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Just got incredibly low balledSalary Negotiations 💲🤝 (self.antiwork)

submitted by kittynap415

I've been contracting for a company for the past 10 months. Everything has been rolling along nicely, they like me, I like them. I have several years experience in accounting, but I am getting experience in this role in a new industry. So, the work is engaging for now.

I currently make $36 an hour. I get insurance through the recruitment firm that I am contracted through. This company offered me $28 an hour to come on full-time. They want me to take a 22% salary cut to do the same work. I realized I have access to AP and can see how much they are paying my firm. $62 PER HOUR!!!

So, not only would they save money by just paying me the same, they want to undercut me to the tune of $16,000 a year to do the same job. I'll not be taking the role. I know they need me for this next month end, and they don't have anyone else to do the work. It's super disappointing. I thought I had found a good company to work for. Guess that's not a thing, and it's time to update the resume. Why are they always so greedy?

Edit to add: My contract ended 4 months ago. They are now just paying a weekly invoice. They are choosing to pay $62 an hour to a company than pay me a decent salary for the experience and knowledge I have. Plus, I already know the job. To get someone else, they would likely pay another firm a premium for at least 3 months.

Update: I told them how much I made at the temp agency and they matched. No argument or lower counter offer. I accepted the offer. I really hope no one in my department accepted an offer like that, though. I know I'm only in charge of me, but I would feel incredibly guilty if someone who's doing the sajob made them de substantially less than me.

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[–]StolenWishes 68 points69 points  (16 children)

Did you make a counteroffer?

[–]kittynap415[S] 101 points102 points  (11 children)

Not yet. Just got the offer today and I ended up working from home to check on my flu riddled boyfriend. It's a conversation I want to have in person. I just cannot believe people I like, who I have worked with for the last 10 months said to themselves, "Let's pay her the least possible to save the company a few bucks. We're perfectly willing to pay another business a premium for the exact same work. But her as a person, fuck her."

[–]shadow247 33 points34 points  (0 children)

Another company did the same shit to my wife...

She spent 3 months learning their system as a temp to hire through an agency...

When the 3 months was up, they offered her about 75 percent of what she was getting through the agency.....

She countered at 110 percent, after all they were paying the agency 150 percent of what they were paying her....

They did not renew her contract... the company actually folded a year or so later.... it was a hot mess with the Owner running Operations, and his Ex-wife running the Office and the books....he had his NEW wife working in the office too... what a mess...

[–]meothfulmode 76 points77 points  (0 children)

When I was a manager I was in a similar situation. I wanted to offer a contractor the same in salary they were getting as a cut from the agency. My boss pushed back by saying, "you need to advocate for the company more." Basically trying to low-ball them was me doing my duty to the company. 

I told him I wouldn't do that because I believed it was in the company's best interest to both pay an industry rate and act kindly towards this person who had done right by us constantly. 

Come performance review time I got docked for "not considering business interests sufficiently in their decision making." I was denied a promotion and then let go. 

You have to realize that capitalism is an ideology and plenty of people adopt gladly because it benefits their relationship with the hand that feeds them.

[–]breadlee94 33 points34 points  (1 child)

You have inside info. Don't squander that. If you can handle them in a professional capacity and have the info on what they are currently paying for you, use that to your advantage. Businesses will always try to underpay for you. If you want a company to pay you what you're worth, you'll always be disappointed. But you can counteroffer with something like: "considering how much you are currently paying for my services, I think it would be fair to pay me $45 per hour, 35 hour minimum per week regardless of how much i actually have to work, and [a generous vacation accruement plan]." Don't let how insulting this feels right now deter you from getting your bag and bettering your situation. And use your backroom info to get them over a barrel. Thats revenge enough. Also take into account that this isn't necessarily a reflection of how they see you. Many companies have internal procedures that these guys don't necessarily have control of. Not saying you haven't, just that it's worth considering in case.

[–]Swiggy1957 2 points3 points  (0 children)

Add into this that the company has already spent thousands on OPs training. Quick estimate says about $52,000. They've had 4 months to hire them. They've already squandered thousands they didn't need to. If the company wants to repeat the process, it's no skin off OPs nose.

[–]BakedBrie26[🍰] 11 points12 points  (0 children)

Countering is the way forward. In fact- they were willing to pay $62/hr. Seems like that should be your rate or at least something close to that.... but idk.

[–]Different-Horror-581 7 points8 points  (0 children)

Wait, you have a huge advantage here. You know that right now they spend 62. Have an interview with them where you confidently tell them all the things you can do for them and pick any number under 62.

