When should I negotiate a salary for a contract-to-hire offer?

Question

I am a graduating engineering student in the US. One of the positions I'm perusing is a contract-to-hire position, meaning that I'm will be an hourly employee with no benefits for a set period of time (in this case only a few months), after which the company would intend to hire me full time on salary with benefits.

The recruiter I have been in contact with informed me of the hourly rate and the salary they were offering. Both were completely reasonable offers given what I know about my industry and location, but I would like the chance to negotiate the salary to make sure it is competitive with other offers.

My question is, when should I bring this up? I'm new to contract-to-hire, and don't want to sound presumptuous by attempting to negotiate the salary without having even accepted the contract, but I'm also weary of accepting the contract term without knowing what they are really willing to offer me full-time (as opposed to just their starting number.)

Admittedly I will probably know more about the process later on in the pursuit of the position, but I want to make sure I don't miss something along the way. What is acceptable and professional in this circumstance?

Please note, this is neither a simple contract job, nor a straightforward full-time position; it is contract-to-hire, meaning I'm not officially hired when I sign the contract. I need advice relevant to the timeline involved in this specific type of hiring process.

Answer 1

As you go through the interview process, it's well worth asking lots of questions here. These would be my stages:

Before they offer you a position:

Ask all sorts of questions about the contract to permanent transition and not just salary, for example:

• What are the decision points for whether you will offer a permanent position?
• If the candidate doesn't meet the criteria, do you terminate or extend the probation?
• Will the company be amenable to negotiation of salary at that point, or will it all be fixed prior to start?
• What percentage of candidates have failed to make the transition? Can they give example of why?

In a contract to permanent situation, the company is treading cautiously - it can be very hard to fire a permanent employee, and much easier to fire a contractor, so the transition between these two phases is key to transition from something tenuous and slightly risky to something more committed and stable. I'm not saying it's bad or not to go for it - but realize that this is a trial period for both you and the company and it's really good to know as much as you can about this transition point.

When the offer comes from the company

I'm trying to delinate here between the quote from a recruiter and the formal offer from the company. A recruiter is usually given a very general baseline, and they are in no way empowered to wheel and deal prior to the interview process. Your better negotiating position is when the company has talked to you enough to have a sense that they want you to work for them.

At that point, you're free to talk both the hourly and the salary, with the caveat that if in the first steps of the process, they mention that you'd probably renegotiate the salary when the transition time comes, then you may get resistance since they want to see how you do before making any promises.

Answer 2

I was once in your same position as a contract to hire. I worked for the company for eight months, and then they opened up a full time position. The job description matched my resume completely. I did not get the job even though I had experience with the industry and the company. They hired a guy who they could pay less money. I was devastated because I moved for this company and did not get hired on full time. Just be aware of things like this so they do not happen to you.

Answer 3

In general, you (or sometimes they) bring up salary after you have at least got an in principle or verbal agreement that the company is going to hire you if you can agree on a number. This is normally at or after the point where the company contacts you to say "we're interested and we'll be sending out a contract / we want you to come in to sign a contract / how much do you want".

If they press you over the phone for a number and you're not mentally prepared to stand your ground, it's perfectly fine for you to ask for some time to evaluate the package they're offering and get back to them within a day.

The only trick for you might be the recruiter acting as a middleman, but in my experience this means very little - it actually takes the pressure off you as it's then the recruiter's job to take your counter-offer and reasoning back to the company along.

I would agree that this is a very good opportunity for you to practice your salary negotiation skills. You should read this article on salary negotiation for engineers, which has become an online bible of sorts.

Answer 4

Everytime a Contract goes up and a new one is on the table negotiations are expected. If you choose not to negotiate, that's your choice.

It's quite common that they will just push a contract at you and ask you to sign and go along with what they have. Any smart employer will do this, as negotiations mean more time focusing on people they already have.

If you have nothing to play in your favor for the contract period, you're welcome to wait until the full time position is open. But understand once you have locked yourself into a pay agreement with a company, increasing that number significantly is probably not the reality unless you have bulletproof reasoning. ie: low contract rate means low FTE rate (most likely).