The Ultimate Job Hunting Guidebook for Military Veterans
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About this ebook
The Ultimate Job Hunting Guidebook for Military Veterans is written by a military veteran for veterans.
Leaving the military and returning to the civilian workforce can be a daunting task, particularly if you've been in the military for quite a few years. We didn't have to worry about finding the job, crafting resumes, job interviews and negotiating our salaries. All of that peace of mind and security ended when we took off our military uniform and put on civvies again.
This guidebook restores much of that peace of mind and security to veterans once again by giving you all the information you need to be successful at finding the civilian job you want, writing winning resumes, being fully prepared and confident for job interviews, and effectively negotiating the highest possible salary.
- Find out where all the jobs are and how to apply for them.
- Learn the right ways to ask for the best salary and benefits.
- Discover the secrets to what makes a winning resume.
- Get an insider's look at what takes place in job interviews and how you should prepare to stand out above all the other candidates interviewing for the same job.
- Learn all the benefits and disadvantages of working in government jobs versus for private companies; or working as a company employee versus a contractor, and much more.
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The Ultimate Job Hunting Guidebook for Military Veterans - Frank McClain
About The Author
Frank McClain is a multi-award-winning author who graduated with a BS in Information Systems Management from the University of Maryland. He is a retired military veteran who served 20 years in the US Air Force both in the US and Europe. He lived and worked in Europe for over 12 years both as a US military member and as a civilian government contractor. He's worked over 15 years as an IT consultant in both US government and corporate jobs in the US and Europe.
Frank has extensive experience as a senior network engineer on IT production LAN, WAN and laboratory environments for many Fortune 500 companies and US government agencies. His experience includes researching, designing, drawing, documenting, procuring, configuring, installing, monitoring, troubleshooting and repairing a variety of networking components including routers, switches, firewalls, proxy web servers, multiplexers, modems, encryption gear and cabling.
Following are some of the US Department of Defense and other government agencies where Frank has either worked as a network engineer or provided IT support:
■ Air Force
■ Army
■ Navy
■ Marines
■ Air Force Space Command (AFSPC)
■ North American Aerospace Defense Command (NORAD)
■ Missile Defense Agency (MDA)
■ Defense Information Systems Agency (DISA)
■ National Geospatial Intelligence Agency (NGA)
■ Federal Bureau of Investigation (FBI)
■ Central Intelligence Agency (CIA)
■ National Security Agency (NSA)
Following are some of the European commercial service provider companies Frank has troubleshot networks with across Europe:
■ Deutsche Telekom
■ Telecom Italia
■ Spain Telefonica
Following are some of the US commercial companies and clients Frank has worked for as a network engineer:
■ Boeing
■ Lockheed Martin
■ SAIC
■ Northrop Grumman
■ Verizon
■ Computer Sciences Corporation
■ AECOM
■ Telecommunications Systems
■ Charter Communications
■ CenturyLink
■ ISYS Technologies
■ PDS Technical Services
■ NCI
■ Insight Global
■ SAP
Frank served in the US Air Force at the following locations:
Copyright © 2018 by Frank McClain
All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without prior written permission except in the case of brief quotations embodied in critical articles and reviews.
Publisher's Note. This publication is designed to provide accurate and authoritative information in regard to the subject matter. It is sold with the understanding that the publisher is not engaged in rendering professional career, legal, financial, psychological or health services. If expert assistance is required, the service of the appropriate professional should be sought.
Edited by Clarence Z. Seacrest
Cover design by Maxphotomaster
ISBN 978-0-9994790-7-0 (paperback)
ISBN 978-0-9994790-8-7 (ebook)
ISBN 978-0-9994790-9-4 (ebook)
Dedication
To my Lord and Savior Jesus Christ. Surely Your goodness, mercy and unfailing love have followed me all the days of my life. ~ Psalm 23
To my step-father, Balbino Rodriguez, a true American patriot who served our country in the US Navy for 27 years; served during World War II; and survived the bombing attack on Pearl Harbor. He was a Navy chef for President Franklin D. Roosevelt on the presidential yacht, the USS Potomac, while our country's 32nd president led our nation through World War II and out of the Great Depression. He was also a Navy chef for President Harry S. Truman on the presidential yacht, the USS Williamsburg, while the White House was undergoing extensive restoration; and while President Truman brought our nation out of World War II with a decisive victory, and through our nation's turbulent times of the Cold War and the Korean War. My step-dad remained a faithful and loving husband to my mother, Dolores, for 37 years until his death at 106 years of age. But above all of this, he was the best father a son could ever dream of having.
