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I am running a small startup that requires a particular skill that has been hard to locate. We have been through 2 people with this skill, and have had unfortunate luck in recruiting the right person.

We found a contractor who a few months back had initially shown interest in the FT position, but we had already hired someone else. When that person was let go, we reached back out to this candidate and let them know about the situation. We discussed the salary we'd be able to offer (what they'd asked for).

They mentioned they'd like to try it out as a contractor for 3 weeks before making the decision – so we invited them to come in and work with us for 3 weeks. After the 3 weeks was over, I asked them whether they'd like to make it permanent – and they said the commute was very difficult and if I could consider 2 days of remote working if they came on board FT, which I agreed to.

However, they still wanted 2 weeks to try out this new arrangement before they made a final decision, and they asked if I would consider a raise of $5K in 9 months time (when the startup raises again). At the time, I agreed, but I really need to lock in the next FT hire we make for this position and I feel I've been way too generous.

Also, we've been approached by another excellent candidate who is coming in at much less ($10K). I would still like to work with this contractor, but I don't know how to approach this conversation. We have pushed for this contractor to join us as an employee (they're talented), but as is evident, they have been very non-committal and I feel we have been a bit railroaded.

How should I approach this situation? My goal is retain the contractor to work PT or as needed (even though I've pressed the FT for a month) and hire the new candidate.

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  • 4
    I'm unclear as to your goal. Are you saying you want to hire both people but feel that you have offered the contractor too much? Or that you would rather just hire the contractor if they were cheaper? Either way, I would suggest the fact that the contractor hasn't instantly accepted your offer indicates that (in their eyes) you've certainly not been "way too generous". I don't see a reasonable way to back out of that initial offer that doesn't instantly lose their interest. But again, it depends what your goal is, hire the best? or just hire someone ASAP? – delinear Aug 28 at 13:24
  • 21
    What is the actual problem then? You want to retain the contractor to work as needed? They want to remain on short term contracts? Seems like a perfect match? – Gregory Currie Aug 28 at 13:34
  • 1
    @Teapot - where are you located, and what industry is this for? – dan.m was user2321368 Aug 28 at 13:42
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    It is very unclear what outcome you want in your question. You should update your question to be clearer that you wish to retain DC as a contractor. – Gregory Currie Aug 28 at 13:45
  • 2
    "they have been very non-committal" - why would you expect a contractor to be committed to your company? Unlike you, they don't own a stake in the company, and they're used to companies only needing them for short periods. You're not offering them any long term benefit beyond a pay check. – Robin Bennett Aug 29 at 14:24
67

You don't mention where you are, nor what industry you are in, so it is very hard for me to understand the relative magnitude in cost between the two employees, that said...

You are looking to hire a person with a "particular skill that has been hard to locate". In fact, you've already been unsuccessful with two others that you've hired. Since then, you've found someone who apparently has the skills you need, and who wants to continue to work for you (assuming they choose FT employment after the two week period is up).

In exchange for agreeing to come work with you, they've asked for compensation, which includes the flexibility to work from home twice a week, and a raise in the future (it isn't clear percentage-wise how big a raise this is).

Only you can determine if the compensation asked for is worth it, but in my mind, a person who has the skills I need, who wants to work for me, when that skill has been really difficult to find, is worth their weight in gold.

  • They have already been working with us for 3 weeks and wants 2 more weeks to test out the new commute with remote working. – user108332 Aug 28 at 13:59
  • 42
    @Teapot - Would you rather he try it out for two weeks, or have him decide 3 months into it that the commute is unsustainable and quit. Nothing you've described to me so far makes him sound unreasonable, but of course, that is up to you. I think new managers/business owners don't always understand to be successful requires lots of compromise and give and take. They think they need to act like some TV show version of a "tough boss". Instead, focus on what is really important to your success. – dan.m was user2321368 Aug 28 at 14:04
  • @Teapot he is honest and reasonable. He is not sure if this arrangement would work. And he tells you this. He allows you to plan for this. What notice period would he have if he just accepted? If he just accepted, and then arrangement turned out unacceptable for him, you would keep him for some (2?) weeks + notice period. Is the uncertainty really worth it? – Mołot Aug 29 at 10:06
35

I don't see how you've been railroaded, the contractor clearly knows he is in a good position to negotiate, and doing just that! Can't blame a guy for trying, right? You can't agree to his terms with a chip on your shoulder though, either you are good with the arrangement, or not, otherwise he is going to detect the animosity down the road and likely leave as a result.

