In part 1 of our talk with Executive Author, Jane Lin, we discussed the Best Secret to Finding Your Dream Job. Assuming you have a job offer, now what? Should you negotiate? We will have on average seven jobs in our life time. Knowing how to negotiate job offers and initial salary at each new job can means…
“Should I negotiate my salary?” This is a question we will ask ourselves every time we get a job offer, especially for a job we want. I recently had to go through this decision-making process, and I want to share my thoughts and what I learned with you. I think many of us…
Question: My current employer had enrolled me for a medical plan that is due to expire in 2 days. I start at my new employment end of this month. According to contract with new employer(the bank) that I have already signed, I will be on probation for first 3 months. Also according to that contract…
Many job seekers are considering doing contract work as an alternative to full time employment. It sometimes give us more flexibility and an ability to continue working that full time employment may not allow. When you do transition from full time employment to contract work, you will be paid by the hour instead of a…
In today’s tough job market, many companies are reducing their full time employment job openings which are paid by annual salary in order to save headcount cost and be able to adapt more quickly to changing market conditions. Instead companies are hiring more contractors who are paid by hourly rate and has a defined contract period (e.g. 6 – 18 months). As a result, many job seekers are also seeking contractor positions in addition to full time employment in order to increase their chances.
For these job seekers, a question naturally follows “What should be my hourly rate in a contract position?” The answer is it’s not as simple as converting your salary directly to an hourly rate. For example, if you make $80K in annual salary and works full time (which is about 2000 hours per year), does this mean your equivalent hourly rate converted from your salary should be ($80K/2K hours) $40/hr?
The answer is NO. If you only ask for $40/hr, you would have undersold yourself. This is because your hourly rate as a contractor should account for 3 factors that are different from a full time position who is paid a compensation package.
- Full time compensation package includes salary and benefits vs. hourly rate contract jobs do not have benefits – As a full time employee, your company will pay for the majority of your insurance premiums and the rest of the premium is paid with pretax dollars from your salary. In a contract situation, you are self employed and therefore would have to find your own health insurance. Individual health insurance cost at least 3 times more and has less coverage. Therefore, your hourly rate needs to account for that. The best scenario for you is if your spouse is a full time employee and you can get your health insurance there.
- Hourly rate contract jobs also incurs self-employment tax vs. full time employment do not – When you work as a contractor, you are considered self-employed and the government will charge you a 15% self employment tax in additional to other income taxes. Therefore, your hourly rate should be at least 15% more than your salary converted hourly rate. One way to offset the additional self employment tax is to deduct business expenses (e.g, computer used for contract work, % of your rent that is office space dedicated to working your contract, etc..) against your contract revenue. You should contact a tax consultant to find out all the legitimate business expenses you can deduct
- Down time cost between contracts– Contracts are typically from 6-18 months and many companies forces contractors to take a mandatory break after a set period to distinguish them from full time employees (e.g., must take 6 months off after contracting for 18 months at a company). Given contract job are typically shorter than full time employment, you need to account for that period between contracts where you are without income. To get around the mandatory break rule, you can always try to get a contract from another company during that time and switch between two or more companies to avoid any down time. To achieve this however requires you to network more and find work for yourself efficiently. In general, you have to look for contract work much more often than a full time job.
Therefore to convert your annual salary to an adequate hourly rate that takes into account the above 3 factors, you need to multiply your salary to hourly equivalent by a multiplier. This multiplier is somewhere between 1.5 to 2.5 depending on the industry and your skills in selling yourself into a contract. With the tough market, the multiplier is closer to 1.5 lately given there are many more people applying to contract work. With the example above, the salary hourly equivalent is $40 per hour. Adding the multiplier at 1.5, then the hourly rate you would want is at least $40 x 1.5 = $60 per hour to offset the risks and additional cost of working as a contractor.
I hope this helped. Best wishes in your job search and negotiations.
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Your comments: Did these tips help you figure out your fair hourly rate? I look forward to your comments below. Thanks. I am always in your corner.