To the U.S. Air Force where I served 20 years in the greatest air force in the world. The Air Force taught me the value of sacrifice, hard work, commitment and service before self to our great country. It has been my highest honor to be a part of the greatest military in the world while serving our great country in the U.S. Air Force. Aim High!
ABOUT THE AUTHOR
DEDICATION
INTRODUCTION
CHAPTER ONE: Something for Every Job Seeker
Life is a Competition
The Warm-Up before the Competition
Employees and Contractors
Independent Contractors versus Dependent Contractors
Direct Hire, Contract-to-Hire or Contract
Direct Hire Worker
Contract-to-Hire Worker
Contract Worker
W-2, W-4, W-9, 1099 and Corp-to-Corp Tax Forms
Working under a W-2
Working under a W-4
Working under a 1099 or Corp-to-Corp (C2C)
Working under a 1099
Working under a Corp-to-Corp (C2C)
Using Tax Status as Leverage to Negotiate Your Salary with Staffing Agencies and Company Clients
Working Hours
Fair Labor Standards Act (FLSA) and the 40-Hour Workweek
Full-Time and Part-Time Hours
Wages for Alternative Working Hours
Using Odd Working Hours as Leverage to Increase Your Salary
Seasonal or Holiday Jobs
Ride the Wave of Seasonal Hiring
Catch the Holiday Wave of Hiring
Where to Look For Holiday Jobs
Dress for Success When Applying for Seasonal Jobs
Exempt versus Non-Exempt Employees
Using Overtime as Leverage to Increase your Salary
Salary Workers versus Hourly Workers
Salary Workers
Hourly Workers
Salary and Hourly Positions Offered by Recruiters
Company Benefits
Using Company Benefits as Leverage to Increase Your Salary
Business Travel
Pros to Business Travel
Cons to Business Travel
Living and Working Overseas
Take a Selfie in Europe
Expatriates
Foreign Earned Income Exclusion for Expatriates
Paying Income Tax to a Foreign Country
Pros to Living and Working Overseas
Cons to Living and Working Overseas
Resources for Finding Overseas Jobs and Living Overseas
Contractor Jobs in Austere, Danger/Hazard Overseas Areas
Not a Griswold's European Vacation
Defense Contractor Jobs in Austere, Danger/Hazard Areas
Salaries and Benefits of Defense Contractors Working in Austere, Danger/Hazard Locations
Hardship Pay for Working in Auster, Danger/Hazard Locations
Completion Bonus for Working in Auster, Danger/Hazard Locations
Using Leverage to Increase your Salary or Benefits for Austere, Danger/Hazard Overseas Locations
Living Quarters, Food and Services for Defense Contractors Working in Austere, Danger/Hazard Overseas Locations
Living Outside the Military Installation in Auster, Danger/Hazard Locations
Living Inside the Military Installation in Auster, Danger/Hazard Locations
Dining Facility and Other Services on the Military Installation
Staying Connected to Family and Friends While Deployed in Austere, Danger/Hazard Overseas Locations
Medical, Training, Equipment and Other Requirements for Contractors Headed to Austere, Danger/Hazard Locations
CONUS Replacement Center (CRC)
Lodging and Transportation at Fort Bliss, Texas
Meals at Fort Bliss, Texas
Medical, Dental and Physical Examination Requirements for CRC Processing
CRC Training Requirements
No Go
Rosters and Employer Communications at the CRC
Common Access Card (CAC)—Your Total Access Card
Equipment Issued to You at the CRC
Flights to Your Overseas Locations
Baggage Allowed for Your Flight to Your Overseas Location
Thank You Sir, May I Have Another?
