Contractor going to work for contractee?

July 20, 2008 7:22 PM

I work in a small shop as a contractor (I'm a programmer/mathematician) for a rather large organization. I've come to realize that I'd much rather work for said larger organization than the contracting shop. There's better opportunity for career advancement, more interesting and varied projects, a much better commute, etc. I am, however, rather new to this contractor thing, and I have no idea how to broach the subject with my contacts at said larger organization. Should I even talk to them about this? Is someone going from contractor-->contractee unheard of?

Please follow-up to [e-mail], if needed.

(Posted anonymously because many coworkers use AskMeFi, and I'd just assume they not connect this post to me.)

posted by anonymous to work & money (12 comments total)

Talk to your manager at the large organization. It is very common to go from contractor to full time employee ("going full time"). You have no career at a contract shop, and the longer you stay there, the worse it looks on your resume.

Keep in mind that the contracting company you work for is billing you out at somewhere between 200% and 400% of what they are paying you. Closer to 200% if your job is a generic software industry job, 400% or more if you are in a niche market where qualified people are hard to find. If aren't a terrible employee, the larger organization will be very interested in bringing you on full time.
posted by b1tr0t at 7:35 PM on July 20, 2008

Well, I worked as a contract employee for 4 years and then was hired on as an employee. At my company, contract employees can only apply for jobs that are posted externally. If they want to hire you, they have to go through the red tape of getting an external posting for them to even interview you. This can be very difficult if there's a hiring freeze, or a division shutting down so there's a glut of employees looking for other positions. So, at my company, you really have to impress them enough to go to the trouble, which might be hard to do if you're not onsite.

So, I think you need to do some research and find out the hiring practices and climate of the company. If you think you know your contacts well enough, go ahead and ask them. I wouldn't be offended if any of the contractors who work for me were to ask that question.
posted by cabingirl at 7:51 PM on July 20, 2008

Most small shops would try to protect their interests from moves like this by having you sign some sort of agreement with them saying that you won't try to solicit work from clients whom you met through their auspices. (Certainly a large organization would ask this from their contractors). As you don't mention this, you are within your rights to go for this, but realize that unless your current small shop is unusual in its policies, they will be pissed off, and it is also possible that some in the big corporation may have greater loyalties to the small shop than you think, and may alert them of your intentions.

How to broach the subject - as diplomatically as possible, and leaving yourself room to back away if the initial contact proves unfavorable.

If - in addition to providing you with your new job contacts - the small shop provided some sort of specialized training to you that allows you to do a better job for the big organization, then it I think it would be very unsportsmanlike to make a move like this behind their back. In that situation, or even a less ethically ambiguous one, I think you would be best served if you could find an approach to getting the job with the big corporation that is more win win for all the parties (i.e. maybe the big organization could pay a finders fee to the small one).
posted by extrabox at 8:02 PM on July 20, 2008

Certainly check your current contract and be sure there are no stipulations that wouldn't allow you to work for the larger company.
posted by OrangeDrink at 8:19 PM on July 20, 2008

I made a transition from contractor to employee a few years ago. Several factors will make this easier or harder. First, realize that the nature of what you want to do is both common and financially deleterious to your contracting company, so they've probably considered that it could happen and put language in your contract to prevent it from happening. Whenever I worked as a contractor I had to sign an agreement saying that if I ever left said contracting company that I had to wait at least 1 year before I could accept employment with any of their clients. The contracting company may also have a similar clause for their client that they cannot approach any of their contractors with offers of full-time employment. If you or they have language like that in your contract you are legally bound by it - you can make your own decision as to whether or not you think they would pursue a lawsuit over this.

There is a bit of a ray of hope, even if such language is in place. If you're enormously valuable to the company that you've been contracted out to, they could approach the contracting company to "make a deal" - this means usually that they would pay a lump sum to buy the right to hire you outright. This softens the financial blow to the contracting company because it provides them with upfront money that they would normally have received over time, and they wouldn't have to "do anything" (invoicing, managing you) to receive it. Of course, depending on how valuable you are to the contracting company, it might cost a lot of money to buy out your contract, but I think most organizations have their price that they'd consider it a good deal and release you from your contract clauses.

