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Home  > Article

What Contract Rates Can an Entry-Level Person Ask For?

By Erisa Ojimba

A recent graduate has finished a co-op program and has been offered the same job as a contractor. How should someone with very little experience approach setting a contract rate?

Q. I have been working for a company as a cooperative learning experience for eight months, even though I'm not a student but a recent graduate. (I needed the experience.) Now I am being offered a one-year contract, and have learned I am grossly underpaid. Can you give me some resources to justify not only my market value salary, but also what percentage health, 401(k), and vacation time adds to my base cash value? Since I will be a contractor, which adds risk, I feel this should be calculated into my total value as well as the out-of-pocket expenses I will pay without benefits. I feel I can negotiate with the proper resources.

A. You pose an interesting question. Contract rates are typically based on work conducted by seasoned employees. As an entry-level employee, you presumably lack the necessary skills to warrant a professional rate. I'm surprised that the company has made you this offer.

You're probably correct that you're not getting a competitive rate, but remember, you've only been on the job for eight months. Typically, a company would pay someone with less than a year's experience less than the market rate.

Ask the company if you could move to an entry-level position within the next year. More importantly, think about, and ask them about, your future with the company.

In the interim, you still need to pay for health insurance and take some time off. Ask the company if it would consider bringing you on as a regular employee or paying for your health insurance and other indirect compensation, which is about one-third of your current base pay.

When you talk to your HR representative, remember the company gave you an opportunity in the form of solid work experience. Remind the company that you appreciate the support it has given you in the past, but say you have worked hard enough to warrant a change in your classification from contract employee to regular employee.

Of course, now that you have some work experience behind you, you can start looking at other opportunities outside you current employer.

Good luck.

- Erisa Ojimba, Certified Compensation Professional

Copyright 2000-2004 ©, Inc.

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