[August UPDATE] I need your wisdom ATOT: my client wants to convert me into the full time hire.

[Zeze]

[August 2, 2017 Update ]
I spoke to my client manager for the third time today. I can't believe it's been a month already. It looks like the motion is in place for me to convert. I told him I wanted to tread carefully because I'm essentially agreeing to be poached and if this doesn't work out, I'll forever be branded as the guy who tried to leave the firm but couldn't.

He understood. He pointed me to another client manager for the conversion process. I have a call with him tomorrow to see what that is. It looks like the client leadership will be reaching out to my firm managers. So I figured it's best for me to break the news first to them. So I also spoke to my firm manager afterward today.

I basically told him, I could've waited until I had the offer letter in hand, but I wanted to give the firm heads up. I gave him a spiel about the pros & cons of below (in OP). He understood.

So I guess both parties know. Now, I just need the conversion and offer letter to be in my hands. I'm nervous- what if they screw me and lowball me?

The client knows how much they're getting charged for my work. But they probably don't know how much the firm actually pays me and pockets the rest. I'll be happy if they can at least match my current compensation.

I'll keep you posted...

------ OP below on July 7, 2017--------

I guess I'm primarily just venting out because this is a good headache. Long story short, the client really likes me and they want to convert me to join their side.

1. COMPENSATION:

My current consulting firm:
+ Their model is treating their consultants as their employees. They provide salary & full benefits. They actually have an amazing insurance (no deductible, 100% coverage). If I get benched, they still pay my full salary until they find me another account.
+ I can charge overtime to this client. This is a considerable amount (about +10%) I'll lose.

If I join my client:
- I have no idea about their compensation yet. This is to come next week or two. I'm actually skeptical they can match or exceed + OT I'm getting from them. TBD.
- From my client employee friends, I know their insurance sucks. Not looking forward to this. Looks like PTO will be similar between two (3-4 weeks).


2. STABILITY:

My current consulting firm:
+ Their model is to find local talents for local clients. So I can say for sure that I won't be traveling out of state. Location is pretty stable.
- They have been growing fast, but seem to be having trouble landing other accounts- lots of eggs in this client. Theoretically if the client decides to scale back (which happened before), we have to find someone else and that will change my work commute, entirely new corp culture, etc.

If I join my client:
+ I will now know for sure my current commute and office location will be exactly the same 100%.
+ I no longer worry about moving to different accounts, as I'm now the company which is one of the stable pharma giant. This is good.


3. WORK CULTURE:

My current consulting firm:
- Culture is same as the client's because I'm there. This client allows me to WFH 1-2x a week. This is simply amazing for my wife & infant kids. IF the firm decides to place me else where, then I'm subject to that client all over again. So that's not good.
+ Also does not exceed 40 hrs, esp at my compensation. And I can charge every hour for overtime.

If I join my client:
+ This current culture I mentioned above, I know I'll get to enjoy it indefinitely until I decide to change my job in the future. Huge plus.


4. CAREER GROWTH

My current consulting firm:
- Not much growth. The only way I can make significant salary or promotion jump is if I become an Engagement Manager for 250K/yr~. But based on my local team, there are about 2-3 people ahead of me. As I mentioned, they're slow in securing new local accounts, so this is a long away off.

If I join my client:
+ This is a huge pharma giant, slow to steer. I know I also won't make fast rapid upward movement. All the senior managers (not even directors) I see are pretty old (late 40s/early 50s). I don't want to wait that long only to make just 30-40% more. That being said, it's better than my firm's outlook. I can make smaller incremental advances in this huge company. I can also leave 3-7 yrs for a bigger growth company, but that applies to both cases here.


Questions:
1. The big missing chunk is the offer I'll receive and its amount. I'm very skeptical they'll meet my current $$ for my role. What are your experiences in conversions- are they usually more or less? Aren't they usually less to save costs in contracting?

2. I really want to keep my firm in the dark, because if the negotiation doesn't work out and I end up staying in the firm, I'll be forever branded as the guy who tried to leave. The employee who interviewed me said he HAS to disclose to my firm manager that the conversation is taking place. So I cannot avoid this. Any tips on this maneuvering?

