marketer contract rate before full0time
May 14, 2009 8:39 AM   Subscribe

I wowed folks at my job interview for the full-time position being a webmaster / graphic designer / marketer. But they want me as a contractor first due to the economy. Thoughts on compensation?

Folks at my job interview for a full-time position being their webmaster / graphic designer / marketer were "very impressed" with me. Their prior person was a jack-of-all trades and they feel I fit similarly. At the moment the current economy has them seeking me as a contractor – before the ultimate goal of me being full-time. They mentioned they had foreseen my requested salary of $60k at the job interview. It's not far off from this question, except adding the marketing and subtracting the coding. In the past, I feel I've been too flexible on pay in the interest of compromise and avoiding tough negotiation. Thoughts on discussing compensation with them (tomorrow morning)?
posted by umlaut to Work & Money (15 answers total) 6 users marked this as a favorite
In addition to all taxes, calculate how much it will cost you to buy private medical/dental/vision insurance for yourself and your dependents over the course of a year, as well as paid vacation, a health club membership (if offered), and other benefits you would expect from a full-time employer. Have these numbers ready and available when negotiating your pay.
posted by halogen at 8:48 AM on May 14, 2009

It would depend on what type of contractor. Will they make you go through an agency? (where you would be a W2 contractor and subject to whatever agreement they have with the agency.) Or would you be an independent? Then you have to figure in all of your additional expenses as mentioned in the other question.

If they are expecting 60K salary then factor in the payroll taxes, SSI, vacation, other benefits, 401K etc. That can easily add up to another 20%. Call it $72k and go from there.
posted by Gungho at 8:52 AM on May 14, 2009

First if all, don't just take this lying down. Tell them you really like them and want to work for them, but you think you might get a full-time offer at the other place you just interviewed, and you really want the security...

This worked like a charm for me in the past.

If you do get stuck contracting, your hourly rate should be about $60 an hour. Remember you get no benefits and there is no guarantee of full-time ever. Don't let them snow you with "but it'll go full time in 3 months..." That's such crap. if they were 100% sure they wanted you full-time, they would hire you fulltime right now. Make them pay for hedging their bets.
posted by drjimmy11 at 8:54 AM on May 14, 2009 [3 favorites]

Assign a cost to each of the above items mentioned by halogen and Gungho and go to the meeting with a printed itemization of the additional burdens of being a contractor. This will make it very easy for you to justify your numbers, and harder for them to controvert.

Go ahead and be more specific than is reasonable - significant figures have no place in this discussion. When estimating your social security as a contractor, for example, don't round to the nearest hundred dollars. The precision in your request will make it obvious to them you've thought it out; round numbers, especially in aggregate, are easier to round down.

In past negotiations when I haven't itemized and documented my reasoning for my suggested compensation, I've been caught in a weaker position during negotiations. The spoken word is necessarily vague, and even in very friendly and sympathetic negotiations this ambiguity favors the institution; an individual has many specific reasons for requiring a specific compensation, but an institution only has one or two reasons for denying it. They're in a stronger position for thinking on their feet than you are, so take notes.
posted by doteatop at 9:04 AM on May 14, 2009

Keep the thought in the back of your mind that they may never actually plan to convert you to full-time employee. It's a lot more cost-effective for them to keep you as a contractor, especially if there isn't something in writing that spells-out a timetable for conversion to employee. If left open-ended (i.e. "as soon as this economy picks up.") you will most likely be a permanent contractor.

If you decide you are ok with being a contractor, be sure that you don't sign anything that locks you down to a set level of compensation in perpetuity.
posted by Thorzdad at 9:14 AM on May 14, 2009 [1 favorite]

If you wanted $60k as a full time for yearly salary, then $60/hr as a contractor is reasonable. They will try to do some math and say $60k per year is like $30/hr. Don't let them get away with that. If you feel nice and want to negotiate, find a middle ground. But you want that middle ground to be close to $60/hr, especially if you can't get benefits from a spouse/partner. For a company, there are a lot of costs on a full-time employee other than your salary. The company is skirting those costs (and leaving them up to you) and is also entering into a situation that is easier for them to let you go than a full-time employment contract. The company should compensate you for these things.
posted by cmm at 9:45 AM on May 14, 2009

60K * .20 = 72K ( 20% for benefits is a good rough estimate)

72,000/48*40 = $37.5 an hour (49 = 4 weeks vacation or sick a year, 40 hours a week. You may want to kick up the time off to 4 weeks)

$60 may be a good number to negotiate for its relatively low for a contract position - though you may actually end up taking a pay cut when you go full time.