[–]RuiHachimura08 11 points12 points  (2 children)

It’s not just the per hour rate. Your company is paying the temp agency more because your company don’t have to pay for any costs outside of your pay. If they take you in full time… just 3x your pay and that will be the all in cost to get you on board. This accounts for employee tax insurance, health insurance, etc. Not including the 10-20k they have to pay the temp agency for hiring you ft.

More of an fyi. You can downvote me now.

[–]Acinixys 7 points8 points  (0 children)

You are 100% correct, but fuck them?

Of they want her to stay, they can pay her a decent wage

[–]MystifiedByPeople 5 points6 points  (0 children)

Are you in the US? A quick Google suggests that 1.25 - 1.4 is a more reasonable multiplier, including SS, payroll taxes, and benefits. What are you including in that 3x?

(Or, possibly, what am I missing?)

[–]Lord_Lion 0 points1 point  (0 children)

Hit them with the numbers. I'm currently paid X, you offered Y, and I know you currently pay my company Z.

Now we can either negotiate in good faith from this moment on. And you can agree to pay me no less than 20% higher than X, or you can spend the next 3 months, and thousands of dollars in training to get someone who can't do the job half as well.

[–]Oni_K 13 points14 points  (2 children)

Obvious answer. You know what they're currently paying for you. Pitch them $50 an hour. You go up $12 an hour, they save $12 an hour. If you're not breaking any rules, tell them that you know what they currently pay for your services and you know that you're saving them money.

[–]GotenRocko 17 points18 points  (0 children)

Can't just look at the hourly number, if OP comes on full time they need to pay employer taxes and benefits which they don't pay now. Usually the contractor pay is more because they are factoring in that the person has to pay those costs themselves. So they may know what they are paying the contracting firm but that doesn't mean they will save $12 an hour with everything else factored in. At $50 for instance that's $4/hr they have to pay just for the employer share of FICA. So just take that into account when deciding what to counter with. Try to find out how good the benefits are for instance, the better they are the more they cost.

[–]eggcountant 8 points9 points  (0 children)

Benefits have a cost.  So consider that as well.

[–][deleted] 0 points1 point  (0 children)

I wouldn't.

[–]jdaboss4110 19 points20 points  (1 child)

This is how it normally works. You make a higher wage through a recruitment firm knowing that if you go on full time the COMPANY benefits are supposed to make up for that loss in income. Nowadays it doesn’t always seem to make sense financially as companies are becoming stingier with their Bennie’s package. But it is what it is.

[–]badgerj 10 points11 points  (0 children)

Yup this happened to me. Offered a salary with benefits instead of contract. Down pay but paid benefits and fired in 6 months.

Unless you can get 12 months guaranteed, I’d stick with your contract deal or feed it to them and tell them the burger is now $55/hr

[–]HereWeGo_Steelers 18 points19 points  (0 children)

They would not save much money by hiring you full-time unless they aren't going to give you PTO, 401k match, free life insurance, partial payment on health insurance premiums, yearly bonus or incentive, workers comp, and etc.

They pay higher for contract workers because they don't have to pay for all of the extra costs associated with full-time regular employees.

Pro tip, you can ask your contract house to increase your pay.

[–]RecklessCreature 10 points11 points  (1 child)

When I worked for Robert Half (temp agency) and found my purchase order and found out how they got the name Half (because whatever you’re paid is half what the company is paying them). For example, if you’re getting $31, they’re getting $62.

I got hired, but I am not getting paid what they paid the temp agency. It’s fucked.

[–]Gumberculeszoidberghere for the memes 4 points5 points  (0 children)

yup, totally.

Worked for a federal agency on behalf of a temp agency from 2006-2008 and got paid ~$8.3/hr.

The boss I worked for was a good guy and eventually showed me the invoice from the temp agency. The agency charged about $35/hr for me.

I asked him if he can hire me, I would even take less than half of what the agency charges. Unfortunately they had a hiring freeze and couldn't hire anyone due to cost cuts. But they had money for expensive temp agency workers.

What an irony.

[–]DetroitsGoingToWin 23 points24 points  (2 children)

Tell them you need $48/ hr for it to work on your end.

[–][deleted] 10 points11 points  (1 child)

Yup, assume 25-30% of the comp is benefits. So that 48 would be 70% of the amount they pay the contracting firm.

[–]tandyman8360lazy and proud 3 points4 points  (0 children)

Even with total comp, my employer is paying 30% less for me as a full employee than they were when I was contracting. But I got a raise.

