I have a Problem, I was Offered a Job!

[ShokWaveRider]

After being FIRE'd for over 3 years, an old friend contacted me and asked me to help him out on a job. He used to be on my staff some 15 years previously. Well, I did this, and in doing so met the principles of the company. We got on really well. It is a small company with very high values, and my (previous) expertise fits in very well.

I am, or at least used to be in IT specializing in Computer, Network, Infrastructure with reference to Document Management and ISO 9000 certification from a software and hardware perspective. This is now called ECM or Enterprise Content Managment. While I was working, I was managing rather than individually contributing, however, I still kept my hand in doing the odd project, and being one of my own staff so to speak. This position would be similar.

Well the President and CEO of this company (the owners actually) who by the way have very similar personalities to myself, hit it off with me after only a day. Well, they have indicated an interest in hiring me full time. This would certainly solve the healthcare issue, as they have a great health plan as well as most of the other traditional benefits. About the only thing they do not have is a company matching in their 401k. This is quite common in small companies, and they usually more than make up for it in bonus'. They seem to be open to any arrangement. Flexible vacations, no fixed work location (I can work from home mostly), etc.

For the last job, which I am still finishing, I contracted to them. I invented a daily rate that I thought was fair + expenses, and they did not even negociate, they simply agreed. However, for a full time position, (which may even be part time but treated as full time from a benefits perspective) I have no idea what to ask for in salary and bonus'. I know what I made 3 years ago, and then the money was above the average as I also worked for a small company, and they usually pay more than the big conglomerates do. I am just so out of touch with salaries. Should I play the nice guy and ask for what I think is fair based on my previous salary,which by the way would be very early 6 figures + bonus', or negociate for just shy of top dollar? If so where do I find out what the job is worth, it is pretty specialized. They are nice people breaking into an new area, for them, where I specialize. They were hit hard by the last economic downturn and are looking for ways to get back on top. I do not really want to be a hard nose, but I know that once you negociate a compensation package, all future increases are based on it.

Has anyone here been in the same boat? There are lots of wise folk on this forum and I respect your opinions. The work if it turns out like I think it might, is almost like fun for me, other than the travel. I am only 50 so working for another few years would not be as bad as I used to think it would be. I do get bored sometimes, not often but sometimes in my ER. I could also stay on a contract basis, but then there would be no health or benefits package. I do not need to work, but this position and the circumstances surrounding it interests me.

Comments?

SWR

 

[bogart]

If you like the job, and like the people, and have the flexibility you want, and don't need the money, and get good health care benefits, my thought would be not to risk souring the situation by trying to go for top dollar. What would be the point? Seems to me like a good opportunity to have a nice situation without really rejoining the rat race. Again, this assumes you don't need the money.

 

[dory36]

I think you need to keep in mind that, almost by definition, the folks on this board are probably not very good at doing what it takes to find the best long term accommodation with an employer.

Best of luck!

 

[moghopper]

I am only 50 so working for another few years would not be as bad as I used to think it would be.

Sometimes people get hung up on the RE part of the equation - but the really important part is the FI part, no?

Once you're FI, you can do what you want, and if a reasonably balanced amount of working is in that equation, so be it. If you find something you enjoy, and will get paid for it, that sounds great to me! And since you're FI, you can always take off.

 

[justin]

I think our group insurance plan at the small business I work for requires 1000 hrs/yr to be "full-time" and therefore eligible for membership in the group insurance plan. If obtaining health insurance is your main goal from the job, see what they'll pay you for 1000 hrs/yr (or whatever their hour requirement is) "salary" then negotiate an overhead pay rate (straight or 1.x pay). Don't have a clue as to compensation. There are "salary consultants" out there that you could pay to tell you what you're worth per hour.

 

[Caroline]

I don't know what your specific job might pay nowadays, but I do remember a lesson from B-School and Negotiations class. 

"(S)he who names a figure first -- loses." 

Again, not knowing the situation, I see that you named a figure first when contracting for these folks, and they didn't even negotiate.  That suggests to me that they might have been willing to go higher.  While I agree that you don't want to do anything to jeopardize the deal if you really want it, you don't want to leave a lot of money on the table either. (The fact that these people are "nice" has nothing to do with it, IMHO -- unless this is a not-for-profit, humanitarian organization.)

What would it be like for you to say to them exactly what you've said to us?  That you've been out of the loop, you're not entirely sure what salary would be appropriate, but you know that they'll be fair, yada yada, and that you'd be interested in knowing what THEY think the job is worth to them.

