Considering going permanent - how to go about salary negotiation

[insomniac]

Hi all,

I've been been contracting since I was made redundant from my previous job. I've been very lucky and have managed to pick three contracts in succession so haven't really been out of work since the redundancy.

However, I do think my good fortune in getting contracts is partially attributable to my prior permanent experience. For this reason, I'm keen on going back permanent. I'm a bit confused about salaries though. I want to keep my expectations firm but also realistic.

It's likely that the perm job will come with benefits such as paid time off, pension contribution, bonuses, etc (not to mention getting back-to-back contracts).

I do have a number in mind, but I was looking for a few pointers/tactics when translating contracting rates into a permanent salary? I've seen metrics such as hourly rate x 1000 or daily rate x 240, but they're not particularly useful from a negotiation/justification point of view.

One thing I was thinking of was perhaps the absolute haircut I would be willing to take on a gross salary basis.

Thank you.

[malvolio]

The permie to contract rate algorithm works both ways. Multiply your effective hourly rate by 1000 and you'll be fairly close to the equivalent salary. How that aligns to what the market will pay is another question of course.

[BlasterBates]

Yes you definitely want to look at market rates, i.e. checkout jobserve to see what salaries are on offer.

Then pitch a salary at several recruitment agencies. They earn a percentage of your salary so they're much more objective when acting as an agent than when they place you as contractor.

I don't find the multiples of contract rate particularly useful. What you want to know is how much you earn net. As a contractor you often have to factor in travel costs.

Just use tax calculators and calculate your net comparing to your net take home today, do rough calculations with 25 days holiday, and then factor in potentially 2 or 3 grand for health and pensions, which would depend on the company. Have to say I usually ignore those benefits.

[insomniac]

Thanks a lot, am doing a bit of research, salary suveys and running some numbers. As a rule of thumb, I'd like to consider these two:
- hourly rate x 1000
- daily rate x 240

How are they even approximately equivalent? This would imply 4.16 hours in a working day, but it's more likely double that (I think my contract says 8)?

Thanks.

[malvolio]

Thanks a lot, am doing a bit of research, salary suveys and running some numbers. As a rule of thumb, I'd like to consider these two:
- hourly rate x 1000
- daily rate x 240

How are they even approximately equivalent? This would imply 4.16 hours in a working day, but it's more likely double that (I think my contract says 8)?

Thanks.

Don't believe day rate * 240, that's rubbish. The 1000 one is also only a best guess answer as a comparator but it does try to allow for actual chargeable days, different tax regimes and overheads.

AS BB has said, research is the only real way to do it: the advantage of permie roles is that the market data is much more reliable. Use a site such as Jobstats and you will get some decent estimates.

[BolshieBastard]

Thanks a lot, am doing a bit of research, salary suveys and running some numbers. As a rule of thumb, I'd like to consider these two:
- hourly rate x 1000
- daily rate x 240

How are they even approximately equivalent? This would imply 4.16 hours in a working day, but it's more likely double that (I think my contract says 8)?

Thanks.

Forget that rubbish and any other formulae other might suggest.

You need to take into consideration what the permie job you're interested in is actually paying in the location you will be working.

Its all very well saying an algorithm 'goes both ways' (oh er missus) but the fact of the matter is, if you price yourself out of the local market you can forget a new permie job.

[stek]

The one time I went permie I discovered it wasn't about the bang per buck as it were, more about the endless faffing around with 1-2-1's, Straight-Talking, Cascade Meeting and RAGs....

Pound for pound it was worth it, £65k in Leeds is pretty good circa 2010, what's that, £250/day equiv? Now I'd take the £250 for same role, and not have the shiite, given a choice....

Actually I probably wouldn't....

[jamesbrown]

The one time I went permie I discovered it wasn't about the bang per buck as it were, more about the endless faffing around with 1-2-1's, Straight-Talking, Cascade Meeting and RAGs....

Indeed, the leap is more a mental one than financial. Avoiding all that mindless HR crap, corporate BS, and team-building nonsense is worth an awful lot of money in my book.

[SQLSwerver]

Sorry, there IS no argument to go permie.

I've been permie and it just doesn't add up. Sorry. No, not sorry.

It aint worth it, cut it how you like. A man deserves better than permie slave money.

[PurpleGorilla]

Sorry, there IS no argument to go permie.

Most permie roles force you to go managerial - to keep progressing up and getting higher wages. Getting well paid for tech only is quite hard. For me contracting allows me to do the technical work for decent money.

I'm not sure about the 1000th calculation. What I do know is that I wouldn't consider a permie job for less than £75k