Have anyone done contracting negotiations before? I've interviewed for co A & B and co A extended an offer today. The offer does not meet my current salary. Co B's interview structure is 3 rounds and I've finished my 2nd round today. The recruiter mentioned that since I am a contractor my current salary is incomparable as they will provide benefits, etc. Is this true? I have 2 yrs of contracting HR exp from fortunate 500 co’s & OMW to get my SHRM-CP. Appreciate your advice in advance.

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To compare a contract to salary position:

• Get both opportunities into the same units for wages—you can choose either hourly or salaried. That way, you can compare the wages directly.

• Determine whether the contractor position is a 1099 position or W-2 position so you can compare their wages.

If it’s a W-2 contract position, then you can basically compare the full-time and contractor positions directly because the employer is paying the same costs as they would if you worked for them full-time.

If your contractor position is 1099, then you’ll need to account for all of those additional costs that you’re responsible for as your own employer. In that case, a quick-and-dirty rule of thumb is you should add 50% to a W-2 wage to find its comparable 1099 wage.

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Per the above - I work in LA.

Don’t compare contract position with employment. You get job security, cash flow stability and benefits switching to W2.
Compare the comp they offer to the market.
And never accept initial offer, ask for more

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Agree with MD1 and I have seen offers pulled over asking for more money “just” to ask for more money. I don’t think that should be an across the board tactic, especially now where budget transparency is increased.

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I'm an agency recruiter that recruits both contract and FTE roles.

As one of the other posters mentioned it will be important to find out if it's a W-2 or 1099 role, but my guess is it with be W2 because a 1099 would not get benefits. If it's a 1099 it will also be important to understand the tax implications of being an independent. I saw that you were in CA and laws are particularly strict for employers in that state. Also, side note is the margins are much lower for recruiting firms on 1099s and LLC because of payroll taxes, back office expenses and so forth.

Typically I tell folks to take their salary, say 100K, divide it by 2080 (rough estimate 52 weeks/40 hours) to get their W-2 hourly rate which would be ~ $48.08/hr in this case and then mark-up by 20%-30% to make up for other benefits which would be ~62.50/hour. Many agencies offer benefits, but you should ask what they are because in most cases they are not nearly as robust as you'd get as a FTE.

Is it incomparable? It depends on what the rate they are offering is and how robust the benefits are. Can you negotiate? Maybe. I always like to make sure the person is comfortable with the contract rate up front. In many cases agency recruiters have more margin and can give you more, depends on how good your recruiter is and if they want you to stay on project and value a long-term relationship with you honestly. I prefer the latter. In some cases, especially when it comes to large companies the rates are more controlled and they simply don't have the margin to offer you more.

Hope that helps!

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Is the offer comparable with the market? If not, then ask for more. Also, you mentioned an entry level position which means you’ve applied below your experience level and will likely take a pay cut for this reason alone, even if you weren’t a contractor previously.

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