Have you been considering joining an organization as an employee rather than an independent contractor? Have you been thinking about approaching your current client about considering you as an employee?
We have developed a new tool called the T.I.E.S. Method (Time, Investment, Energy, Stress) and are offering an information packet that will help you learn how to observe the value that you bring to an organization. This info will help you put together a report as a touchpoint and communication piece that will exhibit your value. Make sure to grab a copy!
Today I want to talk about the trend of people who are working as independent contractors inside of companies who have the opportunity to move into an employee role. This shift is probably a byproduct of what we are seeing in the market and the economy, and the fact that being in business for yourself is more challenging as a whole.
Independent Contractor vs. Employee Roles
There are always challenges to both of these classifications. If you are looking to move into employment, I want to touch base about the value and the reality of being an independent contractor.
As an independent contractor, you set your own time, your scope of work, and your pay. One of the drawbacks is that you are responsible for holding back and paying your own taxes.
Why would someone want to move into an employee status? You are probably longing for consistency and stability. When you are working for someone else there is a sense of more security because you don’t have to do the marketing to find new clients. It is truly a ‘show up and do your job’ situation. There is consistency in your pay, and your client load isn’t going up and down based on what other people need.
Another great perk of moving into an employee role is paid vacation and benefits. Some companies may also offer fringe benefits in the form of additional days off or stipends.
If you are longing for these types of benefits, you may start to consider an employee role rather than an independent contractor role.
Considerations Before Transitioning From Contractor to Employee
Are you all in on the company?
When you are making these decisions, you need to consider if you are “all in” on the business. Do you align on their mission, vision, leadership, and the team? If you are already in the business as an independent contractor, you are one step ahead.
You are giving up your flexibility to step into something more consistent (which has its pros and cons).
“Am I in a place where I am ‘all in’… where I am invested, excited, energized, and I wake up wanting to do this work?”
Are you valued in the company?
Are you “all in” on the business, as well as the leader and the team? You need to make sure you are in a safe, two-way relationship in which you feel equal in the company and can freely give your feedback and be valued.
“Are you going to be excited about this and are you going to feel valued?”
Is there growth potential as an employee?
You also need to consider if there is growth potential in this company. Are you coming into a company in which you are going to be in the same position for a long time? Make sure you know that you are going to have enough variety, and that the scope of the work suits you.
As you are moving from an independent contractor to an employee, understand that you are moving from determining the scope of the work to the employer determining the scope.
Yes, you can still have boundaries… but know that the scope likely widens.
It means that you may be in a bigger role than you were as an independent contractor, especially if you weren’t working full time hours within that company previously.
What pay adjustments should you expect?
Regarding pay changes, as an independent contractor it is a rule of thumb that your pay is higher because you are responsible for paying your own taxes. As you make the jump from an independent contractor to an employee you may see a decrease in hourly pay because your employer is now paying your taxes. You will probably be making about the same, but you will clear more as an employee than you would as a contractor even though the gross fee is higher as an independent contractor.
What about exclusivity?
I want to encourage you to be clear and to have a conversation about exclusivity before you become an employee. You and the business owner need to be very clear if you are allowed to do additional work on the side as an independent contractor. Legally, just because you are an employee doesn’t mean you couldn’t have side projects, but you need to sit down with the business owner and explain what you would like to do, and negotiate it.
Can the business afford you as a full-time employee?
Another question to ask yourself is “can this business afford you in a full time capacity?” You are looking for security and safety. If you have access to the financials, determine if you think they can afford you in a full time capacity.
What about your intellectual property?
Something else to consider: your intellectual property is not yours when you are employed with somebody. It now becomes theirs. If you have been a service provider and have been toying with creating templates or teaching a course, there will be a conflict of interest if you are performing that exact same method and process as an employee inside of a company.
Are you willing to give up some flexibility?
One of the things that I find most challenging for people who have been independent contractors for a long time is the loss of flexibility. The employer is dictating your time and hours.
“How important is flexibility to you?”
This comes down to making sure you are working with someone you can have an honest conversation with. If you are partnering with a company and a leader with whom you share the same values, you can have the conversation about the value of flexibility. Ask the question: “What does flexibility look like inside of your company as an employee?”
“[Flexibility] is something we don’t talk about or ask about, yet we hold it as one of the most important things…”
If you are currently serving a client, and are proposing a move to full time, I want you to:
- Write out your job description
- Take 3-5 days and write down what you are doing in terms of tasks and how long they take
- What will the role look like in an expanded capacity?
- Include roles and responsibilities for present day vs. future
- Consider the impact you would make as an employee inside of the company
- They may approach you:
- Listen to this podcast again!
- Write down a list of questions
- Do the exercise above
- Get clarity and confirmation on what the future role will look like
- Are you going to be happy doing this future role for the next 18-24 months performing that role?
“If [you will be happy in this role] and you’re clear, and they’re clear, then you are setting yourself up to completely win…!”
Don’t forget to grab a copy of the T.I.E.S. Method!
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