You say you've had difficulty in the past filling this role, so concerning the other cheaper candidate, who's to say they would even work out? If you need someone in this position now, I'd go with the guy you know has done good work for you in the past.

  • 4
    I'd have to add a word of warning that the OP can't just concede to every request/demand of this employee/contractor, but like you said, there's nothing so far that sounds unreasonable. If this person does decide to quit after 3 months, the OP has the other candidate to talk to at that point. Whether they are as good or not has only minimal consideration in this Question, since you don't want to dump a known good worker for someone completely unknown. – computercarguy Aug 28 at 21:58
25

Something that needs to be said here - This candidate seems to be going out of their way to be SURE that this job is a good fit for them, and potentially that they're a good fit for the job.

It may be frustrating, but would you rather they leave 6 months down the road and really railroad your business?

I actually appreciate the idea - They're trying it out, seeing what works for them, what doesn't (Commute), and they're genuinely trying to find a solution that will make them excited about working there.

I would expect that this person will be more satisfied with the position when they come on full time than someone who hadn't done all of this back and forth, and will likely stay a while.

At the very least, you know you have a candidate that's able to communicate potential isuses rather than bottle them up and get annoyed and leave last minute.

To me this consideration of what work environment the candidate is looking for, and what they'll need for that work environment to work for them, makes that candidate look like a stronger pick in my book. I would draw the line here though - You do need to make a decision and I can see how this would get annoying at this point... if after this next couple weeks they're not sure, I would go with someone else.

It's easy to decide not to bring a contractor on board; It's hard to fire someone who joins and then realizes they hate the job and does the bare minimum to get by without breaking any rules.

Also - 10k is not a large difference in pay / is not much less. 10k is a rounding error in most businesses, unless the person is in a helpdesk role.... and even then, it's.... Possible (though unlikely). It's uncommon to see someone, at the low enough pay scale where 10k matters, that puts that much thought into whether they'll be a good fit for a company or not.

20

I'm going to be just a bit harsh, here, but this needs to be said:

You need to understand that the relationship between employer and employee is supposed to be an EQUAL one. That is: The employer receives more benefit from the work done than they would from the cash it cost them, and the employee receives more benefit from the cash they earned than the time they spent.

You don't seem to see their side of the equation, and you seem to misunderstand yours. You are looking to spend less cash on an unknown new employee who you have not evaluated rather than work with the known quantity. So either you don't have a solid understanding of the value you intend to get from this work, or you don't understand that skilled labor costs money.

You aren't looking to fill a low-skilled job. You are looking for specific and competent knowledge. The known quantity is only asking to evaluate YOUR contributions to THEM. They find them insufficient, but not by much.

Swallow your belief that you're on a reality TV pawn shop show, and decide what this is worth to you. If you're a competent business at all, you should be able to triple your investment in skilled labor quite easily, so don't haggle over small stuff if it means you're going to risk your entire investment in the talent.

  • The relationship between employer and employee is almost never an equal one: On average there is a very strong imbalance of power. You meant to say that it should be beneficial to both sides. – einpoklum - reinstate Monica Aug 29 at 15:28
  • @einpoklum - No, that is not what I meant to say at all. I'd appreciate your not instructing me on what my position "actually is." – Wesley Long Aug 29 at 15:31
5

Since the role requires very specific skills, you would first need to ensure that the Excellent Candidate (EC) accepts your offer and joins you, before you talk to the Difficult Contractor (DC) about anything. This is because as the chief show-runner of the startup, you can not afford to spoil any relations.

Next, after EC has joined, be prepared with a list of items that you are ready to do to accommodate DC. This could include allowing full time remote, maintaining current status with conversion to FT role, providing them some other benefits like more vacation, or agreeing to the raise. Note that whatever you decide to do with DC can eventually affect behavior of EC as well (people talk, people observe), so think it through.