[–]WrastleGuy 7 points8 points  (0 children)

They’re paying 62 an hour but they aren’t paying benefits and they have the ability to dump you without severance/unemployment.  

They would of course be better off paying you more but someone a couple levels above you would lose some of their bonus if they paid you more, which is why you’re getting lowballed.

[–]I_TRY_TO_BE_POSITIVESocDem 4 points5 points  (0 children)

ITT: Corporation attempts to monetarily fuck over their literal money person. What a world.

[–]c2thecrow 2 points3 points  (0 children)

Counter $40, had a similar situation. They accepted my counter. Always counter at least once.

[–]HairyPorknCheese 6 points7 points  (0 children)

Don't take it personal, it's just business.... Counter with $48/hr and settle around the $40-$42 range with an extra week of vacation than what they are currently offering... Easy peasy.

[–]Kind-Entry-7446 4 points5 points  (0 children)

if they are offering you full time WITH BENEFITS that's not an unreasonable offer. usually that costs about 20-40% of your salary. so if they offered you the exact same amount you are getting they'd be paying around $50 an hour for you.
I can understand how this is annoying but they best case you get the job and they make you train someone and your work load decreases.

another thing to consider is that your firm makes about $12 an hour on your labor in this situation.

all in with the right approach you can probably get them to offer you a bit more but take into consideration it will be full time instead of contract so you will have more money all year instead of more money some of the year.

[–]xEbolavirusSocDem 1 point2 points  (0 children)

Contract work will always pay more than getting hired full-time. This is how it always works. And the recruitment company always gets more than what you’re getting but it should never be more than 20%. If the recruiting company is getting more than 20%, they’re dirty and you shouldn’t be working with them.

[–]mr_molten 1 point2 points  (2 children)

I thought these recruitment firms made companies sign a contract saying they wouldn’t steal their workers. Am I wrong about that? Also, they may just be leaving room for negotiation with their first offer.

[–]kittynap415[S] 1 point2 points  (0 children)

My contact has been over for 4 months. It's now a week to week invoice.

[–]tandyman8360lazy and proud 1 point2 points  (0 children)

My current employer hires on contractors on a fairly frequent basis. I was told by a co-worker than someone they knew who became a full employee had to take a pay cut when they got the job. I remember that I low-balled myself when I was asked for salary requirements. Luckily for me, the pay scale put me at a rate that was 25% more than my contractor pay. Even then, they saved money by hiring me.

[–]rclouse 1 point2 points  (0 children)

Current job started out contract to hire. Finally got to the hire part and the salary was gonna be $15k less than the wage. I told my boss there's no way I'm taking a pay cut, he agreed. They came back with a bump up and I accepted.

[–]clantontann 1 point2 points  (0 children)

I'll probably get grief for this comment but fuck it. Your company pays the hiring firm $62/hour, but you also stated the firm pays your insurance currently? There's a trade off here. For them to hire you full time, they have to assume your PTO, insurance, retirement (if applicable), STD/LTD, and any other financial burdens with adding another employee to their company permanently.

Compensation and benefits is a package deal and not just the monetary agreement for work hours given. Now with that being said, I'm definitely not saying accept $28/hour, but because you see the AP information, negotiate with the $35/hour currently, and the other $27/hour to be utilized towards your other benefits package and whatever it entails. I don't think they're trying to make you feel bad or be ridiculous, they may have just discussed with HR the same things I mentioned and came up with a close equivalent value to get you from the firm full-time. The full numbers might not be as far off as you think, and a simple in-person professional discussion might make you feel a lot better or steer you away, either way, the ball is in your court.

Just, do what you think is right and fair and if not, agree to work for them through the firm as it is or find something else.

Edit: grammatical mistake

[–]Firm-Raspberry9181 1 point2 points  (0 children)

Not sure what your industry is, but in mine, an employed W2 position is always going to pay about 20-30% less than the exact same job as a 1099 contractor. This is typical, as the W2 job comes with health insurance and retirement benefits that the contractor has to buy themselves. The situation you describe with the agent is typical in my industry too. They skim a lot off the rate the company pays them - it’s the price the company must pay for the agent to bring them talent in a market marked by scarcity of workers. As for the offer you perceive as lowball - are you just looking at the hourly rate, or have you accounted for benefits too? Did you negotiate for a higher rate after the disappointing offer? The company wants a good deal for themselves ofc and may start negotiations with a low offer. It’s business, not a personal affront. If you maintain a collegial attitude and tell them you cannot accept the offer for less than X amount of money, and thank them for the experience of the last 10 months, you’re giving them an opening to reply with the offer you want. If you take the low offer as a personal insult, write them off as greedy and walk away, your ego may hurt your chances of landing a good job.

