Reply to: 3 Months into Contract - Offered Perm Role

[eek]

Wow, with a skin that thin, you really should delete your account and hand in your contractor card. With posters that are this toxic, we should probably have an auto-delete mechanism.

Regardless, based on your description, I don't know why you think you're outside IR35. Hey ho - I suppose that is for the supply chain above YourCo to regret and for you to check the T&Cs for clawbacks.

I'm getting to the point where I suspect a lot of "outside" IR35 contracts are based on substitution criteria that won't stand up in court and it would be safer to take the better paying inside contract.

[cojak]

It's outside IR35 confirmed by the agency, client, 3rd party solicitor, etc. I'm confident of that. I'm working as an independent consultant and the role is based on helping setup an IT division that doesn't currently exist. The permanent opportunity was when/if the division is set-up, there will be a need to 'staff it' and then BAU. As a result, there is no current roles which exist in the company that I would move into, so I can't benchmark against existing roles.

This forum is always so toxic. Quick to jump to conclusions, especially if the OP has under 10,000 posts and full of snide remarks. Deleting this account.

OP - you asked for advice and you received clear-eyed responses from professional contractors who are experienced in this area.

I will also point out that IR35 is based on working practices - the contract should reflect those working practices. The contract simply saying that the work is outside IR35 does not make it so.

As someone who has been in the same position as you, my outside status remained the same until I left the company at the end of the project. I knew that the moment that I moved to permanent, that would be the end of it.

So take this advice or leave it, it’s up to you. But I would advise putting some of that money away for a ‘rainy day’.

[TheDude]

So, I'm currently in month 3 of a 6 month contract and my client wants to know if I'll consider a permanent role. Now, this isn't a complete surprise since at the interview they said there would be "opportunities to also move to a permanent position later on." I was expecting I'd get at least 6-12 months out of the contract before this happened (currently outside IR35). We have a meeting to discuss this on Monday and while I'm happy working here and happy to stick around - I was hoping to get at least 6-12 months out of it before moving to perm and taking the anticipated pay-cut. So there's outstanding questions around how much they'll offer me but I'm just a bit surprised it happened so soon. I'm worried it's because they can no longer justify me working outside IR35 and can only offer a more BAU perm role going forward.

Anyway, I was wondering if anyone has had a similar experience and what can I expect on Monday? Do I get the opportunity to negotiate with them on the permanent role? (in which case, I'll be asking for a package which is way above market rates... but they are a global company). Or will they just give me an offer and it's a case of take it or leave it. Any advice on how to handle this conversation without souring the relationship would also be welcomed - at the very least, I want to make sure I'm still in there for the whole 6 months.

I have always turned perm offers down because:

1. I suspected I wouldn't appreciate the salary on offer.

2. Once a salary had been discussed then in my mind a line had been crossed that meant I either had to accept the offer or face likelihood I would not be renewed.

3. Even if the salary was pretty good it would be front loaded with the next few years pay rises and I would be watching rates rise elsewhere whilst my salary remained flat.

I was offered a position a few years ago after leaving a contract. I was on £600pd outside IR35. I was offered £120k plus bonus and declined.

[TheDude]

Contractors aren't actually worth as much as they think - and some are worth rather less...

Absolutely.

In my experience as a contractor the least competent tend to be those who drop hints about their income, large purchases, property portfolio and make quips such as 'every day is bonus day'

It's as if they justify their presence by how much they net rather than how much they contribute.

[jayn200]

Contractors aren't actually worth as much as they think - and some are worth rather less...

Put it this way - a permie is engaged for the long term and is valued on their likely contribution to the company as a whole, contractors are hired to deliver stuff quickly and cheaply. You can afford a high rate for a contractor for a short term gig, or to fill a short term need, but as a permie they will only be worth market rate, which will include all the hidden extras and overheads.

So £150k for a replacement salary is, shall we say, somewhat optimistic. Anyone outside senior management or on commission-related pay will be lucky to be on six figures.

Yeah I'm not sure what seniority level OP is at... but I mean most IT contractors posting on here are doing work that if given to a permie that person would probably be paid 50-90k range. Anyone that would get 150k as a perm salary is going to be on 1000+ day rates... and thats like less than 1% of the contract market... basically reserved for interim senior management and maybe a few highly highly skilled niche architect type roles.

[jamesbrown]

This forum is always so toxic. Quick to jump to conclusions, especially if the OP has under 10,000 posts and full of snide remarks. Deleting this account.

Wow, with a skin that thin, you really should delete your account and hand in your contractor card. With posters that are this toxic, we should probably have an auto-delete mechanism.

Regardless, based on your description, I don't know why you think you're outside IR35. Hey ho - I suppose that is for the supply chain above YourCo to regret and for you to check the T&Cs for clawbacks.

[northernladuk]

On what basis is the contract outside IR35 - because I suspect your client has just utterly screwed up the entirety of the premise that made it "outside".

Absolutely which was also LM's point that the OP appears to have taken umbrage with. Doubt we will find out now.

[eek]

It's outside IR35 confirmed by the agency, client, 3rd party solicitor, etc. I'm confident of that. I'm working as an independent consultant and the role is based on helping setup an IT division that doesn't currently exist. The permanent opportunity was when/if the division is set-up, there will be a need to 'staff it' and then BAU. As a result, there is no current roles which exist in the company that I would move into, so I can't benchmark against existing roles.

This forum is always so toxic. Quick to jump to conclusions, especially if the OP has under 10,000 posts and full of snide remarks. Deleting this account.