US Training Center in Moyock, North Carolina
Lodging at the US Training Center
Meals at the US Training Center
Common Access Card (CAC)—Your Total Access Card
Baggage Allowed and Flights for Your Trip to Your Overseas Location
Cleanup and Recovery after Hurricane Matthew
Employer-Hosted Training or Processing for Overseas Locations
Taking Care of Things Before You Leave for Your Training Center
Resources for Finding Defense Contractor Jobs in Austere, Danger/Hazard Locations
CHAPTER TWO: US Government Employee and Contractor Workforce
US Government Employees—Who We Are
Military Veterans and Their Family Members as US Government Employees and Contractors
The Department of Defense (DoD)
Life and the Working Environment within US Government Organizations
Restrictions on What You Can Bring Into a US Government Agency
Consequences of Violating US Government Agency Policies
Military Exercises at US Military Installations
The Office of Personnel Management (OPM)
Salaries of US Government Employees
The General Schedule (GS) Pay System
Base Pay and Locality Pay in the GS Pay System
Cost of Living Allowance (COLA) in the GS Pay System
Special Pay Rates for US Government Jobs
Military Veterans Working Overseas as US Government Employees
Grade Level and Step Level in the GS Pay System
The Grade Level
The Step Level
The Grade-Step Level Matrix in the GS Pay System
Negotiating Your Salary in the GS Pay System
Conversion of the GS Pay System to the National Security Personnel System (NSPS) and the Acquisition Demonstration Project (AcqDemo) Pay Systems
National Security Personnel System (NSPS)
Acquisition Workforce Personnel Demonstration Project (AcqDemo)
Company Benefits for US Government Employees
The Civil Service Retirement System (CSRS)
The Federal Employees Retirement System (FERS)
The Thrift Savings Plan
The Application Process for US Government Employee Jobs
Welcome to Jurassic Park
What Doesn't Kill You Makes You Stronger
The USAJOBS and Other Websites for US Government Jobs
Knowledge, Skills and Abilities (KSA) Questionnaire
Resumes for US Government Employee Jobs
The Validity Coefficient—the Threshold for Your Selection
The US Government's Assessment Decision Tool (ADT)
The Waiting Period and Status after Submitting Your Application for US Government Employee Jobs
US Government Contractors—Who We Are
Salaries of US Government Contractors
The Application Process for US Government Contractor Jobs
Welcome to Disneyland Park
To Be or Not to Be
a US Government Employee or Contractor
US Government Contracts with Private Companies
When Another Company Wins the US Government Contract
Job Opportunities for Contractors during the Government Agency Bidding Process
The Choice is Yours
CHAPTER THREE: Security Clearances and Training
What Are US Government Security Clearances
Sensitive Compartmented Information (SCI)
Single Scope Background Investigation (SSBI)
When Are Security Clearances Needed
How Long Are Security Clearances Valid
Obtaining a US Government Security Clearance
Joint Personnel Adjudication System (JPAS)
Applying for a Security Clearance
Interim Security Clearance—Your Foot in the Door
Security Clearance Adjudication—the Final Decision
Getting Employers to Submit You for a Security Clearance
Job-Hunting Advantages of Having a Security Clearance
Military Veterans and Security Clearances
Using Your Security Clearance
Security Training, Testing and Certification Requirements
Security Training and Testing
Security Certification Through Computing Technology Industry Association (CompTIA) Security+
CompTIA Continuing Education (CE) Program
Company Reimbursement for CompTIA CE Fees
Advantages of Security Certification for Job-Hunters
CHAPTER FOUR: Corporate Employee and Contractor Workforce
Who We Are
Corporate Employee—Who We Are
Corporate Contractor—Who We Are
Independent Contractors
Dependent Contractors
Job-Hoppers and Jumpers
Contractors are Free Agents
Contractors in the Corporate World
Private Companies, Businesses and Organizations
Time To Choose
CHAPTER FIVE: The Perfect Resume
Resume + Recruiter = Job Interview
The Curriculum Vitae (CV) and Resume
How Recruiters Review Your Resume
Make Recruiters Search for You Instead of You Searching for the Job
The Ladders Study on How Recruiters Review Your Resume
How Recruiters Use the Applicant Tracking System (ATS) to Find You
The Key to Getting a Yes
from a Recruiter for Your Resume
The ATS System Looks for Keywords and Phrases in Resumes
What the ATS System Doesn't Like in Resumes
Making Your Resume Stand Out to Recruiters and Hiring Managers
Using Positive Impact to Make Your Resume Stand Out
Action Verbs to Make Your Resume Stand Out
Attributes that Make You Stand Out to Hiring Managers
Have a Professional Write Your Resume
Internet Job Search Websites
