I currently work as a contractor to a fortune 500 company through two middle men. The company I work for (I'm a full time employee with them) is contracted by another firm, who is then contracted by the Fortune 500 company.

The fortune 500 company has put in the request with the contractors that I be converted to a full time employee with the fortune 500 company.

So I know that my company charges a certain high rate to the top tier contractor and then that contractor charges a rate to the fortune 500 company so the cost to the fortune 500 is probably significantly higher than what I make now.

I think this gives me a little wiggle room in how much I ask for. I just don't know how much wiggle room I have.

For instance, let's say I make $150k a year, would asking for $165k a year be to much?

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Posted by VABuckeye

Naples, FL

Member since Dec 2007

35720 posts

Posted on 9/22/14 at 8:59 am to lsufanintexas

Just my opinion but I think you're looking at it backwards. Their associated costs will go up when you become an employee. Right now as a contractor you bear the full cost of everything. They will be sharing some of those costs when you become an employee.

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Posted by ScottieP

Baton Rouge, LA

Member since Feb 2004

1933 posts

Posted on 9/22/14 at 11:08 am to lsufanintexas

We recently had 2 contractors who come form similiar situations as you describe. We paid a set hourly rate and the contacting company empoyee the person and provides that person with benefits they determined to offer. We had no say in thier pay rate or what benefits they were offered.

Well recently we decided to eliminate the contracting agency. We offered both contractors full time positions, with full benefits and retirement. Their hourly pay rate..went down!!

So your thinking may be a little off as a previous poster stated.

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Posted by Hawkeye95

Member since Dec 2013

20293 posts

Posted on 9/22/14 at 2:31 pm to lsufanintexas

we are in process of hiring a contractor, and the markup the firm charges is close to 45%. Just an FYI.

Companies will often pay more for a contractor so they can cut at will, decrease hours, not worry about benefits, etc.

But since they are subbing, its unlikely they know how much the mark up is. I would ask for 10-15% more, see what you get. They already like you.....enough to hire you, see if you can turn that into a job.

Don't be afraid to ask for more money, assuming you offer value.

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Posted by saintforlife1

Member since Jul 2012

1321 posts

Posted on 9/22/14 at 5:42 pm to lsufanintexas

It is actually not uncommon for your pay to go down when you take a full time role, this is especially true in Software Engineering roles. A person could me making $80-$100 per hour as a contractor, but when they go salaried, they don't come close to that hourly rate. Full time employees cost the company a lot more when you add benefits (vacation days, health insurance, stock options, bonuses, 401(K) matching and other perks). Sometimes the benefits add up to as much as your base salary itself.

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