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How to negotiate contract offer with potential to full time?
Old 06-05-2019, 07:48 AM   #1
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How to negotiate contract offer with potential to full time?

I just got offered a 3 month contract with potential for full-time at a tech startup ( < 10 people), no 3rd party recruitment firm. I was sent an informal offer over e-mail which said 10-15 hrs/wk for $45-$55/hr. I asked if I could raise the time commitment, however the hiring manager said that he has a max monthly limit for payment. They are in the middle of raising Series A, hence why they can't offer a full-time position and opted for contract in the interim. In addition, to assess my work before coming on-board as a FTE.

My ideal scenario would be $60/hr for 20 hours, especially since this will be a 1099. This is based on a previous contract which was $60/hr with a compensation limit. I'm going to wait until I get the full contract to negotiate.

I'm making a career change and unemployed. So this would be a good opportunity to build my experience and get some cashflow, even if they don't offer me a full-time in the end. How would you approach this?
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Old 06-05-2019, 09:02 AM   #2
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If the max he can afford is 10 hrs @ $55 or 15 hrs @ $45, then that's $550 to $675/wk. You want 20 hrs @ $60, which is $1200/wk. My experience with start-ups is that they don't have enough cash to be able to pay twice as much as they budgeted for something.

Is there some way you could redefine or expand the scope of work so that it takes advantage of a unique skill that you have from your previous career? Then you could argue that you're filling multiple roles and freeing up another person's time, so you should be worth more.

If not, and you're firm on wanting the higher amount, then you just have to tell them that and be prepared to walk away from the offer.
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Old 06-05-2019, 09:14 AM   #3
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No answers, but some questions for you to consider. Have you been unemployed a long time? Worst case scenario for this pay might be 10 hrs. at $45/hr. = $23,400 annualized. Best case is 15 hrs. at $55/hr. = $42,900. How do those numbers compare with full-time employees there? How viable is it to get work quickly in your new chosen career?
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Old 06-05-2019, 09:21 AM   #4
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I don't get the 10 dollar an hour salary range? How would that work? As cathy pointed it really messes with your gross pay per week.
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Old 06-05-2019, 09:34 AM   #5
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Are you free to continue your job search with some time off for interviews?

Are you committed for that full 3 months if you find other work?

Whatever per-hour you would get under this offer will most likely affect your eventual FT offer if it should come to that. I'd ask for the 15 hrs at $55 per and see what they respond with. Once in the door, there is likelihood that it may expand to 20 hours or more, depending on the need for your expertise. Will you be self-employed? There are some tax benefits that will help offset the <60 per hour desired.
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Old 06-05-2019, 09:46 AM   #6
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OP - Since you are unemployed, and it's only 15 hrs, I'd take it and keep looking for a full time job.
Perhaps in a month or two when you get a full time offer, you can then pick between the two.
How are they planning the work allotment, work 2 days per week ? Certainly you want to limit the trips to the office as it kills your day and travel time is a pain.

ps - unrelated, but have you set up a solo-401K ? Being a contractor (1099) vs employee means you can.
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Old 06-05-2019, 09:50 AM   #7
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You are still in working years and currently unemployed? If so, what are your other job prospects? Will a 3 month part-time commitment to this start-up cause you problems if you find another full time job? How firm is the contract from both party's perspective? Can they let you go before end of the contract with any consequence? Likewise can you get out with any consequence?


You state it is a new field you want to get into. The contract position may be a good way to get in the door. Especially if the funding comes through and it becomes a successful business; where you can become a FTE. As a FTE will you still be a 1099 contractor?
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Old 06-05-2019, 10:57 AM   #8
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Quote:
Originally Posted by sizzlinkola View Post
I just got offered a 3 month contract with potential for full-time at a tech startup ( < 10 people), no 3rd party recruitment firm. I was sent an informal offer over e-mail which said 10-15 hrs/wk for $45-$55/hr. I asked if I could raise the time commitment, however the hiring manager said that he has a max monthly limit for payment. They are in the middle of raising Series A, hence why they can't offer a full-time position and opted for contract in the interim. In addition, to assess my work before coming on-board as a FTE.

