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I recently received a job offer. I really love the company and am excited about the offer and they interviewed me 3 times over the course of a month before receiving the offer. However, coming from a contractor background and multiple senior level positions. The position offered is non-senior and I am offered about 55% what I previously earned as a contractor working full time.

My concern is the title change to non-senior and the pay rate is less than what I am worth (reflects junior payrate), and close to half of what I earned a year prior. They promised that good work is rewarded and there will be opportunities to advance, although they are not able to offer me a clear roadmap for advancement. Although, my goal up until now was to advance and grow, not move backwards and in some ways, I feel that what i'd be doing as my last 3-4 position were senior. Not sure what to do, or how I should negotiate.

Also, right now when asked what my previous salary was, I can show high numbers that reflect seniority in my previous role. If things don't work out with this job offer, on my next job hunt I will need to show junior level position and respond to the 'how much did you previously earn' question with low numbers, which I am concerned is a step backwards.

To conclude, I really like the company and would like to try to find a mutual win-win scenario.

I appreciate any advice.

closed as off-topic by DJClayworth, Masked Man, gnat, Zibbobz, Michael Durrant May 30 '15 at 13:51

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Questions asking for advice on what to do are not practical answerable questions (e.g. "what job should I take?", or "what skills should I learn?"). Questions should get answers explaining why and how to make a decision, not advice on what to do. For more information, click here." – DJClayworth, Masked Man, gnat, Zibbobz, Michael Durrant
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  • 15
    There is no way that we can tell whether taking a pay cut and reduced responsibility in order to get into a company you like is a good thing for you. Only you can decide. I would say that "good work is rewarded and there will be opportunities to advance" is what every recruiter says when trying to get someone to take a job at a lower level than they would like. – DJClayworth May 29 '15 at 14:13
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    Easy answer: Don't take the job then. Its a classic business con to talk about how great things will be in the future, rather than the present. – Mark Rogers May 29 '15 at 14:13
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    you would normally expect quiet a drop from contactor level pay to full time – Pepone May 29 '15 at 19:56
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    My understanding is that the typical translation from what a customer pays to what an employee takes home in salary is approximately halving the amount (customer pays $100k, employee takes home $50k - the rest being everything else in the company, from benefits to company profit), so 55% sounds about right, going from 1099 to W-2 (?) - that said, if the company is looking for a junior, they want to pay for a junior, not a senior, so... look elsewhere? – Code Jockey May 29 '15 at 20:36
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    Do not take the job. Apply to the position of your level. Different positions and different roles have different payments. – Salvador Dali May 29 '15 at 22:34
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Several years ago I had a similiar experience. I was offered a more interesting job in a more attractive appearing work environment at about 75% of my then current salary. The company offering me the new job said that once I proved myself, they would bring my salary up to what I had been making beforehand. Because the job offered looked much better and the benefits and commute were better, I took the new job. (Also, I was young and single, so taking such a chance didn't affect others financially; I could never do such a thing now, with family expenses being an issue.)

Overall, the job was more interesting, enjoyable, and rewarding. My co-workers were more pleasant and helpful. It was great to cut my commute from 3 hours per day to less than 30 minutes. I stayed there for several years.

That said, the company did not really honor their promise to bring my income back to what I had been getting before. I got great reviews and after a couple years was promoted. However, even with the promotion my annual raises were in the 4% to 6% range and it took 4 years to bring my salary back to the level it had been at the previous job.

That lower salary basis has followed me through subsequent jobs and continues to affect my income now. Thus, my advice to you is to say you are interested in and excited about the opportunity, but to decline the offer they've made and make a counter offer. This counter offer would provide you with an increase above your salary and also give you a title commensurate with what you currently have. If they can't at least match what you have now, tell them you're not interested in a backwards move and that you'd be interested in other opportunities that are more appropriate for you, should they arise.

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    If you took a 25% pay cut in exchange for a 2.5-hour reduction in your daily commute, I'd say you came out ahead, given an 8-hour work day. – Dan C May 29 '15 at 18:03
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    @DanC: That was how I thought too. – GreenMatt May 29 '15 at 18:34
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    Just my opinion, and I don't know what words were exchanged in your negotiation, but 4 years to get you back to the previous salary doesn't seem particularly unreasonable - though longer than you expected... that's how long it took to prove yourself to them, perhaps? thanks for sharing your experience, though! +1 – Code Jockey May 29 '15 at 20:29
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    Most companies cannot really justify big raises. The only time you'll see a significant shift is when you first get the job. Even promotions within a company will rarely see a big leap. You should not assume they will honor any such promise, unless you see it as a written contract. – Sobrique May 29 '15 at 20:31
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    @CodeJockey: 4 years is not unreasonable? In their minds it probably wasn't, but for me that was 4 years at a greatly reduced salary. When my pay finally matched what I had been making in the old job, inflation reduced the value by quite a lot. At that point I calculated what I'd have made at the old job, assuming similar raises, and the new job was still way under the old job. Obviously other benefits kept me at the new job. The point is to illustrate how you need to get what you're worth when you start a new job. – GreenMatt May 29 '15 at 21:00
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Never take a low starting salary, no matter what they say. I have never in 25 years of working for over 10 companies seen them move someone up the levels you are expecting. I made this mistake once too and the experience was great, and they were giving good raises to get me up, but I resented them for not being willing to fix the low starting pay issue faster.

