Hi there,
I'm wanting to find out more about different employee and contractor
compensation systems, with a view to changing my current system if
there is a mutually fairer way to reward those who work for me. I am
currently running a 'virtual' I.T. consulting company in New Zealand,
where I go after various projects, and then engage contractors to
carry out work either at the client's location or at their own home. I
presently retain $20/hr or 1/6 of the charge out rate, whichever is
greater. I feel this reflects the fact that I provide no office space,
equipment or other benefits to these contractors. However, in the
interests of growing the firm, and eventually hiring some of these
contractors as employees (or even bringing them on as partners), I am
wanting to review alternative compensation systems. Specifically: what
percentage of chargeout rate should the company retain? How might this
change if I begin to provide additional benefits, office space or
equipment? If I employed someone full-time (on salary), what would
their salaried hourly rate be in relation to the chargeout rate. Note
- as an employee, they would be entitled to holiday pay, leave, etc.
Hopefully you can point me in the right direction!