My ideal scenario would be $60/hr for 20 hours, especially since this will be a 1099. This is based on a previous contract which was $60/hr with a compensation limit. I'm going to wait until I get the full contract to negotiate.

I'm making a career change and unemployed. So this would be a good opportunity to build my experience and get some cashflow, even if they don't offer me a full-time in the end. How would you approach this?
I would not try to negotiate the terms of the contract
I would focus on the highest dollar per hour rate you can get, and if it's $55/hr, and they only offer 8 hours per week, take the highest pay rate. This is because the next job you get you can focus on a rate higher than $55.

If you don't value your time, I guarantee no one else will either.
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Old 06-05-2019, 02:04 PM   #9
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Originally Posted by ivinsfan View Post
I don't get the 10 dollar an hour salary range? How would that work? As cathy pointed it really messes with your gross pay per week.
I think they gave those ranges to anchor a negotiation. It seems like they have a max monthly limit that we have to work with. I believe those ranges serve as an example of what they're willing to offer.

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Originally Posted by gwraigty View Post
No answers, but some questions for you to consider. Have you been unemployed a long time? Worst case scenario for this pay might be 10 hrs. at $45/hr. = $23,400 annualized. Best case is 15 hrs. at $55/hr. = $42,900. How do those numbers compare with full-time employees there? How viable is it to get work quickly in your new chosen career?
I've been unemployed since Feb. But I've had some freelance gigs here and there to build more of my experience. The numbers are within range if I was a salaried employee. Since I'll be a 1099, I think it's low. Then again, they're an early-stage startup strapped for cash.

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Originally Posted by CRLLS View Post
Are you free to continue your job search with some time off for interviews?

Are you committed for that full 3 months if you find other work?

Whatever per-hour you would get under this offer will most likely affect your eventual FT offer if it should come to that. I'd ask for the 15 hrs at $55 per and see what they respond with. Once in the door, there is likelihood that it may expand to 20 hours or more, depending on the need for your expertise. Will you be self-employed? There are some tax benefits that will help offset the <60 per hour desired.
I'm free to continue my job search, yes. I plan to still look for a full-time or more contract work. I am not committed as long as I give them a notice.

That's what I was thinking to. I need to get the highest hourly rate because that'll set the anchor for the FT offer.

Quote:
Originally Posted by 38Chevy454 View Post
You are still in working years and currently unemployed? If so, what are your other job prospects? Will a 3 month part-time commitment to this start-up cause you problems if you find another full time job? How firm is the contract from both party's perspective? Can they let you go before end of the contract with any consequence? Likewise can you get out with any consequence?


You state it is a new field you want to get into. The contract position may be a good way to get in the door. Especially if the funding comes through and it becomes a successful business; where you can become a FTE. As a FTE will you still be a 1099 contractor?
See my comments above to CRLLS. When I become a FTE, I'll be under W2 with health insurance and benefits.
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Old 06-06-2019, 01:00 AM   #10
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Originally Posted by jIMOh View Post
I would not try to negotiate the terms of the contract
I would focus on the highest dollar per hour rate you can get, and if it's $55/hr, and they only offer 8 hours per week, take the highest pay rate. This is because the next job you get you can focus on a rate higher than $55.

If you don't value your time, I guarantee no one else will either.
In my experience the amount you get for one contract has nothing to do with your next contract. Especially in startups. Different for full time. But getting 55 up front might help you with a better fte salary with the same company.

I would take the job at whatever rate/hours they give you. Especially if you're getting your foot in the door. If you like the company and are learning new stuff put in extra hours for free (you don't have to tell them you are if you don't want to), so that you look more productive than your official hours. If they offer you 10 hours you probably won't get much done. Not your fault but that's how you'll be judged. That's if you'd like to get fte there. You want to impress them.

You'll have time to look at the same time. It looks much better to a future employer that you're presently working than presently unemployed.
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Old 06-06-2019, 03:52 AM   #11
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Take what you can get now and keep looking.
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Old 06-06-2019, 04:08 AM   #12
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It's about just the contract you signed. It's important to keep that in mind, and not have your judgment clouded by things not in the contract. I would go for the highest rate, and not worry about how many hours per week. In my non-contract time, I'd continue to search for other opportunity.
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