Should I stay as a consultant or accept a full-time job?


Q. I’m going to have a chance to turn a consulting job into a full-time one by the end of the year. I know the company typically pays a smaller salary and offers bonuses, but the bonuses are not guaranteed. So I want a bigger salary and I think I would even forgo the bonuses just to guarantee my income. What should I do when it comes time to negotiate? What am I not thinking of?
— Unsure

A. This is an interesting decision to make.

There are pros and cons to being a consultant, just as there are to being a full-time employee.

It is not unusual for a company to want to tie some portion of compensation to performance in the form of a bonus, said Jim McCarthy, a certified financial planner with Directional Wealth Management in Rockaway.

He said it’s important to focus on the whole package, not just the salary.

“You should consider the other benefits you might receive as an employee,” McCarthy said. “Will you get company paid health insurance? Do they have a 401(k) with a match and/or a profit sharing plan? You should also consider how much of your current consulting income is `guaranteed’ versus a salary and bonus that isn’t guaranteed.”

McCarthy suggests that as you approach this negotiation, think about it from the company’s perspective.

“Said another way, if you were hiring someone to work in your consulting practice, how would you react if a potential employee requested a bigger salary in lieu of a bonus?” he said.

You should also consider what is most important to you, McCarthy said. Is moving from a consulting job to being a full-time employee really important? Or are you just looking to match the income you are currently getting from the consulting gig?

Finally, he said, consider your fallback position.

“What happens if you & the company can’t agree on the comp package? Does that jeopardize the consulting job?” he said.

Good luck with your decision.

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This story was originally published on March 15, 2023. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.