How I Quit My Job, Doubled My Pay and Cut My Hours in Half

How I Quit My Job, Doubled My Pay and Cut My Hours in Half

Editor’s Note: This is a guest post from Ethan Waldman of Cloud-Coach.

Recently, I quit my job. I submitted my written resignation, my boss gave me a hug, and I walked back to my cubicle a changed man.

But I’m not leaving. Far from it. Oh, and they’re also going to keep paying me. More than double my hourly rate.

Think I’m kidding?

I’m not. Everything I’ve written here is entirely true. This is the story about how I quit my job, cut my hours in half, and got a raise all at once.

The Backstory

Two years ago, I got hired by an up and coming company to work in their HR department teaching technology classes and producing online training (called eLearning). This is a company that’s very focused on growth and development of employees, so I had a regular performance reviews with my boss.

It also doesn’t hurt that the company was (and is) one of the fastest growing companies in North America.

Once these regular performance reviews started happening, I ran into a big challenge. My boss was always asking me what my “3 year plan” was. Essentially, the question she was asking was “What kind of management position would you like and how can we help develop you so you can get there?”

Flattering, really. But I wasn’t interested in working my way up the corporate ladder. I never had been, and even though this was a great company to work for, it didn’t change the fact that I’m not interested in a corporate career.

After about a year of asking “where do you want to be in 3 years”, I gulped and told the truth. I told my boss that I wanted to be working for myself in 3 years. Her response surprised me. “Make sure you give me AT LEAST 3 to 6 months notice before you do that. And I would hope that we would be one of your best clients!”

That was a surprise. She had just opened the door to me quitting, but continuing to freelance. It was a possibility that I hadn’t ever considered.

A year later, on March 1st, I sat down with my boss and gave her my notice for June 1st, and reminded her about the conversation we had a year earlier. She hadn’t forgotten. I was nervous, but firm. I made my intention clear: I was ready to leave, but hoped that I could continue supporting our team as a contractor.

It’s more common than you think.

Most people think that there is absolutely no room to negotiate when it comes to matters like this. But my story should be proof to you that it is possible. I started talking to some of the other consultants who worked for my team, and they all had similar stories- At some point in their careers, they had left their job to go out on their own, and almost all of them were able to maintain relationships with their old jobs that translated into steady, reliable work.

And while working for your current company certainly may not be the end goal for you, the time that you’ll need steady work most is right when you quit your job. So who better to get that work from then a company that already knows what you do, already trusts you, and needs what you have to offer?

When you look at it that way, you start to realize that you do have more power than you think: They need you just as much as you need them. Setting your own terms at your job is not so out of reach.

Here’s how to do it:

1. Have a unique skill-set. If I had been a recruiter, or an HR generalist, or something that is less rare, I think they would have just replaced me.

2. Do really great work. If they didn’t like the work I did, this would have been their opportunity to get rid of me without having to fire me.

3. Don’t take them by surprise. If you’re interested in continuing your relationship with your former employer, you cannot leave on bad terms.

4. Be firm. When I had the conversation a year ago, I don’t think my boss ever really thought that I would leave. It’s a growing company with fantastic benefits, employee stock purchase options, and generous development benefits. It wasn’t in her reality to think that anyone would want to leave. People are clamoring to get in. But not me. You have to make that clear. How? Set a date, and stay firm.

How to Double (or triple) Your Salary

According to the Consultant Journal, to figure out your freelance rate, you can take your salary (plus your benefits, paid vacation time, etc.) and figure out what your real hourly rate is. You can then double to triple that rate.

This is standard practice. Why do you get to inflate the hourly so much? Well, for one you’re no longer guaranteed 40 hours per work a week. You also have to pay for all of your own overhead: office space, self-employment taxes, connectivity, etc.

When I sat down to talk to my boss about my rate, I had all of this prepared. I had my salary, benefits, and adjusted hourly rate. I had the articles printed out that explained why I get to double or triple that rate.