This is hard to pull off -- they'll probably try to get you to go first, but I've seen people very politely avoid answering, and they did very well as a result.

In your favor, you're a known quantity -- they wouldn't be offering you a job if you hadn't done well by them as a consultant.  So they ought to put you at the higher end of the scale right there, since you're not much of a risk.

One other option -- your friend or someone else in the company. Are you friends enough and is he connected enough to know what's reasonable at this company?  (You did him a favor by helping out, after all.  He owes you one!)

Personal story -- I was contracting once and hit it off very well with the HR Director.  When I was offered a full-time job she immediately volunteered to me the maximum the boss was willing to pay.  I asked the boss for $5K more than that so he could feel good about negotiating me down to (the top of) his range.  Everyone was happy. 

Best of luck to you!
Caroline

 

[Nords]

I think you need to keep in mind that, almost by definition, the folks on this board are probably not very good at doing what it takes to find the best long term accommodation with an employer.   Best of luck!

Yeah, but that won't keep us from having an opinion...

The work if it turns out like I think it might, is almost like fun for me, other than the travel. I am only 50 so working for another few years would not be as bad as I used to think it would be. I do get bored sometimes, not often but sometimes in my ER. I could also stay on a contract basis, but then there would be no health or benefits package.

OK, so you found a good job.  That's always nice to find.  I don't need pennies but I still pick them up off the sidewalk.

Of the ERs who've gone back to work after sabbatical or ER, most of them have said that work sucked worse than it did before they left the workplace.  (Unclemick & TH come to mind.)  You may be "only 50" but I think your glasses are suspiciously rose-colored.  

However you've stated several times that you don't actually NEED the money.  If that's the case, why would you care to set an aggressive salary?  Why would you care about the health/benefits package?  Instead of locking yourself into deadlines and deliverables, why not offer to work for free for a couple months?  They'll get to figure out if you're worth anything, you'll figure out if you're really bored enough to start working again, and you'll be able to figure out what you're "worth".

Sorry, guys.  It's been nearly three and a half years for me, and I have yet to wake up bored... I certainly don't care to let someone else set my entertainment agenda.  

 

[MooreBonds]

Congradulations (I think ) on your offer.

One of the benefits of working for a small business is that it should be very easy to negotiate an 'unusual' compensination package, since you don't have 500 other people in your department that will be apt to do the "Well why does HE get it but I don't?" screaming.

As I have mentioned before, whenever you can, have your employer provide as many benefits as possible, to reduce your taxable income AND save the company 7.65% in Medicare/SS taxes.

So, why not put this on your list of 'demands' to the boss:

1. Company paid-for car (either leased or purchased)
2. Company paid-for car insurance and health insurance
3. Company paid-for gas...they could simply give you a credit card that you would only use for gas. At the end of the year, they could total the expenditures for the gas and take that into account when they award a bonus. So, if they were going to give you a $10k bonus but you used $5k in gas, then they'd give you a $5k bonus with the gas purchases.
4. Company paid-for car maintenance (same as #2 above). One of the upsides is that (if married) you could get some work done on your spouse's car on this card and also have the company pay for it.
5. Company paid-for cell phone, DSL line at home.
6. Company paid-for disability/life insurance (if you're interested). However, there are some catches to IRS regulations (I think) that if they offer certain insurance (life, disability) to one employee, they have to offer it to all. But, they could structure it as an option that employees could take, and pay for it with the employee's pre-tax dollars.
7. Company paid-for (insert other various expenses here). Everything from an "entertainment budget" (although companies are only allowed to deduct certain percentages for meals and entertainment expenditures).

In all of these, the overall goal is to have the company pay for expenses that you would normally be paying for with after-tax disposable income. By having the company pay for them, you get a huge immediate return on your money (saving SS, Medicare, federal, state and local income taxes) AND the company saves the 7.65% matching Medicare/SS taxes, AND the company gets a very happy, productive employee.

It might sound tedious, but all of the above could be put on a single credit card for ease of tracking.

As far as initial stages of compensation goes, I would agree with Caroline on "whoever speaks first, loses". However, I wouldn't go so far initially to say that you've been out of the loop and don't know what you're worth - I'd simply ask them to provide you with a salary range that they were looking at, and tell them that you would like to work up a specific employment package for them to look at, and you wanted to know what intial salary range you could include in the package.