Note this assumes full time work as if you were salaried. I always kick up my rate contracting to account for down time.
posted by bitdamaged at 9:45 AM on May 14, 2009 [1 favorite]

(never mind the bit about kicking time up to 4 weeks - I did that for you)
posted by bitdamaged at 9:46 AM on May 14, 2009

First ask them whether you will have a guaranteed number of hours, and whether there is a definite date when the contractor status will end.

Negotiation is never as tough as it seems it would be. You are now dealing with business person-to-business person, not employer-to-employee, and if you engage in simple negotiations like this - over hourly rates - it's pretty normal.

If you say that your normal hourly rate is $50/hr, they will likely counter with what they think will be a fair hourly rate. If they come back with $30/hr, tell them that you will take that lower rate in exchange for full-time employment with benefits, but your contractor hourly has to compensate for insurance and retirement benefits, as well as the need to maintain your own office, supplies and software. Let them know you will discount your $50/hr rate for them, since it looks like they will take you on full time, to like $40/hr.

These are just example numbers, you can start at something besides $50/hr.

By the way, do you have an hourly contract rate that you market yourself at? Do you know what the hourly contract rate is for webmasters / graphic designers / marketers with your level of experience in your locale?
posted by jabberjaw at 9:51 AM on May 14, 2009

Actually, after re-reading the other comments, $60/hr does sound like a better number. Warning: you may find that you prefer contracting and not full-time work once you get a taste for it.
posted by jabberjaw at 9:53 AM on May 14, 2009

As someone who has been down this slippery slope as a writer, I recommend you familiarize yourself with your rights as a contractor (if you haven't already). I interviewed for what I was led to believe was a full-time salaried position, only to be offered a contract instead. Basically, they wanted to treat me as an employee (direct my work, decide when, where and how to I got projects done, etc.) but pay me like a contractor (no benefits, make me responsible for my own taxes, etc.).

If you are an independent contractor, the company in question is your client, not your employer, so in addition to a fair hourly rate, you should get to enjoy the perks of being your own boss. I had to constantly fight to maintain my rights as a contractor, which was a pain in the ass, but to me, worth it in the end.

Here is an overview of contractor's rights.
posted by lovermont at 10:05 AM on May 14, 2009 [3 favorites]

It would depend on what type of contractor. Will they make you go through an agency?

I can't believe people are providing details without knowing the answer to this. There's a huge difference! The people talking about $60 per hour are referring to independent contractors. The people talking about 20% over full-time pay are referring to contracting through a vendor.

I wouldn't get too carried away on negotiating a high rate. There's some serious downward wage pressure right now. Employers are in the driver's seat. I've been contracting at a Fortune 100 IT company for 5 years through an agency. My agency is being forced to go through a reverse auction to set new rates. The maximum bid will result in a 21% pay decrease for my position.
posted by diogenes at 10:37 AM on May 14, 2009

My general rule of thumb is to set your rate at 1/1000th of the annual salary you would want if you were full time. From there, adjust up or down based on how much you want or don't want the gig.

So.... $60/hr.

If they ask you to go lower, it is simply your choice as to whether you want it or not.
posted by spilon at 11:15 AM on May 14, 2009

I absolutely disagree that employers are in the drivers seat in this particular regard. It is really, really hard to find a good, solid programmer that meets all your criteria, has experience, and can add value. The process takes a long time.

My advice would be to remember you're the one with the skill - all they are offering is work.
posted by jlstitt at 11:17 AM on May 14, 2009 [1 favorite]

Response by poster: It would be direct contracting I believe - no agency intermediary.
posted by umlaut at 2:41 PM on May 14, 2009

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