When my boss asked me what my rate would be, I started high. I gave her the triple number, knowing that it was out of the ballpark. She didn’t blink. She told me that she could see paying me that, but right now I have no experience as a consultant. She said that she would be taking a risk on me, just as I was taking a risk by leaving.

I didn’t start so high because I thought I would actually leave with that number. Starting the bargaining high anchored us with a high number, so the doubled number seemed downright reasonable. And so, we shook hands and agreed on my new hourly rate.

I can’t tell you how things are going, because I am not making the transition until June 1st, but I can tell you what a huge weight off my shoulders this is. I was going to leave whether they wanted to keep me on as a part-time consultant or not, but this will make my transition into Cloud Coach full-time a whole lot more comfortable.

Challenge Your Assumptions

We base our reality upon the the people around us. And if you’re working a 9 to 5 in a cubicle, the people around you are likely unhappy, unhealthy, or both. OR they are happy and healthy people who love working in a cubicle. They exist too. I hope that in sharing this story with you that you are able to challenge your assumptions.

The point I’m trying to make is that 99% of the people around you at your job aren’t trying to leave; they’re trying to stay. I hope my story has shown you that it’s possible to go against the current and make it upstream.

And so I ask you again, what is stopping you from leaving your job? What assumptions have you made about how the working world works? Are they really set in stone?

About the Author: Ethan Waldman is the chief technology hero at Cloud-Coach, where he helps people get un-stuck on technology so they can get back to business. Over 500 people have liberated themselves from email hell using his free Email Ninja Kit.

photo courtesy of tyrone warner

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47 Comments on "How I Quit My Job, Doubled My Pay and Cut My Hours in Half"

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Liz Seda
Guest
That’s a very rock-star move! I think people don’t realize just how much they are worth if they do awesome work. You have to think that your employer is making way more money off of you than he’s paying you (which makes sense) or he wouldn’t have you at all. With that said, even if people do know their worth they are afraid to negotiate. They don’t want to get shut down or look audacious. They also dont know where to start and usually begin by being apologetic and then end by not even bringing it up at all. This… Read more »
Ethan
Guest

Thank you! I agree that realizing your own value is absolutely crucial. You can’t start your own biz, or negotiate a contractor role without believing that you’re worth getting paid. :)

Philippe
Guest

I really enjoyed reading your story. Thank you for sharing.

Ethan
Guest

You’re very welcome, Philippe. I hope it helps you on your path to being paid to exist! :)

Bruno Coelho
Guest

Congratulations Ethan!

What a fantastic and inspirational story that proves how being paid to exist doesn’t mean we have to destroy the relationship with the people at our day-job.

I loved this article because not only showed that this can be done by anyone, but also because you provided an action plan that we can follow. I believe that this will increase the chances of landing the first costumer *inside* the company we work with.

Jonathan: keep this kind of guest posts coming my friend!

Cara Stein
Guest

Way to go, Ethan! You’re an inspiration! I wish I had explored this option when I quit my job.

Ethan
Guest

Thank you Cara- It is probably never too late to inquire :)

Scott Cowan
Guest
Great post Ethan, You bring up a point that many of my friends get hung up on. Determining your value and sticking to your guns by charging what you are worth. I have watched many of my friends who have either been downsized or who have stepped away from their careers offer their services for less than they were making before! They really have troubles seeing what great value they offer. One of the things I have been telling them is that they are less expensive to the company simply because they do have to cover the costs of having… Read more »
Ethan
Guest

Thank you Scott! I think the number is something like 40% additional cost on top of your salary is what a company spends on all those benefits.

