Right to hire
Hi,
I would like some tips on what to ask for in salary. I am currently working as a contractor at a company. Now, the client has said they would like to offer me permanent employment with them. This company is not a very good paymaster. However, another co-worker from my consulting company became an employee and he said the pay was comparable and good.
My question is - what do I ask for a salary with this client company. My manager and his higher-ups are very pleased with my work. The consulting company is not paying me the market rate currently. I joined 3 years ago when the job market was tight and they haven't given any increase. When I ask for a raise, I get the usual talk about how the client is cutting rates, etc. I am currently getting $45 per hour with no other benefits. In my previous company I was making $96K as a full time employee with benefits, vacation time etc. But they laid me off for budget reasons and I joined the current company in 2004. I have over 8 years of experience in the programming field and am PMP certified.
What should I say when I'm asked for the salary expectations? I'd like to say $100-115K range. Is that too ambitious?
Thanks,
VB
It is ambitious indeed, but if you come with a strong motivation for your request, there should be no problems. I'm surprised to find out you ahven't been give a raise in 3 years. That's not good. I suggest you have a salary talk/negotiation and display you're important for the company because of this and that, and you believe you deserve this salary because you have been correct, hardworking, efficient and so on and so
Section of post does not conform with Monster TOU
If you have been at this contract job for 3 years, and have not had a direct salary with benefits for that long, I'm hard pressed to say you could get a whole lot more than you were earning 3 years ago. While it seems you are most definitely underpaid now at $45/hr and no benefits (seems to me you should be making around $55 to $60/hr), it you've been making that much with this same client, and they know how much you're getting from the contract agency, it seems it will be very hard to pry $100k or more from them.
My husband has a long history with contract agencies, and generally, when a person goes direct with the same client company, they are paid either less than their hourly rate, simply because of the benefit package, or about the same. If you're making around $93k now/yr with no benefits, and the job you will be doing once hired on direct is the exact same job, with the exact same responsibilities, how are you going to justify that much of a higher base salary plus a benefit package worth 30 to 35% of your base pay? I'm not saying you don't deserve more, but it's a mystery how you can justify it, unless the job will be a promotion.
Honestly, if I were you and got a salary equivalent to your current $45/hr rate, and a benefit package on top of that, I'd be happy. Effectively it's still a raise! Many companies are not offering people more than what they were making at their previous jobs, especially if that last job was 3 years ago. If you were currently working for $96k/yr direct somewhere and this company was hiring you away from that one, you would have some bargaining power as well as a fall-back position. In this situation, you don't have much of either, it appears.
"I am currently getting $45 per hour with no other benefits. In my previous company I was making $96K as a full time employee with benefits, vacation time etc."
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What your previous employer paid is irrelevant.
You're making $45/hr, no benefits. That's $45*2080 (assuming you get federal holidays and 2 weeks vacation) or $93,600 before taxes.
A recent study showed that benefits run 35-40% of salary. Therefore, for the company to offer you 95K plus benefits costs them upwards of $128K.
I would counsel that what you should ask for is what that company is paying others with 8 years programming experience and a PMP certification, assuming you're using both in your current position. The 8 years and the certification are irrelevant unless they're required or beneficial in the position you now occupy.
Hi,
Yes, you bring out valid points. It would be the same job, so how do I justify asking for the higher pay.
I don't think the client company knows how much the contracting company pays its employees. Other colleagues at this client from other contracting companies are paid more from their companies (similar or lesser job responsibilites than mine). The client has a rate they pay and it's up to the contracting company to fix their cut of the rate and negotiate the rate for their employees.
However, the benefits (other than vacation time, which I don't have now) do not mean much to me since I get them via my husband right now. The current consulting company matches 50% upto 6% of 401K too.
In my favor, (not being boastful) I have made a good name with the client - the improvements I have done have gone up to the director's level ; the customers have consistently been happy with my performance, my manager is very happy with my work and would like to keep me and I have a good relationship with my colleagues.
I was initially hired to be a programmer/analyst for a project. Now I'm working in the role of team lead for that project and concurrently work on another project too. So, I'm doing more than what I was initially hired for.
My 8 years of experience is apparent in the way I think and the way I can anticipate problems and try to avoid them before they happen. I am flexible and am working on JAVA/Oracle in one project and ASP/SQL Server in another. I do the work from estimating time and cost to doing production support for the deployed solution.
While these don't translate to $$s, it does show them that I would be a very valuable employee for them who can fit in to whatever role they would like me to take on and produce good work.
I don't know how to put it to the client that my current company hasn't given me a raise in 3 years, my job responsibilities have increased during that time, hence, I deserve more than what I am being paid right now.
I would like to stay at this job because of their incredible flexibility - telecommuting most days, flex hours, etc. If I go anywhere else, I would need a year or so to establish myself to this level of flexibility and trust.