3. Any general tips for people who converted? I know they move pretty fast because they're hiring you because they like you already and saw your work results.

 

[FeuerFrei]

Isn't there something you signed when hired that precludes you from jumping ship, directly to the client?
Who wants clients pilfering good personnel?

 

[Zeze]

Isn't there something you signed when hired that precludes you from jumping ship, directly to the client?
Who wants clients pilfering good personnel?

There is a non compete but looks like both CEOs had a convo and my firm may be receptive despite their official stance.

 

[dullard]

If your current company has any business sense, it upcharges for each employee. For example, if you are paid $50/hr, then your company should be billing the client something like $100/hr. This covers your benefits, but also your current company needs to profit from each and every employee. If not, they should not have you as an employee.

Thus, you have this profit as a negotiation tactic. Your client no longer has to pay this profit. It can go right into your pocket without any noticeable effect to the client. That is, unless your current company has a contract that says you can't be recruited without a substantial payment or similar penalty.

But mostly, I came here to say what too few people know. The day that you are offered a job is the day that the new company most desperately wants you. That is a very powerful hand. They really want you and you have proven yourself to them. Don't take what they offer at first. Negotiate, and negotiate hard. Otherwise they have to do a lengthy expensive search for someone else who likely will be inferior. This is the biggest Ace up your Sleeve that most people get in their life, and then they choose not to play it.

 

[Red Squirrel]

I had a similar situation years back, but in my case the client IT manager was an asshole, so for me the decision was easy, I stayed with my company.

Generally unless you feel working for the client offers better perks and better job security I would not jump ship. When you do that you're basically starting all over seniority wise. I just hit my 10th anniversary at my current company now and get 4 weeks of vacation. I'd hate to throw that way. It would need to be a VERY good job.

 

[Mayne]

all I can say is ...trust your gut instincts.

 

[s0me0nesmind1]

If your current company has any business sense, it upcharges for each employee. For example, if you are paid $50/hr, then your company should be billing the client something like $100/hr. This covers your benefits, but also your current company needs to profit from each and every employee. If not, they should not have you as an employee.

Thus, you have this profit as a negotiation tactic. Your client no longer has to pay this profit. It can go right into your pocket without any noticeable effect to the client. That is, unless your current company has a contract that says you can't be recruited without a substantial payment or similar penalty.

But mostly, I came here to say what too few people know. The day that you are offered a job is the day that the new company most desperately wants you. That is a very powerful hand. They really want you and you have proven yourself to them. Don't take what they offer at first. Negotiate, and negotiate hard. Otherwise they have to do a lengthy expensive search for someone else who likely will be inferior. This is the biggest Ace up your Sleeve that most people get in their life, and then they choose not to play it.

It's hard though when you like your current employer. I'm with consulting as well, we bill insane rates. I mean fucking insane rates. I had a job recruiter come specifically target me to fill a position, and I declined it specifically because my current company has been treating me very well. I've been on both sides of the playing field here - my first job was industry, my next 2 jobs were consulting. My current consulting company gives me 10%+ raises yearly along with a decent bonus, 5 weeks of vacation, and lots of good choices with benefits. Hell, I'm taking my paternity leave right now at 100% pay for up to 4 months. I wouldn't get that in the position I was offered.

What I like the most though - is moving. I hate a standard boring desk job with a 30+ minute commute. If the client was a 5 minute drive for me I would have jumped all over the position... but it's the standard 30-45 each way commute to downtown, and I'm sick of that game in life. They also aren't too fond of working from home either, another big downer for me. So with consulting - if a project sucks, or if I don't like working with a certain someone.. .that's okay... because there is a light at the end of the tunnel. Once a project ends, you won't have to deal with that asshole client or that dick project manager ever again. Plus as a bonus it's likely we will get a new experience such as a different industry to learn about or a new software to help implement.

 

[Zeze]

all I can say is ...trust your gut instincts.

