guaranteed hours, and travel arrangements.
Moderate Leverage
- Emergency Medicine
- Hospitalist Medicine
- Neurology
- Urology
Strong demand, but more supply than the top-shortage specialties. Negotiate on rate and terms, but be realistic.
Lower Leverage (More Competition)
- Family Medicine
- Internal Medicine
- Pediatrics
More physicians available, more competition for assignments. Focus on guaranteed hours and travel terms rather than pushing hard on rate.
Common Negotiating Mistakes
Accepting the First Offer
The first offer is almost never the best offer. Always counter, even if the initial offer seems reasonable. You have nothing to lose.
Negotiating Only on Rate
Rate is one lever. Guaranteed hours, travel, housing, and cancellation terms all have real dollar value. Negotiate the full package.
Not Reading the Contract
Verbal agreements don't matter. Read every word of the contract before you sign. If something isn't in writing, it doesn't exist.
Ignoring Non-Compete Clauses
A non-compete that prevents you from working directly with a facility for two years can cost you significant income if you want to convert to a permanent position or return as a locum through a different agency. Negotiate these clauses or get them removed entirely.
The Bottom Line
Negotiating your locum tenens contract is expected, normal, and financially significant. The physicians who negotiate consistently earn 10% to 20% more than those who accept the first offer — on the same assignments, doing the same work.
Know your market value. Get multiple offers. Negotiate the full package, not just the rate. Get everything in writing.
At <a href="/why-locumsone">Locums One</a>, we operate on a transparent model with lower margins than traditional agencies — which means more of the bill rate goes to you from the start. <a href="/contact">Talk to our team</a> about current assignments and what you can expect.