Update Your Resume Online To Attract Recruiters
How Social Media Affects Your Job Opportunities
Resume Reality Check
CHAPTER SIX: Dealing with Recruiters
Staffing Agencies
The Recruiters
Retained and Contingency Recruiters
Retained Recruiters
Contingency Recruiters
Recruiter Alliances
The Recruiter's Commission
The Recruiter's Knowledge and Experience in Your Career Field
Be Wary of a Recruiter's Request for Your Resume
The Good, the Bad and the Ugly Recruiter
Big Brother and Big Sister Recruiters (The Good)
Headhunter Recruiters (The Bad)
Dr. Jekyll and Mr. Hyde Recruiters (The Ugly)
Requests from Recruiters for Your Exclusive Rights Agreement
Temporary Exclusive Rights Agreement
Submitting Multiple Resumes for the Same Job Opening
Don't Show All Your Cards to Recruiters
Requests from Recruiters to Visit Their Office
Requests from Recruiters for Your Personal Information
Requests from Recruiters for Your Job References
How to Manage Your Job References
CHAPTER SEVEN: Negotiating Your Salary
If it's Not in Writing, it Never Happened
The Best Time to Increase Your Salary is When You're Job Hunting
You Decide What Your Salary Is
Salary Negotiations Initiated by Recruiters
When the Recruiter Asks You What is Your Salary Expectation
A Specific Compensation is better than a Salary Range
When the Recruiter Tells You What the Salary Is
Salary Negotiations Initiated by Job Candidates
Telling the Recruiter What Salary You Want
Asking the Recruiter What Salary the Employer is Willing to Pay
Ask For More Money
Asking For More with Multiple Recruiters
Salary Negotiations Based on Other Factors
College Degrees versus Experience and Certifications
The Salary Depends on Experience
Statement
HR, Hiring Managers and Staffing Agencies that Ask for Your Salary History
Why HR Departments and Hiring Managers Ask for Your Salary History
Why Staffing Agencies Ask for Your Salary History
Converting Between Annual Salary and Hourly Rate
Converting Annual Salary to Hourly Rate
Converting Hourly Rate to Annual Salary
Negotiating Relocation Benefits
What are Relocation Benefits
Income Tax Exemptions for Job Relocations
CHAPTER EIGHT: Interview Preparation and Tips
Start With a Thank You
First Impressions Are Lasting Impressions
Give Yourself Time to Prepare for the Job Interview
Appearance and Attire for Job Interviews
How Your Appearance and Attire Makes an Impression
How to Dress for Visits to Recruiter Offices
Prepare Your Attire Ahead of Time for the Job Interview
Recommendations for Men's Appearance and Attire for an Upcoming Job Interview
Recommendations for Women's Appearance and Attire for an Upcoming Job Interview
Research the Company Client
Research the Job Description
Employers Don't Expect You to Know Everything in the Job Description
The Job Description Reveals What Subjects the Interviewers Will Ask Questions About
Your Resume for the Job Interview
Your Resume Review Ensures Your Interviewers Have the Latest Version of Your Resume
Your Resume Review Ensures You Are Prepared to Talk About Your Resume
Certification's and Experience's Place in Job Interviews
Arrival at Your Job Interview
Introductions in Your Job Interview
How to Prepare Your Introduction for Your Job Interview
Technical Fitness and Cultural Fitness in Your Introduction
How to Include Your Technical Fitness in Your Introduction
How to Include Your Cultural Fitness in Your Introduction
Job Interview Questions and Answers
Job Interview Questions about Your Technical Fitness
Job Interview Questions about Your Cultural Fitness
How You Should Respond to the Weakness Question
Cultural Fitness Questions and Answers
Questions to Ask the Interviewers and Closure
Closing Statements at the End of Your Job Interview
Role-Playing Job Interviews
Practice Role-Playing with People You Know
Even the US Military Performs Job Interview Role-Playing for their Departing Military Members
CHAPTER NINE: It's Game Day—The Job Interview
During the Job Interview
Everyone Gets a Little Nervous Before Game Day
The Job Interview Process
Prescreening Questions and Answers before the Job Interview
When the Recruiter Asks You the Prescreening Questions
Delay the Prescreening for another Day
Start Answering the Prescreening Questions on the Spot
When the Recruiter Emails You the Prescreening Questions
The Phone Interview
How Phone Interviews Benefit the Interviewers
How Phone Interviews Benefit Job-Hunting Candidates
How to Call In for a Phone Interview
Arrival at Your Job Interview
Arriving to a Job Interview at a US Government Agency on a Military Installation
Introductions in Your Job Interview
When Staffing Agency Recruiters Meet You at Your Job Interview
When Staffing Agency Recruiters Do Not Meet You at Your Job Interview
Your Initial Greeting at Your Job Interview
The Hiring Manager in Your Job Interview