On what basis is the contract outside IR35 - because I suspect your client has just utterly screwed up the entirety of the premise that made it "outside".

[Lance]

Contractors aren't actually worth as much as they think - and some are worth rather less...

Put it this way - a permie is engaged for the long term and is valued on their likely contribution to the company as a whole, contractors are hired to deliver stuff quickly and cheaply. You can afford a high rate for a contractor for a short term gig, or to fill a short term need, but as a permie they will only be worth market rate, which will include all the hidden extras and overheads.

So £150k for a replacement salary is, shall we say, somewhat optimistic. Anyone outside senior management or on commission-related pay will be lucky to be on six figures.

Agreed.
I'm not sure why a company would make an offer like this to a contractor (who'd likely jump ship within a year or two at the most).
Nor why a contractor would change unless he had no other work (see note above about jumping ship at earliest convenience).

So if the individual isn't worth that much then why bother? Better to find a proper permie who might hang around for several years.

[malvolio]

which is sort of my point. They really need to want you otherwise why bother?

If I was offered £80k-£90k (on paper what I could get if I was just a permie), I'd have to say no. What benefit would there be for me? What benefit would there be for the company (they could just go to the normal permie market and get someone who'd be more permie-minded)?

Contractors aren't actually worth as much as they think - and some are worth rather less...

Put it this way - a permie is engaged for the long term and is valued on their likely contribution to the company as a whole, contractors are hired to deliver stuff quickly and cheaply. You can afford a high rate for a contractor for a short term gig, or to fill a short term need, but as a permie they will only be worth market rate, which will include all the hidden extras and overheads.

So £150k for a replacement salary is, shall we say, somewhat optimistic. Anyone outside senior management or on commission-related pay will be lucky to be on six figures.

[Lance]

I think that's way over the top. I can't imagine the perms are getting paid anywhere near that. No one is good enough to be paying probably over twice the going rate. Highly unlikely they'll get that signed off and if they did if word got out one guy is on that much there will be a mutiny.

which is sort of my point. They really need to want you otherwise why bother?

If I was offered £80k-£90k (on paper what I could get if I was just a permie), I'd have to say no. What benefit would there be for me? What benefit would there be for the company (they could just go to the normal permie market and get someone who'd be more permie-minded)?

[northernladuk]

And whatever salary they offer should be over £150k IMO if they are serious about the person and not just filling a role.

I think that's way over the top. I can't imagine the perms are getting paid anywhere near that. No one is good enough to be paying probably over twice the going rate. Highly unlikely they'll get that signed off and if they did if word got out one guy is on that much there will be a mutiny.

I think the OP is in for an unexpected surprise here. It's not going to last nearly as long as he was hoping and the rate is going to be much lower than he expects. His surprise at the situation and having to ask what to do indicates to me he's on the backfoot. If he was the top of his game and worth way above market prices he wouldn't be having to ask if you get me.

[Lance]

I'd probably just tell them you're happy being a contractor and you would love to complete the work you started on as you enjoy the environment, work and think it would be more efficient than getting someone else in to complete it.

Then sit back and see what they try and offer you to take perm role. Probably be better than if you try and show excitement in going perm.

Everyone knows why people work as contractors. It's not a secret. You have a few people who like to play the game and try and pretend like it's not about the money.

And everything is negotiable and you're in a great position to negotiate since you've established you're competent (assuming so since they are offering you a perm job after working with you) you are making more money than they'll offer you and their competitors will offer you more money. All of that puts you in a strong position because it's easy to walk away... And you probably will have to walk away unless you enjoy working for 3-4k a month.

I agree with this ^^^^^^

If a client/employer wants a contractor to become perm they have to have more to offer than just money. Job security, pension, sick pay etc. don't mean much to a contractor who has already accepted these risks (unless the contractor is ill).

Shares are usually a good start (not share options. Shares).
A good position in a company with the likelihood of large growth is another thing to tempt a contractor.
And whatever salary they offer should be over £150k IMO if they are serious about the person and not just filling a role.

[jayn200]

I'd probably just tell them you're happy being a contractor and you would love to complete the work you started on as you enjoy the environment, work and think it would be more efficient than getting someone else in to complete it.

Then sit back and see what they try and offer you to take perm role. Probably be better than if you try and show excitement in going perm.

Everyone knows why people work as contractors. It's not a secret. You have a few people who like to play the game and try and pretend like it's not about the money.

And everything is negotiable and you're in a great position to negotiate since you've established you're competent (assuming so since they are offering you a perm job after working with you) you are making more money than they'll offer you and their competitors will offer you more money. All of that puts you in a strong position because it's easy to walk away... And you probably will have to walk away unless you enjoy working for 3-4k a month.

[northernladuk]

And my thoughts on your post..

I was hoping to get at least 6-12 months out of it before moving to perm and taking the anticipated pay-cut.

Where did that come from? Did they quote those numbers or were you just hoping? My first thought is that is a very long time to be wasting money on a contractor when you can get a perm in. I think you've been a bit ambitious with your hopes. If they indicate a perm role in an interview I'd be expecting 3 months which is around a normal probation period and as soon as they are happy they switch to perm to save money.

Remember budget for headcount is assessed yearly. If they've got budget for a perm they can't wait 12 months as that budget will get taken off them.

So there's outstanding questions around how much they'll offer me but I'm just a bit surprised it happened so soon. I'm worried it's because they can no longer justify me working outside IR35 and can only offer a more BAU perm role going forward.

And you probably correct to worry because that's exactly what is happening. They want you in perm as soon as possible, definitely before next budget round. You've passed probation so why get you in ASAP? Why would they do anything else?