That way, if they say $100k-$110k base plus 10% bonus, you could counteroffer with, say, $85k base with the above list of company-provided perks.

Also, just as a suggestion, get something in writing when you finally agree to a package. While many people simply go with verbal agreements, there have been quite a few arguments over what one person said 1-3 years ago...and a simple 1 page summary would save a world of tension and stress over getting screwed out of several thousand dollars.

Good luck

--Peter

 

[ShokWaveRider]

Peter76:

You bring up some great options for consideration.

Ian

 

[Spanky]

Nice problem to have. Regardless of you need the money, you should always shot for the compensation appropriate for the position. Do some research and find out the pay for similar positions for small or startup companies. Good luck.

 

[justin]

"(S)he who names a figure first -- loses."

In law school negotiations class, we learned the first person to move from their opening offer ends up the "loser" in a negotiation.

My last experience with negotiating my salary was something like this: I want X thousand dollars. Boss says, how about X plus Six Thousand dollars! I said, I'll think about it and talk it over with my wife. Of course, I ended up taking it, since it was six thousand over what I wanted.

 

[Jay_Gatsby]

In law school negotiations class, we learned the first person to move from their opening offer ends up the "loser" in a negotiation. 

My last experience with negotiating my salary was something like this:  I want X thousand dollars.  Boss says, how about X plus Six Thousand dollars!  I said, I'll think about it and talk it over with my wife.  Of course, I ended up taking it, since it was six thousand over what I wanted. 

True. If you're offered what you want, you should take it in most cases. One of the Laws of Power (that I mentioned in a prior post) that might be useful in such a situation is:

Law 47

Do not go Past the Mark you Aimed for; In Victory, Learn when to Stop

The moment of victory is often the moment of greatest peril. In the heat of victory, arrogance and overconfidence can push you past the goal you had aimed for, and by going too far, you make more enemies than you defeat. Do not allow success to go to your head. There is no substitute for strategy and careful planning. Set a goal, and when you reach it, stop.

 

[Texas Proud]

In all of these, the overall goal is to have the company pay for expenses that you would normally be paying for with after-tax disposable income. By having the company pay for them, you get a huge immediate return on your money (saving SS, Medicare, federal, state and local income taxes) AND the company saves the 7.65% matching Medicare/SS taxes, AND the company gets a very happy, productive employee.
--Peter

Be careful with this... these things are considered taxable income to you if they are for PERSONAL USE. The company car is supposed to be used for the company, not to do your personal use...

Now, does every company do this correctly, nope... but it is always a possibility if you get audited.

 

[Caroline]

However you've stated several times that you don't actually NEED the money.  If that's the case, why would you care to set an aggressive salary?

Back to B-school:  "The most powerful single communication you make about a product or a service is its price.  It's the difinitive shorthand we latch onto to judge quality."

You ask for a high but fair price because people believe that they get what they pay for.  It's just human nature.  Setting a low price for your services suggests that you know your own worth and have priced yourself accordingly.

They may initially be happy to get you for less, but they'll soon start to question whether you're worth less -- and that's not conducive to a happy working relationship on either side.


IMHO,
Caroline

 

[lazyday]

Congratulations, nice problem to have!

We got on really well. It is a small company with very high values, and my (previous) expertise fits in very well.
....
The work if it turns out like I think it might, is almost like fun for me, other than the travel.

Making a contribution, working with people you like, having fun, health insurance, and extra $.

I wonder if you can negotiate to minimize travel--can those responsibilites be shared/transferred?
Also hope that if you aren't having fun, you can get out reasonably quickly without hurting the company too much. If not, then I think that: 1. should impact your decision, and 2. IMO they should know the risk.

Not sure how much FI you have, but more $ probably means more security and/or better lifestyle for future.

 

[Craig]

Congrat's as well.

You're in a perfect position to negotiate for stock options, if they're open to equity sharing.  Sure, lots of options are worthless [all of mine have been so far ].  But, if you like the company, the management and the product / service, could be a nice long term benefit.  Make sure you have a clear buy-sell, and check IRC Section 83.

Also, most employers expect to pay a bit less to a full time employee than to a consultant, recognizing the consultant's additional risk and expenses (FICA, health insurance, downtime).

Consider chatting up a local recruiter in your field ... you'll likely find someone willing to give you some guidance, in exchange for the opportunity to network with you, and perhaps pick up a new client in the process.

Best of luck!

