Contractor being made to go permanent

Velli

Hi all Im a new contractor thats been working for the past 15 months as a credit controller for a major supplier to big department stores in the UK. Each week Ive been submitting my timesheet through an Umbrella Company and getting paid the following week rinse and repeat. Obviously with everything going on with Covid the company decided to make some positions redundant and invest in an extra permanent credit controller (3 Permanent 4 soon to be). 

My day rate is £140 which translates to £125 before tax ie 32k per year. That includes sick pay and holiday pay as I havent taken neither in 15 months. 

I have a meeting scheduled in with the Finance Director this week to discuss being made permanent but I was just wondering what the salary number will be. The thing is I cant afford to go from £32k to below £30k based on my bills each month. Thats lowest my threshold to even just be able to get by & save a nominal £50 each month while I continue my studies in the evenings (Studying ACCA).

To provide further context the other credit controllers honestly barely do much and thats being generous. Many reports or day to day tasks that need to be run gets thrown my way because 

1). My colleagues who have been here for a few years more than I still dont know how to do them and is their 1st finance role despite being way older than me and are not tech savvy or even good with Excel.

2). Of the top 10 receivable accounts I have to manage 6 of them and whats funny is that everyone else has only 1 with the AR manager picking up the last 1. Also please bear in mind the accounts were totally poorly managed but now largely cleaned up due to endless hours and effort put into them. (Funny how motivating being paid more makes you overlook unfair uneven workloads). 

I think this is a big reason why the turn over of the position was 1 employee every 9 months for 3 years before I started but I knuckled down as the difference between going from 24k in my last role to 32k was too motivating. Also to be highly cynical i also believe the reason why the uneven workload is there is because the manager is very close and personal friends with the other three that she wants always wants to ensure their bonuses are protected at the cost of the temp in the corner working away who can be blamed and scapegoated.

3). Most importantly and my biggest achievement with this company is that my top account is £500k better off in the bad debt column than when I started 15 months ago and during the first 3 months of 2020 I would have upper management come to my desk to congratulate me out of the blue saying that my accounts were moving in the right direction.

Any advice or tips will be really appreciated as I would like to be as prepared as possible because any less than 30k would completely kill my motivation and its probably the worst time in a long while in the job market at the moment.

Thank you!

AskAsk

permanent pay is often less than contract pay so you may be offered less than the 32k.  it depends on whether the employer is paying an agency commission on top of your 32k.

try to negotiate it to 30k if they try to offer you less.  however, at the end of the day, it is whatever they want to offer.

Velli

AskAsk said:

permanent pay is often less than contract pay so you may be offered less than the 32k.  it depends on whether the employer is paying an agency commission on top of your 32k.

try to negotiate it to 30k if they try to offer you less.  however, at the end of the day, it is whatever they want to offer.

Im totally sure they would be. Ok can I ask just how difficult and annoying is it to hire and re-train staff? Id like to just to them 30k full stop and see how it goes.

Sandtree

AskAsk said:

permanent pay is often less than contract pay so you may be offered less than the 32k.  it depends on whether the employer is paying an agency commission on top of your 32k.

try to negotiate it to 30k if they try to offer you less.  however, at the end of the day, it is whatever they want to offer.

Being there 15 months already it may not apply but potentially they may have to pay the agency the standard perm finders fee if they take them on... I’ve certainly seen employer/agency agreements that can go up to 24 months before that fee is waived if they go perm.

To the OP - you mention a lot of stuff there but critically you dont mention what you believe your perm peers are earning nor what a credit controller in your location would typically earn. 

I’ve been offered the opportunity to go perm many times before and in each case have asked them to provide the salary they had in mind before going on with the conversation. You also need to consider not just the basic salary but any bonuses, profit shares or other cash elements to the reward package before deciding if its worth taking or finding another role. It may be they offer you more than £32 off the bat.

Potbellypig

Not sure what advice you want as it looks like you've got all your ducks in a row. Just remember that employers are in a good position right now with plenty of good people applying for jobs, regardless of how irreplaceable you may think you are. Ultimately, you set out your position and hope they agree, or there will have to be flexibility on your part. Good luck. 

TELLIT01

What you also need to consider is that the employer pays your tax and NI, plus sick pay and holidays.  They may also contribute to a pension scheme.  You may not have been off sick in the past 15 months but that doesn't mean you won't be sick in the future.

theoretica

You mention bonuses - worth seeing how they come into the remuneration package and how guaranteed they might be!  Also plan what your actions would be if they say the salary will be lower.  At what level would you take it (and job hunt?) rather than be left jobless at this stage?  How long til you get the ACCA - and what would your prospects be as already working for the company once you get it.

AskAsk

Velli said:

AskAsk said:

permanent pay is often less than contract pay so you may be offered less than the 32k.  it depends on whether the employer is paying an agency commission on top of your 32k.

try to negotiate it to 30k if they try to offer you less.  however, at the end of the day, it is whatever they want to offer.

Im totally sure they would be. Ok can I ask just how difficult and annoying is it to hire and re-train staff? Id like to just to them 30k full stop and see how it goes.

at my recent employer, the practice was to employ contract staff when they couldn't find permanent staff or when the project has a limited life span.  the contract staff would be asked to accept permanent contracts when their contracts run out if they were good enough to be kept on.

not everyone accepted as the permanent pay is a lot lower than contract pay, but the contract pay is a lot more than your 32k, so it was understandable that the permanent pay would be a lot lower.  it depends on how much permanent equivalent pay would be for your role, and that will be what they would be looking to offer you.

as someone had mentioned, there are a lot of people looking for work at the moment, so your negotiating power may be limited.  it is purely a financial decision, and looking for someone permanent to replace you may not involve the question of the inconvenience of training a new employee.

dlmcr

140 a day is nowhere near 32k, more like 26k.

I used to do contract (FTC) work and the daily rate is subject to all sorts of deductions which means you cant just multiply it up and compare with a perm salary.

Are you in IR35 or not? The fact they offered you a like for like role as perm suggests you are in.

https://www.contractorcalculator.co.uk/contractingtopermanentcalculator.aspx

General_Grant

dlmcr said:

140 a day is nowhere near 32k, more like 26k.

I used to do contract (FTC) work and the daily rate is subject to all sorts of deductions which means you cant just multiply it up and compare with a perm salary.

Are you in IR35 or not? The fact they offered you a like for like role as perm suggests you are in.

https://www.contractorcalculator.co.uk/contractingtopermanentcalculator.aspx

I think the £32K is reached by saying £140/day equates to £125/day once the umbrella company has taken its share.  Then they are working 5 days a week for 52 weeks in the year, having taken no holiday.  (I think that's what "That includes sick pay and holiday pay as I havent taken neither in 15 months. actually means.) 
If they really want to work 52 weeks in the year then they need to find some other work to do during their statutory holiday and make up any shortfall in income.

Dox

If you have a meeting with the FD, remember that an FD generally tends to be very busy - so for goodness sake don't start going on at length as you have in your post. Line up a few key achievements and outline them briskly and succinctly, with savings/benefits to the company which have been demonstrated. Don't waffle, don't repeat yourself - stick to the key points. If your daily rate is £140, it is highly unlikely the company is going to be paying £30K, since their calculations will not be based on someone working 5 days a week, 52 weeks of the year.

If the salary is lower than you are hoping for, have a back up plan such as whether they would be willing to sponsor your exams. Ultimately you aren't going to have much scope of negotiate unless you are going to be genuinely valuable to the company - but never forget you are more valuable before you agree to their terms. Once you've reluctantly said yes in desperation, you've lost any negotiating power you may have had.