The Team Lead in Your Job Interview
When it's Your Turn to Give Your Introduction in Your Job Interview
Intelligence Quotient (IQ) versus Emotional Quotient (EQ) for Job Interviews
The Importance of Intelligence Quotient (IQ) in Job Interviews
The Importance of Emotional Quotient (EQ) in Job Interviews
The Importance of Attitude in Your Job Interview
Power Posture, Power Thoughts and Power Words for Job Interviews
How Posture Impacts Your Job Interview
How Power Thoughts and Power Words Impact Your Job Interview
Power Postures, Thoughts and Words—Use It or Lose It
Other Factors That Impact Your Job Interview
How the Chair You're Seated On Impacts Your Job Interview
How Eye Contact and Head Level Impacts Your Job Interview
Where to Put Your Hands in Your Job Interview
Job Interview Questions and Answers
The Interviewers that Ask the Questions
How to Answer Questions in Your Job Interview
How to Answer Questions about Salary in Your Job Interview
How to Answer Questions about How Soon Can You Start Working
Questions to Ask the Interviewers and Closure
Closing Statements at the End of Your Job Interview
Thank the Interviewers for Inviting You to the Job Interview
Ask the Interviewers for the Job
CHAPTER TEN: After the Interview—Now What?
Congratulations!
Sending Thank You Notes
Perfecting Your Craft
Other Job Opportunities
The Wait and the Response
What Happens If the Answer is No
How to Handle Rejection after a Job Interview
STRAIGHT FROM MY HEART
Introduction
Leaving the military and returning to the civilian workforce can be somewhat of a daunting task as your next duty assignment
, particularly if you've been in the military for quite a few years. During our time in the military, our next job location and what we would be doing at our next location always came by way of orders
—we didn't have to figure that part out. These papers representing our next assignment came with the peace of mind and security of knowing that there was a job waiting for us at our next duty location; and much of the leg work, coordination, expenses and moving would be done by other people for the most part. Our main focus was out-processing from our old secure
job and in-processing into our new secure
job. All of that peace of mind and security ends when we take off our military uniform and put on civvies again.
I know what you're going through or have already been through because I've been down that road too as a military member who returned to the civilian workforce. I can assure you you're going to get through this and I'm here to help you with that transition along with many other people who have already helped you along the way.
First, if you are still in the military and are preparing to transition back to civilian life, I encourage you to take advantage of the training and resources that will provided to you at your military's Transition Assistance office. Like yourself, I've been through my military branch's Transition Assistance Program; and I can tell you it was well worth participating in that program. The Transition Assistance team will provide you valuable information that will no doubt help you during your job search process.
Second, if you've been out of the military for a while and still need help in your job search, this book will also be of tremendous help to you. This job hunting guidebook is going to give you an insider's look at many of the job opportunities that await you; what you need to know and do to prepare for and succeed at finding your next civilian job; how to prepare for and succeed at interviewing for civilian jobs; and how to properly and effectively negotiate your next and future salary.
Don't think you're alone in your job search—there are more civilians seeking work than there are military members transitioning back into the civilian workforce.
In the January 2018 Job Openings and Labor Turnover report by the Bureau of Labor Statistics (BLS), 3.3 million Americans quit their jobs in search of new ones across US government and private sectors over that single month of January. In May 2018, 3.6 million Americans quit their jobs in search of new ones; and in July 2018, 3.6 million Americans quit their jobs in search of new ones.
This BLS report is just a sampling of the fact that people are constantly job-searching, leaving their jobs, job-hopping and changing their careers by the droves each month of the year. These figures include only those people who voluntarily quit their jobs, not people who left their jobs through retirement or involuntarily through layoffs or being fired from their jobs.
Even the actor Paul Marcarelli, who used to work for Verizon doing those famous "Can you hear me now? commercials, has left Verizon and started working for Sprint in 2016. As Marcarelli would say,
Can you hear that?"