 

[tryan]

Don't "release" your slary requirements to a potential employer. If they offer you the position make them state the salary which reflects the responsibility you're undertaking (just some budgeted number).

Might be pleasantly surprised (higher than expected).

Speak first and you loose since either: it's low (they "win"); it's high (let the negotiation begin ... nobody wins); it's on the nose (unlikely).

Good Luck!

 

[Jay_Gatsby]

I hate to say this, but we're getting really deep into a myriad of considerations that are relevant to someone who intends to stay in the workforce for an extended period of time, or has some ambition to climb the corporate ladder. The considerations that might be more relevant to someone who frequents this board include but are not limited to:

(a) Independent work environment -- nobody wants a boss/supervisor breathing down his neck. When you reach a certain age and level of accomplishment, you don't need a babysitter or a slave driver. Allowing you to do things how you want, when you want and where you want is a sign of trust and respect, not a lack of discipline or managerial organization.

(b) Incentive compensation -- while having a salary is great for someone who just wants to punch a clock, if you're going to give up being retired and are expected to provide valuable expertise to a start-up business, you ought to be compensated accordingly.

(c) Collegiality -- all the money and independence in the world won't change problematic personalities. Personality conflicts make work unpleasant if not intolerable, while a group of supportive colleagues can bring out the best in you. I'm not referring to the Wal-Mart groupthink here, but rather mutual respect, giving credit where it's due, support, and a helping hand when you need it.

Just my $0.02 8)

 

[ShokWaveRider]

All:

Thanks for all the info. I do have a few mandates that may limit my salary.

1) As a Director in my previous life, I managed people and projects. With all their related hassles. No More. I do not want people management responsibilities ever again. Other than general project management, work allocation and direction. No more salary reviews, no more performance reviews etc. I am happy to perform interviews. Hiring and firing etc. I will leave to others.

2) I do not want to be the highest paid person in the place. Honestly, I would like it if they paid me a mere $75k + expenses + applicable bonus', I would probably go for it. Working from home of course. I will probably start a low 3 figures though. More than likely 25 - 35k less than what the job is worth. But I am OK with that.

3) I may even go semi temp perhaps 3 days a week and calculate the income package accordingly. As long as I get Full Health benefits and 401k etc.

I think they will go for whatever I ask/settle for, as they appear to be getting a stellar recommendation from my friend, who now holds a pretty high and respected position. I may even end up working for him, and I am also OK with that. Even though I actually hired him over 15 years ago. He worked for me for 5 years after and never lost touch. I recommended him for the job he got after he left us then. I just do not want to be taken advantage of, that is all.

And being out of the owrk force for over 3 years, puts me at a slight disadvantage.

SWR

 

[retire@40]

Getting offered a job isn't a problem.

Accepting a job could be a problem.

 

[OldAgePensioner]

SWR,
just went thru re-hire myself and here's my 2 cents. Although not IT, I worked at a place with the largest IT enterprise known to man. Global secure network. Lots of high performing ITs made $75-$85/hr.

1. Ask them to make an offer, they'll lowball by about 15% I expect. Nogotiate up by 10% (they win, you win).
2. Ask for a flexible schedule of your choosing.
3. Expenses
4. Performance bonus.

I was making $175k per year (salary,bonus,COLA, housing), when it came time to negotiate my consulting rate I aske for $115/hr, they didn't flinch. Accepted immediately and like you I wonder what they would have paid.

 

[Spanky]

1) As a Director in my previous life, I managed people and projects. With all their related hassles. No More. I do not want people management responsibilities ever again. Other than general project management, work allocation and direction. No more salary reviews, no more performance reviews etc. I am happy to perform interviews. Hiring and firing etc. I will leave to others.
SWR

SWR,

Salary and performance reviews are no fun even for non-managers.
Good luck in your negotiation.

Spanky

 

[Spanky]

1. Ask them to make an offer, they'll lowball by about 15% I expect. Nogotiate up by 10% (they win, you win).

This seems to be a prudent strategy. I will relate this to my wife since she is now in a contract position and the company is considering to offer a position. This position has just been downgraded to a lower level after she expressed an interest in the position. I think they (the company) know how much she is making and lower the postion as an attempt to save money (or to lowball).

 

[tryan]

I think they (the company) know how much she is making and lower the postion as an attempt to save money (or to lowball).

This is always a problem ... which is why the cardinal rule is : never disclose your salary (or salary requirements) and let them offer first.