My gut tells me to join. If the client is going through a top-down hiring directive of contractors, then it does not bode well for contractors that did not join. I think it's a matter of time before they're squeezed out & join another engagement. I should stay here and join them- of course the problem is how much the offer will be.

I'm just not convinced they'll pay this much for a salaried role of my position. I'm overpaid by 40%~ of glassdoor's NYC average of same title. This is not bragging, but a concern. I have to make sure I maintain my salary / cashflow. I REALLY hope they'll extend the offer to match it. I mean they must be paying through the nose of what my firm is charging them for my work.

If your current company has any business sense, it upcharges for each employee. For example, if you are paid $50/hr, then your company should be billing the client something like $100/hr. This covers your benefits, but also your current company needs to profit from each and every employee. If not, they should not have you as an employee.

Thus, you have this profit as a negotiation tactic. Your client no longer has to pay this profit. It can go right into your pocket without any noticeable effect to the client. That is, unless your current company has a contract that says you can't be recruited without a substantial payment or similar penalty....This is the biggest Ace up your Sleeve that most people get in their life, and then they choose not to play it.

Excellent points. You are right theoretically, but I'm just not convinced. The client is not some smaller company. They're huge and frankly, I'm not unique or that invaluable. I don't think they'll jump the hoops meet my leveraged position. I have a feeling they'll easily say, "well, ok then, we'll find someone else."

If I really wanted them to match my current benefits & awesome insurance & overtime = then I'd be asking closer to 200K. There's no way my position gets paid high 100Ks in my industry, even in NYC.

I guess we'll find out soon.

 

[Worthington]

I converted from a contractor to a FTE with my client. Same as you, they reached out to my consulting firm to bypass any possible non-competes. Honestly, it was a good/very-good move for me. I took a minor pay cut (although my case my insurance was crap with my firm) but the stability and other benefits more than compensated. And, I never have to worry about going into an office again as I'm WFH 100% of the time.

 

[Aharami]

You're going from uncertainty/instability to certainty/stability. Methinks you're gonna have to take a pay cut for that. But kudos to you if you manage to make that move while keeping your already inflated salary.

 

[Zeze]

Ugh not looking fwd to paycut

 

[s0me0nesmind1]

Ugh not looking fwd to paycut

If any client ever gives you a paycut - when they no longer have to pay the billing rate - they are completely fucking retarded. That is by the far the dumbest shit I would ever hear... I just can't imagine how that conversation would go....

"So, you want to hire me on because you like my work, but my firm's billing rate is very high?"
"Yes, also we want to pay you less than your previous firm was paying you"
"So what benefit does this provide me again?"

 

[Rumpltzer]

Ugh not looking fwd to paycut

I don't understand why you think you'd be getting a pay cut. It's not like your current employer is losing money on you. Every bit of what you get (including OT) is coming out of your client's pockets along with overhead to your current employer.

I imagine that the client is trying to retain the certainty of your talents and also trying to save some cash. If that's the case, you should still be able to get exactly what you already have plus a little more and the client would still be saving money bc they don't need to pay the overhead to your current company.

 

[RockinZ28]

Yeah should get a decent pay increase by cutting out the middleman. Friend did that last year and got near a 100% pay increase & better benefits.

Although, the client we're currently contracting for does pay their direct employees shit wages. Say they don't want to increase their employee's salaries for these field jobs, and then be stuck paying high bay area salaries when the next project is elsewhere or something. They're paying these guys less than 100k, while my company bills over 300k. Obviously no one is going to leave my company to join the client tho lol.

 

[holden j caufield]

lets say your company pays you $50/hr, and they charge the client $100/hr + $125 OT

To poach you I'd have to think the client has to pay some premium lump sum?

So between your 50 rate and the 100+ they are charged minus some finders fee for poaching you (minus some premium for stability) I would think is your pay rate you can negotiate (after factoring other benefits or negative benefits of ins. /retirement, vacation)

 

[Worthington]

ZeZe mentioned his firm takes good care of him but in a lot of cases (most?) the benefits provided by consulting firms aren't great, to say the least. If you're moving to a FTE position with a company that has good benefits that can easily make or break the deal. I think I lost something like $1 on my hourly rate (which at these salary levels is a percent or two). But adding in generous vacation time, matching 401k, bonus, cheaper insurance, etc more than made up for it.

