Q. I am working as consultant for a company and have been asked to join as an employee. How does the fee I receive as a consultant relate to the salary I would get as an employee?
A. The answer depends on two things: the way you’re currently charging the company; and the role you’re being asked to take on as a full-time employee.
First, there is the matter of expenses. Consultants typically work off site and are on company premises principally for meetings. Such consultants may charge their customers fees that cover overhead in addition to the fees for the services being performed. Consultants’ fees often include other out-of-pocket costs such as statutory and nonstatutory benefits they would derive if they worked for a company.
Some consultants work on the company premises using the company’s equipment, support staff, etc. in much the same way as a temporary employee. These consultants typically have a different fee structure to acknowledge their lower overhead costs, although they still incur some expenses (such as benefits).
When you go into a full-time role, you are selling the skill sets and experiences you bring to the job – nothing more, nothing less. Incidental costs are no longer an issue because the company will absorb them.
The second issue relates to whether you are moving into a role comparable to the one you held as a consultant. Sometimes the role the company wants the consultant to take on is broader in focus, and sometimes narrower. Consequently, the expectations of the role, and its value, can differ dramatically.
As you negotiate with the company – and let’s be clear: this is a negotiation – get them to clarify the role they expect you to fill. Ask for a job description. You may also want to ask the company whether there are other comparable roles in the company and whether these jobs would be considered peer jobs. Ask questions like, will you have supervisory responsibility? Having an understanding of other comparable jobs in the company tells you the scope and level of responsibility you’ll be expected to have once you join.
Once you have determined how your new role will fit into the company, you are in a much better position to drill down to the specific market in which the company operates and price your specific skills and experience using the Personal Salary Report. Armed with such research, you can then prepare for your negotiation.
Erisa Ojimba, Certified Compensation Professional