As a career counselor, career guidance professional, HR professional and staffing executive who has hired or placed 1,275+ individuals, I've gotten several inquiries concerning, "I've got a contract-to-hire opportunity...
What should I ask in terms of salary?" This is solid topic and a definite concern as we see hints of the economy improving.
Many firms want to offer a candidate a contract-position to see how the person will perform, and then make the decision to hire / not hire.
From the corporate perspective, this kind of decision makes some sense.
"Try-Before-You-Buy" could be an applicable scenario.
Corporate reasons for contract versus immediate hire are savings in all the new-hire components, such as:benefits, ease of dismissal if needed, (I know, this is a dark side), payroll set -up, rooster additions, etc.
The inquiries I'm getting revolve around how much of an hourly rate should a person request when taking a contract position.
There are two scenarios:If you are going through a professional service firm, your old salary plus a fee will be sent to the client.
Normally your salary is predetermined to the agency and discussed with the company for a conversion fee in say six months.
If you contract yourself, here are some keys.
What was your last salary?Was the salary contract work or were you on a full-time-position? Don't think you will be automatically given a 10% increase because you are switching jobs.
Can you W-2 (the company pays taxes), or will you 1099 (where you pay the taxes?) To 1099, there are several steps including a DBA, EIN number, and so on.
These are topics for your accountant to work out with you.
For a contract rate, this point is the most important.
If you were making $80,000 in your previous, most or current position, a fair contract rate would be in the low $40s / HR.
You need to be ready for a conversion rate, yet be fair to yourself in terms of compensation.
Or you may decide to take a lower rate in the $37 - 38 /HR.
Or you many need to see what the client will offer.
I have recently seen candidates in a similar position price themselves at $50 - 55/HR and maybe, if there is a needed skill set, be able to be considered.
This is a risky step.
If you need assistance in determining a competitive salary and how to approach your next position, meet with a professional to gain insight and solid career advice.