Wednesday, April 23, 2008

Job News

Well, as most of you know, I've been on the same contract for just over two years now; and by rule, my contract can't be extended anymore.

The position was always intended as a contract to hire gig, but we've had three major re-orgs, including one total shakeup from COO to mailboy; and I personally have had six different "managers" in the 25 months I have been with the company. Because of this, the "to hire" part has been repeatedly put off.

Technically, they've been trying to convert me from contract to FTE since the first six month end date on my contract, but they could never get approval. In fact, they could never even get a grade assigned for me, which is first step of the "final stage" of getting approval as it were.

Of course, as with most large companies, your grade determines the salary range you're eligible for, as well as your benefits package etc...

Well, I just had that grading discussion with my boss, and it went VERY well.

There are six grading levels for my position, and I was intially brought in at a grade 5 equivalent, the second highest level. In the discussion with my boss, we both agreed with no argument, that I was actually at the highest grade, both by my job description, and by my job performance.

That makes a HUGE (as in $35,000) difference in salary range.

By rule, when you're first hired on FTE, they have to bring you in at the midpoint of the range or below; and it's a VERY broad range (as in a $160,000 difference between lowest base, and highest max), based on experience, performance, and the cost of living in your geographic area.

Broadly speaking, the Phoenix is right in the middle of their COLA regions. In fact, the mid-point of the range for my geographic area, is almost exactly the midpoint between the lowest base, and the highest max.

So anyway, basically they have to bring me in at between 5% and 10% below the midpoint for my region, or the justification fight is much harder. It just so happens, that was exactly what I was expecting, and I'm perfectly happy with it. Yes, it means about a $20,000 pay cut from my contract; but the vacation time and benefits are worth $20k.

What are the benefits? Roughly speaking, 15 days paid vacation to start, plus two additional days per year of service up to the maximum of 20 days, plus 6 federal and 5 company holidays, and two personal days per quarter; 401k with 100% matching, up to 6%; full family medical, dental, and optical, with HSA and FSA, and a 10% employee contribution; ESPP at 5% below market; and preferred credit terms with the company bank. Oh and all the little ancillaries that don't really matter to me like counsellings services, and employee resource centers and the like.

The good news in all that is that the TOP of my range, is about $40k above what I'm making now; and if I evaluate as a top performer (top 10% of employees at my level), which I would easily do, I can reach the top of that range in five years.

Oh and I'm in a grade with a 15% bonus; and in our worst year of the last 20 (last year as it happens) we still paid out 85% of our bonuses.

So, presuming I perform well, and the company performs well, it's no real pay cut at all, and within two years, I'll be making more than I do today even with no bonus whatsoever.

That's nice, because as a contractor you don't really get raises unless you renegotiate or change contracts. I was already at the top rate for contractors within the company, and because of the way the contract is structured, the contracting company wasn't going to take any less of that than they already were; so renegotiation was out, and to get a raise I'd have to change contracts.

Objectively speaking, I've been making less money every year, because of inflation. Now I'll be making more money each year; which is the way I think things should be wot?

Now, here's the fun part. My division is currently paying about $50,000 a year more than I make today to my contract company (actually technically I'm a sub contractor, to a contracting company, to a contract aggregator; so there are two hands in the pie above me), plus associated overhead.

The complication is, my division is a recoverable cost center, which means we charge out for my services to the rest of the company; and as a contractor they are required to recover 80% of my direct costs to the company, in cross charges.

The problem is, my position is so senior, and I do so much foundation level work which isn't recoverable to a specific project, that they're actually only recovering about 20% of my time right now. By hiring me on as an FTE, they are going to end up paying me directly, about $75,000 less than they are currently paying the contracting company; and they'll no longer have to recover that 80%, they only have to recover the actual time I spend on recoverable projects.

A typical employees salary is about 60% of their actual cost to an organization; but I telecommute, and don't have an office, which cuts the cost to the organization down even more.

So by hiring me, in absolute terms (including overhead) they'll at most, only be paying a few thousand more including benefits etc... (and I think in real terms it will be a few thousand less) for my services than they are today; and in budgetary terms they're going to take a budget hit of about 40% less.

This is the way the corporate world works folks. It makes no sense whatsoever to anyone but the bean counters.

At any rate, my boss is now sure he can proceed with getting final approval to convert me to FTE; and that the justification he presents should be sufficient to get approval. There's still the approval process and red tape to get through, but at least we're at the gates.