Last week, we talked about Saying No at Work – When and Why to Do it. This week, I want to discuss how to say no at work. Being able to say no at work tactfully is an art form. You cannot just be blunt — how you say something is as important as what you want to say if you want to achieve the desired results. In this case, the desired result is for the requester to accept your no and feel okay with it. Here are 5 tips on how to say no at work gracefully:
- Be decisive – Don’t say yes and then say no. Nobody likes to be yanked around. Once you say yes, you can’t go back on your word. If you are not sure, say “can I get back to you? I want to make sure I can deliver what I promise before saying yes.”
- Stay positive – You want to start with something positive to soften the blow. Some phrases that may work are “I would love to work with you,” or “I am flattered that you asked me to help,” or “I would love to work on this problem with you.”
- Be reasonable – Offer a plausible business reason for saying no. “I am swamped with a xx deadline for a top priority company” is a good reason. “I don’t like this kind of work,” or “this work is not part of my job description,” are not good reasons.
- Be clear and offer alternatives – When saying no, offer alternatives so you help the requester find someone else to help. Some alternative can be:
- Push out the timeline – “Can it wait two weeks after I am done with…”
- Negotiate and reprioritze – “here is what I am working on now – can any of these be pushed so I can work on this?”
- Suggest someone else to ask for help: “If you need this done immediately, I can’t do it because of x y z, but perhaps person Y can help instead.”
- Circle back later – If your time clears up more next week, circle back with the requester to see if you can still help. Sometimes they will say yes, and sometimes they will have already found someone. Either way, this move will give you positive points for being proactive and helpful.
I hope these tips help. At the end of day, learning how to say no at work takes time and practice. Over time, you will find your own style of doing it gracefully and to everyone’s benefit.
Your comments: Share your experience of how to say no at work. Lesson learned? Do these tips above help? I look forward to your comments. I am always in your corner.
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Knowing why, when, and how to say no at work is essential to your career success and work life balance. We may not want to say no at work for fear of not being liked or worse – being fired. This is simply NOT TRUE especially when you learn how to say no tactfully. Before we can talk about how to say no, let’s get on the same page about why and when you should be saying no at work and how this can benefit both you and your employer.
Why Say No at Work – Here are 4 key benefits
- Protect your work reputation – Saying yes at work is not always good for you. If you said yes and then did a poor job because you had too much work then not only do you NOT get any credit for saying yes, but your reputation for doing quality work will be damaged.
- Maintain high productivity – Once you learn how to say no tactfully, saying no will lower your stress level and keep you balanced and productive for all the work you still have on your plate.
- Increase work enjoyment – It’s hard to enjoy work if you are constantly overwhelmed. By saying no sometimes, you can maintain a healthy work load and better enjoy the work you do.
- Respect for your word – By judiciously saying yes or no to extra work, you can build a reputation for being your word and avoid easily being dumped on. When you say yes, the work you return will be stellar. When you say no, you have a good reason and people will respect you regardless.
When to Say No at Work – While it’s absolutely okay to say no at work, you will have to do it selectively. It’s not healthy for you to say yes all the time, but it’s also career limiting if you said no all the time. Here are 6 key considerations to help you decide when you should say no. Remember there are benefits/consequences to saying yes or saying no. It’s up to you to decide based on your career aspiration, health condition, and goals in life.
- Level of experience – if you are young or have limited experience at your current job, then you may want to error on the side of saying yes most of time. It’s called paying up front to build a reputation for having a good attitude and willing to take on extra work.
- Quality – Can you complete this extra work at a high quality? Can you still deliver the other work you have at a high quality? Remember low quality work will affect your reputation even if you said yes.
- Stress Level – will taking on this extra work significant increase your stress level? Are you already overwhelmed at work? Having you burnt out will not help you or your employer
- Business reason – Do you have a good business reason for saying no? An example of a good business reason is that this work is dependent on another piece of work and that one is not completed yet. You should never turn down work for the sole reason that you don’t like the work or you don’t like the person requesting it.
- Frequency – Is this a one-time urgent request? If so, maybe saying yes is okay as it is temporary. But if this extra work is a frequent request, then consider it carefully and decide
- Requester – who is asking you to take on this extra work? Can their impression of you affect your work reputation? What is your reputation with this requester already? If they already think you are a “star” then they are more likely to accept a “no” if you have a good reason.
Stayed tuned for the next article on How to Say No at Work – 5 Tips.