There is nothing wrong or shameful about wanting to quit your job, search for another job, job-hop or change your career. Changing jobs is a healthy, natural growth process in everyone's career progression—whether it's leaving the military or moving from one civilian job to another one.
So let's get started on your next career move.
CHAPTER ONE
Something for Every Job Seeker
If you haven't found it yet, keep looking.
Steve Jobs
Life is a Competition
So much in life is a competition. We compete for love and attention. We compete in war, in politics, in religions and philosophies. We compete in sports, in entertainment, in social media, in traffic and for the remote control. We compete with siblings while growing up. We compete in school during formal education. Then we compete for jobs—both in the military and in the civilian job market—throughout our working life.
Like it or not, job-hunting and career progression is a competition. Some people are in it to win it. Some want to avoid it, but can't. Others are just spectators, watching from the sidelines. Eventually, we all have to compete at one point or another in this activity called the job search.
The job search process is a competition between job seekers trying to find jobs; a competition between job recruiters trying to place job candidates in jobs; and a competition between employers trying to find people to fill job openings.
Like so many other competitions, the person who masters the proper technique of the competition wins. Mastering any technique requires good coaching, good mentoring, good knowledge, good advice and good practice. Job hunting is no different. That's what led you to this book.
The Warm-Up before the Competition
As we jump into the nuts and bolts of the job search process, which ultimately means more dinero in your pocket, let's first take a look at some things you may be unknowingly choosing for yourself whenever you search for a job or accept a position. These areas impact the type of job you have beyond the obvious job title and job description.
By understanding what you stand to gain and lose in these areas, you'll make more informed career decisions before you even start your job search or negotiate your salary or sign a job offer letter. After reading this section, you'll have greater knowledge and control over your job-searching efforts; something you can use to your advantage throughout your working life. If you haven't weighed the advantages and disadvantages of these areas before, you might be missing out on money, benefits and opportunities that are available to you. Last but not least, this information will help you wisely and confidently negotiate a higher salary or hourly rate with recruiters, human resource personnel and hiring managers. Let's start your training.
You've probably heard the saying that the best time to look for a job is when you still have one. It's true. If you're in a job—military or civilian, and you know it's time to move on, start looking for your new job while you are still employed. Unencumbered with diminishing resources on top of mounting debt and bills, employed people have more time and liberty on their hands to search for that next dream job within the comfort zone of next week's paycheck. On the other hand, if you are among the unemployed crowd who are looking for work, do not fret. This book is your answer to the smartest and fastest way to finding and landing your next job.
But let's not just find you your next job. Let's give you the knowledge, power and control to put you in the best possible position for making the most money you've ever made in your career. I'll show you how to keep increasing your salary each time you look for a new job. It all begins with knowing a few things first. We'll start with the differences between employees and contractors.
Employees and Contractors
Here are some things to consider when deciding whether to work as a company employee or contractor. The Internal Revenue Service (IRS), the Fair Labor Standards Act and common-law rules define whether a worker is an employee or contractor. Common-law rules classify a worker as either an employee or contractor based on the level of control an employer has over the worker. If the employer controls the work to be done, how it will be done, as well as the results; and supplies the majority of the equipment, supplies, resources, training and direct compensation to the worker to complete the work; then the worker is considered an employee. In this case, the IRS would require the employer to withhold state and federal taxes before paying the employee their wages each payday.
When the employer lacks these elements of control over the worker, the worker is considered a contractor. In this case, the IRS does not require the employer to withhold state and federal taxes before paying the contractor their wages. Not so fast with the Snoopy dance if you're thinking about becoming a contractor to avoid paying taxes to the IRS. The IRS would seek these taxes directly from the contractor at the end of the tax year.
Independent Contractors versus Dependent Contractors
There are basically two types of contractors: independent contractors and dependent contractors.
Independent contractors are self-employed individuals that own their own business. Employers, customers and client payers do not pass the common-law employer control test
with these contractors because independent contractors maintain the majority of control over the work they do, how their work is done and their resources. Once an employer, customer or client pays an independent contractor their tax-free
wages for their products or services, the IRS would require the independent contractor—not the employer, customer or client—to pay state and federal taxes on those wages.
Dependent contractors on the other hand do not own their own business and are not self-employed. These contractors typically work for another company. Dependent contractors can work for either primary companies or secondary companies.