[–]ResponsibilityOk1964 1 point2 points  (0 children)

As many have said you have the inside intel which puts you in an incredibly powerful position, but bear in mind companies will always pay contractors more than salaried employees, you will not get the $62 an hour.

I would counter with $45, it’s a tidy pay rise and you get the additional benefit’s, the company cuts the cost and everyone is happy, if they knock you down, don’t accept anything below $40 and it’s still a win-win.

[–]AloneChapter 0 points1 point  (0 children)

Because they can.

[–]MadTownMich 0 points1 point  (1 child)

When companies hire you as an employee, they have to pay a lot of additional costs: unemployment insurance, workers comp insurance, social security taxes, health insurance, often a retirement contribution, usually life insurance, etc. So you really can’t expect the same hourly rate. You can counter, but I would not get mad about the offer.

[–]kittynap415[S] 0 points1 point  (0 children)

Which would make sense if they weren't paying an additional $26 an hour to a temp agency while not in a co tract. My contract ended four months ago. Even taking into account all you mentioned, it would be cheaper to hire me at the rate I am currently paid than to pay an additional $1,000 a week to an agency.

[–]pocketsquare22 0 points1 point  (0 children)

Just say no?

[–]mercurygreen 0 points1 point  (0 children)

Counter with twice your current rate.

[–]Adamaced 0 points1 point  (0 children)

  1. In corporate

  2. Get your EIN

  3. Give them the opportunity to retain your company for $X.

  4. Make it worth their while, and yours.

  5. They save money and don't have to pay ANY benefits.

  6. You get to be your own boss.

  7. You can bid on other contracts.

  8. Down the road, you become the owner and boss of your own bookkeeping firm.

[–]Mooseandagoose 0 points1 point  (0 children)

This happened to me. I took a contract to hire role (W2 with the contracting company) with the promise I’d be converted to FTE before 6 months. I wasn’t and there was no conversion date. It was finally offered to me at 60% of my contracted rate at 8 months and I said “I’d like to apply for the open role above this one”.

I did and turned out that role wasnt actually real. I went through a lengthy interview process and was ultimately offered my role at the salary for the role above me that didn’t exist. It was sooo slimy but I forced their hand and I have no regrets. I’m still there, the management ladder was largely forced out in 2020 and it’s been a pleasant experience since then.

ETA: the same VP contacted me when they moved companies and pulled the same bait and switch - asked me to interview for one role and then said budgets changed “but if you take this lower role and showcase your abilities, you’ll likely be recommended for a higher role if one opens!” No. I’m far too senior for this shit. Corporate politics aside, still NO.

[–]CautiousReason 0 points1 point  (0 children)

Remember they will try anything in the hopes you’ll just accept it but you can negotiate. I wouldn’t let this upset you. Be happy you know the actual numbers and call their bluff.

[–][deleted] 0 points1 point  (0 children)

They underestimated how much contracting company was paying. I’d counter with $42/hr. Let them know their offer was less than your current rate.

[–]MrJingleJangle 0 points1 point  (0 children)

That is not an unusual differential for a contractor through an agency.

[–]loudness788 0 points1 point  (0 children)

The negotiation should begin with why they think it’s a good idea to offer you less than you’re making now and whether or not they live on the same planet as you.

[–]hcth63g6g75g5 0 points1 point  (0 children)

Contractors should get paid more. You have no protection and no benefits. Salaried employees always make less. You get protections and retirement. That's the common business model. My business wanted to lower contractor pay, and every single person quit, and jobs didn't get filled for 12-18 months, and they couldn't figure out why. When they did fill it, no one met the technical requirements. They unwound an entire business productivity based on poor management practices who have no real world practical work experience. Just know when you step out of being a contractor, almost every salaried role will be lower.

[–]Boronore 0 points1 point  (0 children)

“I think you made a typo. You clearly meant $48 per hour?”

[–]LadyNiko 0 points1 point  (0 children)

Because if you're a contractor, the taxes go on the recruitment firm. They save money on taxes and can, quite possibly, claim that as a business expense.

[–]Konowl 0 points1 point  (0 children)

Depending on where you live, it will cost the company a lot more than 36 an hour to hire you so they might not be saving much money in the end and like your work. I’d counter offer with your current rate as it s a bit lowball (if you wanted to work there).