Once you've decided your limits, talk to DC about how him being non permanent is a problem for you, and that you want to have them continue as a committed team member. Do this softly, and try to understand their demands/needs/wishes. Check with your list if that is within your range or not. If yes, you convert them.

If not, convey to DC how you can not continue with the current arrangement. Check if they need any help from you while the notice period clauses are in force.

Say goodbye with a smile, just in case you need them some other day.

3

The contractor wanted to try-out. That goes both ways. If the contractor now misses out, that's the risk they took and you both agreed on. Whatever you do, don't start feeling sorry.

As you've said, you've been quite generous already. Your question reads as if you find yourself between a rock and a hard place, but the situation isn't even close to that.

Effectively you have 2 candidates. One of which you know a lot about, one of which you know less about. If you can't afford both, pick one. Either. The contractor didn't want to commit to you, now you're not committed to the contractor either. Consider them both.

1

As others have stated, good employees are worth their weight in gold. From an employer's point of view, especially as a new employer, it is hard not to feel that people are taking advantage of you (and some people will at times), but the greatest compass is opportunity cost:

  • What will it cost you to not have someone working on that project for a month or two or six?
  • If your new candidate doesn't work out/leaves how much does it cost you then? Will your product be completed anyway?
  • Will a delay result in you losing your timing in the market?
  • Will you run out of money before completing the product?

At the end of the day, a large part of business is about weighing the resources we spend vs the cost of not spending them at all/spending them somewhere else.

This doesn't mean of course that you should put yourself in a situation that you are not comfortable with. Simply be aware that people's time is valuable and they are entitled to negotiate in the same way you are entitled to agreeing or disagreeing to their demands.

Personally, I probably wouldn't hire this person (but only if I could afford not to hire them), because I prefer to work with people who really enjoy the work and thus have no trouble committing. If finishing the project on time however meant making or breaking the company, I would definitely hire them at any cost I could afford.

-15

You need to be more firm and set better boundaries/expectations with your employees.

This isn't a magical startup industry problem or even a job problem. It's a relationship problem, and their skill set is irrelevant to the power dynamic in your relationship.

The reason you are having problems with this person is because you conceded to everything they asked for(short of buying a set of knee-pads) and continue to do so. They will continue to expect everything they ask for, because you never gave them any push-back, and they will overreact when you refuse at this point. Move on to the next contractor, and try to set boundaries this time.

  • 14
    It interesting that you use the term "power dynamic". Both your comment and the OP's question seem to imply OP has/should have all the power, when in fact, given that he's hiring for a skill critical to his startup, and has been unsuccessful, the power rests with the contractor. To me, it seems like the contractor is being quite reasonable - wanting to make sure it is a good fit, asking for a (presumably) slight raise in a few months when the startup gets more funding. In a similar position, I'd be asking for a lot more. – dan.m was user2321368 Aug 28 at 13:47
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    I have, but I don't see how that is relevant. The OP needs something that's hard to get - he can either compensate someone for it, or decide he can do without, or keep searching. The free market balances both ways. The OP hasn't conceded to that much - the guy wanted a trial period, decided the commute was too long, came up with a solution that he thought might make it work (WFH 2 days a week) and wants to try that out. – dan.m was user2321368 Aug 28 at 13:58
  • The contractor has already been working with us for three weeks. They're asking for two more to test out the commute with remote working. At what point is this just dragging things out? – user108332 Aug 28 at 13:58
  • @dan.m I don't think an employer should have all of the power in the employee/employer relationship. That's ridiculous and ironically enough you are arguing that the employee should have all of the power. I believe that the employer is looking at the relationship from your perspective. My problem is that there was no push-back to any of the requests the employee made. – Skater-Boi Aug 28 at 14:00
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    I'm definitely not arguing that an employee should have all the power in a relationship. I'm saying that in this particular situation, the employee has a lot of power, and it seems (to me) that the employee isn't really demanding that much, given all the power he has. – dan.m was user2321368 Aug 28 at 14:13