A primary company, referred to as the prime
company, is where the contractor works directly for the company that has the business need that the contractor is hired to fill.
A secondary company, referred to as the sub-company or sub
, is where a contractor is hired by a secondary (sub) company to fill the business needs of a primary (prime) company.
An example of this second type of dependent contractor would be a secondary company, such as Lockheed Martin, working as a sub-company to a primary company such as Northrup Grumman. In this case, all of the contractors working for Lockheed Martin would be considered subcontractors or contractors working for the sub-company; and all the contractors working for Northrup Grumman would be considered contractors of the primary or prime company.
Another example of this second type of dependent contractor is staffing agencies. A staffing agency is a secondary company that oftentimes pays the salaries for contractors that are working for a primary company, also referred to as the company client or simply the client.
Direct Hire, Contract-to-Hire or Contract
When employers are seeking to fill an available position, they typically offer the position as a direct hire (DH), contract-to-hire (CTH or C2H) or contract position.
Direct hire means the employer wants to hire you as a permanent full-time company employee.
Contract-to-hire means the employer wants to hire you as a temporary contractor, but the employer plans to convert your contractor position to a permanent full-time company employee position, based on your performance, after you successfully fulfill the time period of your contract obligation
Contract position means the employer wants to hire you as a temporary contractor with no plans to convert you over to a permanent full-time company employee.
When a company advertises a job opening on their company website, they normally offer that job as a direct hire position. Companies will also use staffing agencies to help them fill available positions. When companies use staffing agencies to help them in the recruiting process, companies oftentimes offer these jobs as direct hire, contract-to-hire or contract positions.
Direct Hire Worker
If you find a direct hire position through a staffing agency, and you are hired for the job, that staffing agency and recruiter who found you get paid their expected commission by the employer who hired you. This is where your business relationship with the staffing agency ends and your business relationship with your new employer begins. Once the staffing agency hands you off to your employer as a direct hire, you become that employer's permanent full-time company employee. All of your paychecks (including taxes withheld), company benefits and working relationship will be directly with that employer from that point on.
Since you were working through a staffing agency, the salary and benefits you negotiated with the staffing agency recruiter or account manager for that direct hire position will become your permanent salary and benefits with the employer once you are directly hired as a permanent full-time employee. Therefore, it is important that you negotiate as high an hourly rate or annual salary as possible with the staffing agency recruiter before you accept that direct hire job. You do not get a second chance or a do-over to renegotiate your salary with your employer after you agreed to that salary through the staffing agency. Also, ask the recruiter or check the client company's website about the type of company benefits you will receive before you sign the job offer letter for that position. Make sure your job offer letter includes a statement saying you will receive these company benefits before you sign.
You can be more direct and assertive in your salary negotiations with a staffing agency recruiter than you normally would when negotiating your salary with the hiring manager who is also the one interviewing you for that open position. Don't fret over the idea of negotiating your salary for now. I'll provide you plenty of details and examples as I explain to you the variety of ways to negotiate a higher annual salary or hourly rate in chapter 7.
Since we're momentarily on the subject of negotiating salaries, here's where I want to share with you this important truth.
Your highest raise is the salary you negotiate.
The highest raise you'll most likely ever receive in your current job is the salary you negotiated for that job. Allow me to explain.
The time to increase your salary to where you want it to be at is not after you are in that job. The best time to increase your salary to a level you're satisfied with is while you negotiate your salary for that job before you sign the offer letter.
Some job seekers will accept whatever salary is offered to them for a particular job, hoping they can increase that salary with raises each year once they're hired. True, you may increase your salary with annual raises, but this is not the best way to increase your salary to a high level.
The quickest way to increase your salary for a job is to start off by asking for the highest possible salary when you are first hired for that position. This strategy works better than accepting that job at a lower salary; and then expect to receive annual raises to increase your salary to the level you'd like it to be at.
After retiring from 20 years in the Air Force while at Ramstein Air Base, Germany, I accepted a direct hire position for a large US company in Germany. I accepted the position for a much lower salary than I wanted. I took the job hoping after working there each year; the company would reward me with annual raises that would increase my salary to a higher level. What I discovered was that the raises were only for one or two thousand dollars each year. In my fourth year with this company, I realized my salary increases were happening at a much lower and slower rate than I expected with annual raises.