Politely decline, stating you thought this was a higher level position, but you just can't accept the position as it is. If they want a counter, do some research and find out what the appropriate title and pay is for your area and counter with that. You won't make your contract rate, but in my experience you should make somewhere around 75% to 80% of what your raw contract rate (2000 hours times rate) was.

  • Why the downvote on this response? Can the downvoter please comment? – AnchovyLegend May 29 '15 at 14:16
  • I should add, that I took a $15k a year pay cut when I accepted the job I mentioned, and left for a $20k a year raise. I have not taken a job paying less (net, when factoring in benefits) in the almost 10 years since. – Bill Leeper May 29 '15 at 14:36
  • @BillLeaper, I am taking a way bigger pay cut from the year prior, coming from a contractor position. With that in mind, I currently don't have anything on the table. So I guess earning some, is better than earning none? – AnchovyLegend May 29 '15 at 14:38
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    @FreshyFresh just be careful, new employers always want to know how much you are making 'now' and taking a lower position could hurt you more than not working at all. The market is pretty hot right now, but the skillsets and locations vary. Use this down time to learn some marketable skills or look at the possibility of relocation, even a temporary relocation may be better than resetting your pay grade. – Bill Leeper May 30 '15 at 17:59
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You are moving from a contractor to an employee.

For many companies they charge their customers a rate of 2x the hourly rate they play employees. This covers 10 holidays, multiple weeks of vacation, sick leave, insurance, 401K matching, training, utilities, equipment, other overhead (time cards, billing,...), business development. None of these could you directly bill for as a contractor and had to build into your hourly rate.

When taking all those expenses and hours into account the 55% of your old rate might not be so bad. Of course if you don't use/need those benefits that will make it seem like a waste.

  • Most contractors never see their bill rate. Salary and bill rate for a contractor are not the same. You're thinking of an independent contractor which is very different. – Mr. Mascaro May 29 '15 at 17:52
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    +1, you can't directly compare your rate as a contractor to your rate as an employee, employees have access to company healthcare, retirement plans, etc. – Dan C May 29 '15 at 18:09
  • @Mr.Mascaro I believe the OP is saying they were an independent contractor. What you're describing is being employed by someone else who then contracts work. I would never describe myself as a contractor in that situation; I'd simply be an employee. – jpmc26 May 29 '15 at 23:57
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It doesn't seem like this is a good fit given your experience. Obviously this is a junior position and you are a senior. There is no negotiation in that case because a company isn't trying to pay for an expensive engineer. Apply for different companies.

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My concern is the title change to non-senior and the pay rate is less than what I am worth (reflects junior payrate),

Even if the company "can't afford to pay you more on this position" (can they ever? ☺), what they certainly can is to rename the title you are given (after all, it's just a name), so you can get them to make it better reflect what you are worth (eg. prepend a "Senior " there).

This has several implications:

  • It makes clearer that you are a senior being paid lower, rather than the usual junior developer.¹

  • Getting the raise later could thus be slightly easier, as you are not being moved to an higher category but adjusting the salary according to your category.

  • You can use it as an "evidence" to show on future interviews.

They may object that they can't put you in that category because they pay more to those, that the company "can't" do things that way… That's their problem. Your point is that they are contracting a senior², it's just that they would be paying a junior payrate (not that you shouldn't try to improve it, too). You can even offer that they add a paragraph in the contract mentioning that it is a temporarily lower payrate that will be augmented with the good work… That could bite them later (admitting on writing what they are so happily assuring you now), but makes you look reasonable, too.

¹ Even if this was crystal clear when you get cotnracted, it may need to be explained to management, the HR guy that knows it may no longer work there, etc.

² unless they somehow expect you to act dumber during work hours? :)

  • Agreed, Changing the title should be an easy compromise for the company compared to hitting the numbers – Toshinou Kyouko May 30 '15 at 8:31
  • Agreed. Otherwise, accept a junior pay rate and they will treat you like a junior, in all ways, including rapid-fire: not just failure to restore salary to appropriate levels. This is a major concern in itself. – user207421 May 30 '15 at 8:35
  • But the OP says the position, not just the title, is that of a junior role. When my team advertises for a junior role, we need someone in that junior role who will be happy doing the junior role tasks. We wouldn't just give someone the title of "Senior x" when we needed a "Junior x", we would expect people we hire for the junior role to be happy with the job, salary, title and opportunities for progression we could offer from that role. Not every employer will be like that of course, but plenty will be, e.g. govt. / education / large organisations can be quite rigidly structured. – Rob Moir May 31 '15 at 8:42
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From my experience as a CFO and HR Director, there are a few possible ways to proceed. If you really are excited about the job and feel that the experience it offers can improve your overall qualifications, then taking the job can be a move forward. When I look at qualifications, its not always the most recent job that drives my decision. Often I look at the overall experience and determine if the individual can add to our talent pool. So taking a lower level job can be a positive. However, I would also like to point out the length of time you spend in a job can effect your future, if I see an individual that was once in a senior position and then has taken a job at a lower level, I often wonder if the person was not able to function in a senior position, this is ofter confirmed if the new company does not promote the person within a reasonable time.

With regards to negotiating, taking a pay cut until you prove yourself can work in your favor, try to address the issue with the hiring company, request a review within 30 - 60 days, if possible get this in writing. It depends on how motivated your are about this job, if your job prospects are high then you can be a little firmer on your requests. You can also address it in such a manner that you would like to remain with the company for the long term and getting some assurances that your pay will be match to your talents quickly.

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