converting from contract to full time employee 1

[pelajhia]

just curious if anyone has dealt with this:
my spouse, in IT industry a few years, has recently gotten a contract position which was to move to fulltime employee status after 3 months.
It has not, although there is talk of slowly going in that direction. At this time, he is in no hurry because the last 2-3months have been full to the brim with overtime.
He came on at a certain rate and is thinking he agreed to take the job at that rate and the move to full time employee would not be an opportunity to discuss his compensation. In particular while he thinks the overtime will be dying down a bit, could he use this recent frenzy of overtime as a point to leverage a better salary rate or would that not be considered appropriate?

Or, if overtime was not even a consideration, would an employee moving from contract to fulltime after a short time (6 mos) be in a position to discuss compensation?

 

[carp]

He'll definitely be in a position to discuss compensation - whether he wants to or not! You have to understand that when he goes from contractor to permanent staff, he is actually changing jobs. The work site and taskings will be identical, but he is changing employers.
My experience has been that while I'm a contractor, my manager whines incessently about how much more expensive I am as a contractor because of all of the overhead. Then, when it comes time to go permanent, suddenly it's more expensive to have me as permanent staff because of benefits, etc. Long story short, I have typically wound up with a salary that's about 5% - 10% lower than the contracting salary. So it comes down to what kind of benefits they're offering, etc. If they won't budge on salary, some areas you might explore are signing bonuses (I think these are less common now then they used to be, but I could be wrong), extra vacation days, stock options, and/or accelerated vesting in a 401(k) - I know one person who was able to convert to permanent party with full vestment.
You have to be ready to play hardball - your bargaining power is never as strong as when you are converting from contract to permanent!

 

[chiph]

I went from contractor to full-time back in October at the same place I was contracting.

You will definitely get a reduction in raw salary. However, this is made up by the tax advantages of having a 401(k), and being able to deduct some medical costs pre-tax (assuming this is in the USA).

However, if the firm appears to have the potential for a lot of overtime, and assuming he is being paid for the overtime, why would you switch?

Chip H.


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[carp]

One reason would be a situation like my last one: the employer makes an offer like "you can accept this job for $x within 48 hours or we'll open a new contract with somebody else". I knew that even with the pay reduction, it was still going to be the best paycheck in town, so I took it. Also, my contract position had virtually the same benefits offered by my new employer (a rare situation, but it was nice while it lasted!), so it truly was a reduction. But that's the problem with trying to sell in a buyer's market!

 

[kHz]

Most likely you will get a reduction in pay by going FTE. I contract (and would prefer to until I retire) and I get all the advantages of 401K, pre-tax medical and dental, etc. Plus, if I had to I could work overtime, but I prefer to stick with 40/hour weeks and leave early at times.

Experience has a lot to do with pay too. As well as specialties. A general IT person who does help desk work and junior network people would probably only get $20/hour and are basically a dime a dozen. More experienced people that specialize can get 3 or 4 times that rate (depending on market).

 

[JD5241]

I just switched from contract to full-time a couple months ago, and managed to negotiate for the same hourly wage, plus paid benefits and opportunities for overtime. Guess I'm not the average example, but it all depends on the needs of the employer and what they're willing to go for based on your performance.