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re: How much should I request when moving from contractor to full-time employee?
Posted on 9/22/14 at 6:32 pm to Epic Cajun
Posted on 9/22/14 at 6:32 pm to Epic Cajun
Let's use the numbers the OP used. He said the end client (the Fortune 500 company) is paying $190K for his postion, which turns out to be: $190,000/(40*52) = ~$91 per hour. But if they hire him full time, do you think they will offer him an annual salary of $190K? I think not. Because they still have to pay for his vacation days, health/dental/life insurance, 401(K) etc now that he is a full-time employee. If they offer him a salary of $190K, all his benefits will be on top of that making him much to expensive to hire as a full-time employee than as a contractor.
A senior director at my company once said, even thought engineers under him make about $100-120K in salary per year, it actually costs the company closer to $200K to employ the person when you tack on all the benefits. Believe it or not, they even look at stuff like cubicle space, laptops, company paid cell phones etc. when considering the overall cost per head count.
A senior director at my company once said, even thought engineers under him make about $100-120K in salary per year, it actually costs the company closer to $200K to employ the person when you tack on all the benefits. Believe it or not, they even look at stuff like cubicle space, laptops, company paid cell phones etc. when considering the overall cost per head count.
This post was edited on 9/22/14 at 6:34 pm
3
Posted on 9/22/14 at 8:04 pm to saintforlife1
I guess it would depend if markup #1 is based on his salary or total cost of employment. The latter being the only way asking for a raise would still net a savings by cutting out the middle man.
Posted on 9/22/14 at 8:41 pm to saintforlife1
He should definitely make more working direct
The company may be paying him less per hour than they originally paid for him (even after adding benefits), essentially because they were already paying for his wage, benefits, and the cut of two different firms
By eliminating those two cuts, he should have some wiggle room no doubt
Even though indirectly, the F500 company was always paying for his benefits, contract or not
The company may be paying him less per hour than they originally paid for him (even after adding benefits), essentially because they were already paying for his wage, benefits, and the cut of two different firms
By eliminating those two cuts, he should have some wiggle room no doubt
Even though indirectly, the F500 company was always paying for his benefits, contract or not
Posted on 9/23/14 at 9:17 am to saintforlife1
quote:
Let's use the numbers the OP used. He said the end client (the Fortune 500 company) is paying $190K for his postion, which turns out to be: $190,000/(40*52) = ~$91 per hour. But if they hire him full time, do you think they will offer him an annual salary of $190K? I think not. Because they still have to pay for his vacation days, health/dental/life insurance, 401(K) etc now that he is a full-time employee. If they offer him a salary of $190K, all his benefits will be on top of that making him much to expensive to hire as a full-time employee than as a contractor.
I don't believe he wants what the company is paying for him, he just wants more than what his current hourly wage is (which is substantially less than what the company is currently paying for him). As I said, if he were going from contracting to the company to salary, your premise would be correct, but that isn't the case. He's essentially eliminating two middle men, which were raising his cost to the company dramatically (I'd assume).
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