Then I tried something I'm telling you to do. I decided I would try to search for another job and ask for the salary I really wanted during salary negotiations. What I discovered during salary negotiations with another company was that this new company was willing to pay me $30,000 more in salary than the salary I was currently making with my previous employer with the raises I received over a 4-year period.
This is what I mean by saying the highest raise you'll ever receive is the salary you negotiate.
I've used this salary-increasing strategy throughout my career for US government and corporate jobs to increase my salary faster and in greater amounts than I could every possibly attain through normal raises that companies give their employees. Using this salary-blaster strategy, along with other tips I will show you throughout this guidebook, helped me to eventually attain 6-figure salaries.
The only other way to get a significant increase in salary within the same company is by accepting a position change within that company that pays a significantly higher salary. However, that may mean doing a job you may not enjoy. In that case, you're better off finding another job you like that pays you the higher salary you want than to move into another position you don't enjoy within the same company in order to get that higher salary.
Contract-to-Hire Worker
Contract-to-hire jobs are oftentimes referred to as CTH or C2H by staffing agency recruiters. If you find a contract-to-hire position through a staffing agency and you are hired for the job, your business relationship continues with the staffing agency throughout your time working as a contractor for the company client that hired you. Although the source of the money you will be paid is coming from the company client, the staffing agency is your employer who pays your wages every payday.
In this arrangement, the employer who hired you (the primary company) does not pass the common-law employer control test; and therefore, under IRS rules, does not withdraw taxes from your wages.
The staffing agency who is paying your wages (the secondary or sub company) passes the common-law employer control test over you; and are required by the IRS to withdraw taxes from your wages and report your earnings to the IRS at the end of the tax year. You will be working at the worksite of the primary employer who hired you for the job; taking directions from managers and leaders of that company; and working alongside permanent company employees there; but under IRS rules, you belong to the staffing agency—not the company that hired you—and are classified as one of the staffing agency's contractor workers.
At the end of your contract period, the hiring manager and other permanent full-time employees of the client company that hired you will evaluate your performance. If they like your performance, the hiring manager will offer you that same position as a full-time permanent company employee.
If the hiring manager decides to make you a permanent company employee, what typically happens is the hiring manager will approach you in private and ask you if you'd like to become a permanent company employee. If you tell the hiring manager you would like to become a company employee, the hiring manager will coordinate with his or her company's human resource (HR) department to make you an offer for the permanent employee position.
As with the staffing agency paying your hourly rate or annual salary as a contractor, you will again have to negotiate your hourly rate or annual salary with the client company. The client company's HR department will send you an offer letter with a salary quote for that company employee position. You can either accept the offer or respond back to HR with a counter-offer asking for more money.
Here's what you need to know about this situation.
You are probably in the best position you could ever possibly be in when it comes to having leverage to ask for more money if you feel the salary in the job offer is too low.
LEVERAGE
What is leverage? Leverage is being in an advantageous position where you're able to use or expend lesser amount of something to gain a greater amount of something else. In other words, leverage gives you a greater return on your investment (ROI). Leverage puts you in an advantageous position to ask for more. When it comes to salary negotiations, leverage allows you to ask for more money or company benefits. Leverage gives you greater power and control at the bargaining table. The key to unlocking this power and control in salary negotiations is in knowing what your leverage is. I'll provide you that knowledge throughout this book.
Why do you have more leverage to ask for more money when a company's HR department sends you an offer letter for a full-time permanent position from a C2H position? Because you've already proven to the hiring manager and your co-workers of that company that you are an excellent person for the job. That's why they're offering you the full-time permanent employee position. In their eyes, you're a good technical fit and cultural fit for their company.
The hiring manger has been observing and evaluating your performance during your entire contract period and liked what he or she saw in your work. You already have the hiring manager's seal of approval. That's leverage. Therefore, if you feel that the salary HR is offering you is too low, now is the best time you'll ever have to ask for more money in salary negotiations. HR is going to have a harder time saying no to the salary increase in your counter-offer when they know the hiring manager wants you for the permanent employee position.
So how do you communicate to HR that you want more money? Thank HR for the job offer; let HR know that you appreciate the job opportunity; tell them you want to work for their company as a permanent employee, but you would like to see the compensation at a higher amount. Then tell them in your counter-offer what amount you want. In chapter 7, I'll teach you a variety of methods on negotiating your salary and asking for more money during those negotiations.
One thing that's important to realize though is that