Recently, I have been writing about transitioning from employee to independent contractor, or consultant. That is a significant trend that is here to stay. However, it goes both ways. This week a good friend approached me for advice about leaving her business to become an employee for one of her larger customers. It has been a very long time since she has been an employee, so she wanted to be sure that she was making the best decision, in the right way.
Before offering any advice, I asked her to give me the full background on her situation. She said that she has been working with this thirty-year-old company and has developed a good rapport with the owners. They like her project management style and think she can help them build their business. Now, they want her to join their team. She likes the opportunity but is uncertain as to how she should proceed.
My first question was to confirm that she enjoyed working with these folks and that mutual trust and respect is established. Secondly, I asked if she thought that their upside potential was greater than if she stayed focused on her business. When I got an affirmative response to each of those questions, I asked if she had received an offer letter documenting the terms of her employment. Silence. I was not surprised, as small companies usually hire new employees on a handshake. I explained the importance of an offer letter is to ensure that she fully understands the commitment required of her. I promised to send her a sample offer letter when we finished our call.
I would ask the following questions when negotiating an employment agreement. These are business-based, standard questions for anyone contemplating a new job.
1. What is my role and title with this company?
2. Who do I report to?
3. Will I have any direct reports?
4. What is my compensation, including incentives, and commissions?
5. What is my base salary, when and how is it paid?
6. What is the Commission program and how is it paid?
7. Expenses: what “qualified business expenses” will be reimbursed, including automobile mileage, corporate credit card, etc?
8. 401K: is one available, is there a corporate match, what is the vesting schedule?
9. Profit Sharing: is one available, am I considered eligible?
10. Health insurance: what carrier, what percentage does the company pay?
11. Is short term, long term, and disability available through the company?
12. Ancillary benefits: critical illness, auto / home, additional life insurance buy ups, etc.
13. Is there Paid Time Off? How does that program work?
14. What Holidays are observed?
15. How can I become a major contributor to this organization?
16. What are my opportunities to be considered for more senior management positions after meeting certain metrics?
17. Tools provided: Laptop computer, cell phone, etc.
Armed with this information, my friend was prepared for the next discussion with her prospective employer. He assured her that he would address all of her questions when they met again to finalize the deal, and he did.
If you don’t get a formal offer letter, you will still want to address these issues with your prospective employer. Write them down before your meeting to ensure that all of these questions are answered to your satisfaction. Make sure to leave enough space to take notes documenting your discussion. These notes will become your offer letter. When your conversation is finished, make a copy of your notes for your prospective employer to ensure that you are both on the same page.
In having this conversation with your potential new boss, you will learn about him as a leader and his decision-making skills. You will learn about the corporate culture as well as his vision to grow his company. More importantly, you will have documentation to help resolve issues as they arise. So, before making a commitment to start a new job, make sure the terms of your employment are documented.
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Jim Weber, President
New Century Dynamics Executive Search
Author of: Fighting Alligators: Job Search Strategy For The New Normal
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Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.
Jim Weber, President
New Century Dynamics Executive Search
Author of: Fighting Alligators: Job Search Strategy For The New Normal
2. Director of Business Development, Atlanta-based B2B Professional Services Company: New
3. Training Director – Southeastern-based Restaurant Group: New
4. Senior Accounting Manager – Atlanta-based Manufacturer. New
5. Controller – Orlando, FL-based Restaurant Company: New