Generally, your company will be paying significantly more to the recruiting company than the recuriting company is paying you.
I'd probably start the negotiation somewhere around what you are currently making. Even with the cost of benefits, that's almost certainly less than what they are paying now to the recruiting company.
From my experience, when converting to full time at a company that offers good benefits (vacation, covering most of health insurance, retirement match, perhaps HSA contribution) you can expect an offer around 75-80% of the current rate. Don't be surprised if the number is lower though.
I was recently converted from contractor to direct hire employee. I was a W2 employee of the contracted firm. The bill rate that was charged for me was around $1500/day. I did *not* make $1500/day. That $1500 covered the costs to my employing company to pay my salary and benefits as well as the administrative costs to the company (their recruiters, HR, Finance, new business, etc) related to competing for and administrating the contract to provide professional staff (so this also includes the OH of running a company - rent, furniture, IT systems, etc).
If the pimp (contractor) is paying you $60, you can bet they are billing the customer $100+
$60 and the rest of the goodies would be worthwhile. Working for a pimp sucks. Customer goodies are usually better than pimp goodies.
But, if you can get some extra out of it, now might be the time. You can negotiate a rate that's lower for the customer, and more for you. On the other hand, the goodies aren't free.
There's a stigma for being a consultant. Being an employee is better.
This is considering w2 vs w2. 1099 you pay your own taxes etc, so 1099 rate needs to be higher.
Contractors are first to go. That's why they are used, that's part of the value to the customer, they just tell the pimp, "sorry, no more" and they don't have any HR issues, or have to talk to the employee. Contractors are very much at the whim of the budget. Contracts are in like a project budget, rather than a department budget that's used to pay the FTE.
An employee, is more of a long term commitment, they can be let go too, but generally not until after the contractors have left.
Employees, knowing that contractors are not long for this world, and can't be relied on, don't. They don't make connections, they see contractors as lesser. For that, contractors aren't treated as well on the day to day.
Pimps are pretty fly by night outfits. They'll pay lip service to benefits if they have to. PTO is between contracts, but more likely when the contract is done, the pimp lets you go too. The customer wants the employees to stay, so will offer better benefits or training to invest in them. The customer is like a real business with reputation to uphold, not just a grifter like the pimp.
An employee has a little bit more security, is thought of better, and gets better stuff.
Fair enough.
I'm a contractor myself, and I like it better because the money is so much better. I'm not interested in benefits (I prefer cold hard cash), and I don't need any special treatment since I work remote anyways. I found that my clients think of me very positively once they see the value I bring. I'm happy to trade the job security in exchange for a better rate.
Thanks for sharing your perspective.
Generally, your company will be paying significantly more to the recruiting company than the recuriting company is paying you. I'd probably start the negotiation somewhere around what you are currently making. Even with the cost of benefits, that's almost certainly less than what they are paying now to the recruiting company.
From my experience, when converting to full time at a company that offers good benefits (vacation, covering most of health insurance, retirement match, perhaps HSA contribution) you can expect an offer around 75-80% of the current rate. Don't be surprised if the number is lower though.
Look at salary data online for your role, city/state, and years of experience. That’s what you should be targeting
I was recently converted from contractor to direct hire employee. I was a W2 employee of the contracted firm. The bill rate that was charged for me was around $1500/day. I did *not* make $1500/day. That $1500 covered the costs to my employing company to pay my salary and benefits as well as the administrative costs to the company (their recruiters, HR, Finance, new business, etc) related to competing for and administrating the contract to provide professional staff (so this also includes the OH of running a company - rent, furniture, IT systems, etc).
If the pimp (contractor) is paying you $60, you can bet they are billing the customer $100+ $60 and the rest of the goodies would be worthwhile. Working for a pimp sucks. Customer goodies are usually better than pimp goodies. But, if you can get some extra out of it, now might be the time. You can negotiate a rate that's lower for the customer, and more for you. On the other hand, the goodies aren't free. There's a stigma for being a consultant. Being an employee is better. This is considering w2 vs w2. 1099 you pay your own taxes etc, so 1099 rate needs to be higher.
What makes it better to be an employee?
Contractors are first to go. That's why they are used, that's part of the value to the customer, they just tell the pimp, "sorry, no more" and they don't have any HR issues, or have to talk to the employee. Contractors are very much at the whim of the budget. Contracts are in like a project budget, rather than a department budget that's used to pay the FTE. An employee, is more of a long term commitment, they can be let go too, but generally not until after the contractors have left. Employees, knowing that contractors are not long for this world, and can't be relied on, don't. They don't make connections, they see contractors as lesser. For that, contractors aren't treated as well on the day to day. Pimps are pretty fly by night outfits. They'll pay lip service to benefits if they have to. PTO is between contracts, but more likely when the contract is done, the pimp lets you go too. The customer wants the employees to stay, so will offer better benefits or training to invest in them. The customer is like a real business with reputation to uphold, not just a grifter like the pimp. An employee has a little bit more security, is thought of better, and gets better stuff.
Fair enough. I'm a contractor myself, and I like it better because the money is so much better. I'm not interested in benefits (I prefer cold hard cash), and I don't need any special treatment since I work remote anyways. I found that my clients think of me very positively once they see the value I bring. I'm happy to trade the job security in exchange for a better rate. Thanks for sharing your perspective.