How Much Should My Pay Change if I Go Temp to Perm?

You’ve been working a temporary job and you just received an offer for a permanent position. That’s exciting news! So, how much should your pay change when you go from temp to perm?

The answer depends. The first step is to understand temporary pay rates. Let’s walk through the process.

How Does Temporary Pay Work?

Most temps contract through a staffing or employment agency. Therefore, they are employees of the agency NOT the place where they work. Agencies, in turn, charge companies a fee to borrow their workers. However, since staffing firms need to make money too, they don’t give 100% of that fee back to their temps. Instead, they use a portion to cover business expenses. These rates may range anywhere from 15% to 100%. For example, a given agency could have a 20% markup. If the temp is making $15, the company is paying $18, and the staffing firm is keeping $3.

Why Won’t Your Pay Automatically Equal the Staffing Rate?

This seems like wonderful news. Now instead of paying $15 to you and $3 to the staffing agency, the company can give all $18 to you. Unfortunately, it’s not that straightforward. There are three factors to consider:

Temp Pay Can Be Inflated

Since temporary and contract workers often are short-term, businesses may be willing to pay them at a higher rate. This especially is true if someone is a specialist. Think of this as a convenience fee.

Companies Usually Need to Buy Out Your Contract

If you’re a temp who’s been offered a permanent position, that’s fantastic for you and the company. The staffing firm, on the other hand, just lost a great employee. And they want to be paid for their loss. These conversion or buyout fees (covered by your new company) can be quite expensive.

Employee Benefits Are Expensive

When you worked for the staffing agency, they paid for your unemployment insurance plus any health and/or retirement benefits. Now, your new company needs to pick up the tab. Depending on the type of benefits package, this may be worth tens of thousands of dollars each year.

Add up your inflated short-term pay + conversion fees + benefits. Suddenly, you can see how the staffing agency’s rate could be too expensive. Additionally, you may not even be able to find out what the agency’s rate was. Some companies and staffing firms choose to keep this information confidential.

What Is a Reasonable Increase?

Of course, it IS fair for you to expect a raise. The question is, How much? Use these same tips for negotiating your pay at your temp job to get the best deal. Also, take the value of benefits into account. Sometimes, it makes sense to take a job with amazing benefits and OK pay over a job with no benefits and good pay.

Are You a Temp Who’s Hoping to Go Perm?

The recruiters at FirstStaff are here for you! Our recruiters help temporary employees find permanent jobs in Malvern, Arkansas and beyond. Learn more about the advantages of partnering with FirstStaff today!

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