I guess I'm not totally ready to walk away from whatever they offer because I would love to continue here for the flexibility it offers to balance my work and family obligations. So, unless the offer is very low, I will be taking it. But I'd like to get what I deserve, rather than based on what I currently make.
Thanks for all your replies. I appreciate it. Julius, I will look at those links you sent too.
VB
"I would like to stay at this job because of their incredible flexibility - telecommuting most days, flex hours, etc. If I go anywhere else, I would need a year or so to establish myself to this level of flexibility and trust."
Then, that in and of itself, is worth a lot. While you may not be able to put a $$ value on that, it is worth money. It's almost impossible to find employers who are truly & honestly flexible--despite the lip service many of them pay to being "family friendly, flexible," etc.
You may go elsewhere and make $10k more a year, but if you will never have the flexibility you have now--and you may not get it, even after you establish yourself--I wouldn't think it would be worth it. Just my opinion, of course, but, to me, quality of life/work balance is more important than getting some figure that I think I'm worth. I'd rather have the flexibility in my life than more money.
Anne_Marie,
I agree with you 100%. To me the flexibility is worth a lot. This group is incredibly flexible, not just giving lip service. So, it helps a lot with my kids school and activities. I do put in time in the night/weekends to make sure the work is done, but I do it willingly because of their trust and flexibility.
If only more managers would understand that if they are flexible, the employees would willingly do more than the required work Just having a body in the office chair does not translate to having productive workers. Of course there are people who abuse it (I have people in my own group who try to do that), but by putting checks and balances, flexibility can be made to work.
Thanks for your reply.
VB
I suspect, with no disrespect intended, that they're not going to ask you how much you expect to be paid nearly as much as they're going to tell you what their salary offer is. In addition, I'd expect it to be less than $45 per hour. Generally, when people move from contractor status to employee status the salary goes down because of the value of the benefits you'll be receiving. As a general rule of thumb, benefits can be anywhere from 25% to 35% of salary, so if you anticipate a salary and compensation package worth around $90K, I'd expect a salary offer in the $60K range, not counting benefits, which I'm assuming would be worth roughly 30% of the total. What you were earning before being laid off shouldn't be the standard you use to estimate your value today to this particular employer. Assuming you're paying for your own benefits now, you should at least try to maintain a total compensation package worth approximately what you're being paid as a contract employee without benefits. Make sense?
Paul W. Barada
The Negotiation Expert
Paul,
You might be right. No disrespect taken The only reason I think they will ask is because of the precedence of my co-worker's case - he was asked what he wanted and he got what he quoted.
The reason I gave the salary I made in my previous job was to point out that my work was deemed worthy of that money at one time. I know that it does not come into play in current negotiations. However, that was the last "annual salary" I have to compare with since the current one is hourly.
My "bad" is in not negotiating a raise with my current company. I have not been forceful because of my comfort in the flexibility and disinclination to give it up. The contracting company has expended no efforts in retaining employees, we are just money making machines. I had once approached them to enquire about converting to 1099 so I can atleast write off some stuff. Their reply - the client will not accept sub contracting. So, if you want to do that, goodbye. There was no talk of whether or not another opportunity might be found or anything. That's why I didn't negotiate harder for a raise. I could only get somewhere if I was ready to walk and I am not ready for that yet.
Thanks for your reply.
VB
Hello!
I went through this same situation when I went through a conversion from contractor to employee for an IT firm that I work for.
When I worked for the contracting agency, I made XX$/hr. When I converted to an employee of the company I was contracted to, I made substantially more, and with an amazing benefits package. At that point, I started doing some research and learned something that applies to most contracting agencies and their clients. Let's say, for example, that Client A pays Contracting Agency B 70$/hr for your services. To Client A, this is worth the cost because they do not have to supply the benefits for the employee, and they have a trust in the contracting agency that they have provided a capable employee. What Client A gets is a trial period for the employee, while not having to ever officially hire the employee, worry about severance, and they have no obligation to the employee. The contract can be terminated at any moment for any reason.
When you "go permanent" after a contract, consider that they are already paying at least 20% over your salary to Contracting Agency B. The agency takes their cut and then pays you, the employee, 40 - 45$/hr. The great thing about getting hired after a contract is that you are already an established employee, under usual circumstances. They WANT you as an employee, and they know what they are getting. It is not the same crap shoot as interviewing someone a couple of times and hoping they fit into the position and company. It makes it easier to negotiate salary.
I went into the hiring meeting with my salary "requirements" drawn out, and they went above what I asked for without even seeing it. I put my paper down upside down and said "that sounds fair!". I walked away with about 20K more in benefits and salary than I had asked for.
Just remember: Whatever you are getting paid, a contracting company has taken a huge cut out already. If you can find out what that cut is, you have a starting figure.
Hope this helps!
- The IT Lady