I still do miss the OT though.

 

[sdifox]

General rule. If you like where you are, don't think of moving unless it is a 30+% raise.

 

[purbeast0]

I'd go with your gut in this case. I also don't see any reason you would get a pay cut. As for the benefits not being as good, put that into your negotiation. Tell them that at your current job you don't pay for benefits, so to jump you would need an additional X that would be used to cover the out of pocket for your insurance.

 

[Fritzo]

I went through something similar a few years back. Here's all I can tell you:

- Never go down in salary. If it's not at least a 10% increase, it's probably not worth it if your current company is stable and a decent place to work.
- If you need to pay for insurance, make sure that's added to your salary increase as well. The goal is to be working there making 10% more net.
- Check vacation time policies. I went from 5 weeks of at-will vacation to 2 weeks for the first 4 years, and only get a little over 8 hours a month to use. Hard to adjust.

 

[DaveSimmons]

If any client ever gives you a paycut - when they no longer have to pay the billing rate - they are completely fucking retarded. That is by the far the dumbest shit I would ever hear... I just can't imagine how that conversation would go....

"So, you want to hire me on because you like my work, but my firm's billing rate is very high?"
"Yes, also we want to pay you less than your previous firm was paying you"
"So what benefit does this provide me again?"

Exactly. If they pay you exactly what you make now then they have to be saving money even after paying benefits, since your current employer is making a profit paying you that salary + better benefits. They should offer you at least enough of a salary bump to cover the difference in insurance coverage and any difference in vacation time.

But that's applying logic. I've been out of the job market for awhile now since I'm happy and very well compensated where I am.

 

[Darwin333]

Ugh not looking fwd to paycut

Currently they pay your salary even if they don't have a project for you to work on, correct? So stability, at least as far as income is concerned, isn't really an issue. That leaves the convenience factor of staying with one company and possibly greater upwards mobility, which definitely has value. I would definitely see what their offer is but I'm not sure I'd be willing to take a 40% pay cut.

 

[s0me0nesmind1]

Currently they pay your salary even if they don't have a project for you to work on, correct? So stability, at least as far as income is concerned, isn't really an issue. That leaves the convenience factor of staying with one company and possibly greater upwards mobility, which definitely has value. I would definitely see what their offer is but I'm not sure I'd be willing to take a 40% pay cut.

Yes, while we do receive a salary even if we aren't on a project... that's not exactly a great advantage. I say that because where I work if you are on the bench for too long that is your ticket to getting fired.

We have yearly goals for client-based hours that we charge to our timecard - and our goal is absolutely ridiculous to be honest.

But anyhow, I consider moving from project to project to be an advantage. All it takes is having 1 boss/manager that is an asshole to throw that whole "stability" advantage you're talking about under the bus. At least I get to say at the end of the day "I don't have to deal with these idiots in 3 months"

 

[DaveSimmons]

Yes, while we do receive a salary even if we aren't on a project... that's not exactly a great advantage. I say that because where I work if you are on the bench for too long that is your ticket to getting fired.

We have yearly goals for client-based hours that we charge to our timecard - and our goal is absolutely ridiculous to be honest.

But anyhow, I consider moving from project to project to be an advantage. All it takes is having 1 boss/manager that is an asshole to throw that whole "stability" advantage you're talking about under the bus. At least I get to say at the end of the day "I don't have to deal with these idiots in 3 months"

Do you consider yourself above or below average compared to other developers at the contractor? If you're one of the better ones and you're fairly confident that your managers would agree then it's probably safe to stay even if the company loses this client.

If they want to stay in business long term and they're rational about it then they're going to want to keep their better employees if they need to trim staff.

 

[Zeze]

Update bump (in OP)

 

[s0me0nesmind1]

So wait... uhhh... you haven't agreed on a salary/compensation yet? Isn't that kinda important before you commit?