I think the best step to take is to have a lawyer look at your legal arrangement with the contracting company to see if there are any clauses that prevent YOU from jumping. If there are none, I'd approach the company receiving your contracting services and let them know you'd be interested in full-time employment with them provided there was an above-board, legal way for them to make that happen with your contracting agency.
posted by sherlockt at 8:19 PM on July 20, 2008

For a variety of legal reasons big corporations often have a fixed duration that contractors are allowed to stay . In the last 3 places I've worked it's between a year and 2 years. At that point, we either hire you or replace you with the next cog on the wheel of contractors.

Hiring a contractor can mean a few things depending on the contract language. Some contracts are written that the corporation has to pay the contract firm $XX to hire. Other contracts stipulate a payout if the corporation hires the contractor within X months, but after that there is no penalty. I'm sure some contracts prevent the hire, but I've never encountered one. If there is fee due to the contract firm, don't sweat it. Recruiting candidates is time consuming and expensive. You are a known quantity; the fee is a bargain in comparison to finding someone on the open market.

Tomorrow, tell your hiring manager that you really like the job and that you're interested in going full-time. He might know the process to hire you or he can direct you to HR. Either way, you need to find out if there is fixed duration on your contract. If there is, then you'll know how long you have to make your irreplaceable.
posted by 26.2 at 8:45 PM on July 20, 2008

I think there's a little confusion about what kind of contractor you are.

If you work through a job (aka "temp") agency that has placed you at Big Company, then moving to the Big Company full-time happens all the time, and the agency WANTS it to happen because their contract stipulates the hiring company pay them a hefty fee to poach you.

But it sounds to me like you are a full-time employee of small company "A," which is contracted to do work for big company "B"? i don't know that much about that situation, but it might help to clear up the confusion with an update...
posted by drjimmy11 at 8:48 PM on July 20, 2008

Most of the firms I have known in the "large organization" role of your example wouldn't "poach" contractors from their hired firms without a very, very good reason.

It's not only destructive to the intercorporate relationship, it's exceedingly bad form, and that can come back to hurt the large organization later, if only in reputation.

So, I guess my advice is: tread cautiously!
posted by rokusan at 9:20 PM on July 20, 2008

If you work through a job (aka "temp") agency that has placed you at Big Company, then moving to the Big Company full-time happens all the time, and the agency WANTS it to happen because their contract stipulates the hiring company pay them a hefty fee to poach you.

This isn't necessarily true; the agency can make a lot more money over time from their markup on your hourly rate than they would from a one-time placement fee, so they probably would prefer that you kept working through them. I would take a look at your own contract to ensure you understand any agreements you may have made with your in regard to this when you started.
posted by sevenyearlurk at 9:27 PM on July 20, 2008

I bet there's something in the contract between the company and the agency about this. I don't think it'd hurt to ask your company contact. Just couch it naively, like, "You think a company like this would hire a guy like me?"
posted by rhizome at 10:55 PM on July 20, 2008

This recently happened with two groups we work closely with. The way this contractor made it happen (I'm guessing, since this is what happened in his conversations with me, another contractee) was to start working to make friends at the places (go out to lunch just to catch up), and then in the spirit of "how is your life?" mentioning that he's starting to look around at other options, not immediately, but maybe in the next six months or so as various projects finish up (the subtext: I'm not going to leave you guys in the lurch). He didn't directly say "I'd be interested in working at YourPlace, so send me job listings," but somewhere in the conversation he did say some very general things about the kind of work he was considering looking for, and he asked how I liked working at the place I worked, and mentioned that it seemed like we were growing. Then he asked if I was planning to stay a long time there and what my career trajectory was, turning the focus to me in a way that made it all seem very natural and conversational. So it all flew almost under my radar, and I forgot it and went on working with him in our contractor-contractee ways for another nine months with no awkwardness or new shift in how we related, but I do remember asking myself if we had any openings coming up and thinking I'd send anything I saw over to him. He may have broached it more directly with the group that eventually hired him, but my guess it was a similar approach of just making it known that he was starting to look around.

YMMV, and you may not have to be so delicate, but the world we work in here is very small, so his subtlety was useful.
posted by salvia at 8:05 AM on July 21, 2008

It really depends on the agency you are with and their agreements with the end-client.

However, most have a roll-over clause, whereby they get a percentage of your first-year salary. But - the contracting agency may not want to do that if you've only been with them at that end-client for a few months... Usually the "break-even", no-ill-will timeframe is 6 months or more.

But yeah, if the agency you are with is a body-shop, then it is pretty much a dead-end.
posted by jkaczor at 8:14 AM on July 21, 2008