Alan Reeves
Guest
Great article Ethan. I think what you did is a dream for many people, including myself. My problem is not wanting to do the same work I was doing and thus, needing to completely leave the company. My brother was fortunate to do something similar in moving from a company to working for the government doing the same job, in the same office, sitting at the same desk, just making a bunch more money. I am curious as to how it’s going now. Is your workload from your previous company dropping off? I’ve heard that, as a contractor, you can… Read more »
Paige | simple mindfulness
Guest
Alan, Yes, you can get boat-loads more work done when you have no interruptions and work in your own comfortable environment. When we’re in school we’re trained to think we have to be in school for 8 hrs a day to learn. My husband and I are unschooling our kids and it’s common knowledge among homeschoolers that kids can learn tons more in much less time when they learn on their own terms. School is the training for having a job so we then think that we’re supposed to sit at a desk for the rest of our lives for… Read more »
Ethan
Guest

Alan, I do find that accurate, but not quite as much as I was expecting. In my line of work, I often am waiting on other people for a number of pieces before I can put them together into a training piece. So there are times where I want to sit down and do a few hours of work uninterrupted but cannot.

Johnathan
Guest

I agree with the comment about not recognizing worth. I’m a software developer and I have decent skills, but I don’t seem to trust myself to go out and just start contracting. It’s what I want to do, but I’m concerned with views of not finding clients. Stability. And overall not being quite good enough. It’s slightly different building internal web applications vs. external, and competing with outsource agencies kinda puts me at a hard place to start. I suppose it’s just a leap I have to make.

Any advice for someone who wants to start doing this ASAP?

Paige | simple mindfulness
Guest

Johnathan,

You’re worth as much as you think you’re worth. Change the stories in your head and start believing how amazingly valuable and unique you are and new opportunities will start to appear out of nowhere. Yes, it really happens that way. Your thoughts create your reality and your future.

Ethan
Guest

Jonathan- You’ve got a skill that is always in demand! You could look on online freelancing sites like eLance and others. When you leave your job, you definitely lessen the stability, but setting up a contracting arrangement can help smooth things out.

Natalie
Guest

Great article! Describes my situation really well and gives me hope for the next year ahead. Might be able to do the same someday!

Lisa
Guest
When contemplating this type of move you need to do the math, not just for salary but all the other benefits and drawbacks associated with being an employee vs. freelancer. At first glance, freelancing sounds like a no brainer: double your pay! Great! But then what about health insurance? 401K contribution? Subsidized gym membership? Professional development/training? Equipment purchase and upgrades? One of the reasons freelancers command a higher hourly rate is that they need to pay for those things out of pocket. Typically those cost an employer about 40-50% over and above an employee’s base salary. Of course there can… Read more »
Cedric
Admin

You’re absolutely right Lisa. It’s definitely important to determine what expenses you’re looking at working for someone else vs. working for yourself. However, for some people it’s not just about the money, it’s also about being able to work less, or work whenever and wherever they want. There are other benefits to consider that aren’t just monetary.

Ethan
Guest
Lisa, that’s a great point. While I enjoyed a lot of those other benefits while I worked full time (like the subsidized memberships, free products, etc.), I took a hard look around and decided whether they were really making me happy or not. I found that I was taking advantage of them simply because they were available- not because I really wanted them. So now I have less, but what I lost wasn’t really anything that mattered to me. The only really important thing was healthcare, and I decided to use COBRA to keep the coverage that I had with… Read more »
Paige | simple mindfulness
Guest
About a year ago I was hating my job as I was completely underutilized and un-challenged. I wanted out but wasn’t sure how. Then I reconnected with a guy whose company I had worked for as their VP of Finance until it was sold in 2007. He was getting a couple new start-up’s off the ground and needed a CFO (chief financial officer) for them but not full time. We worked it so that he would pay me the same as I was making at the job but would work from home part time. He knows I’m worth much more… Read more »
Meqa
Guest

All sounds great apart from that my skill set used to be HR generalist, and as you point out, unless you’re a specialist/expert you’re not un a very strong position. So for some if us its got to be something like a 2 year pre-quitting plan of choosing and perfecting a special skill set.

Cedric
Admin

I don’t think being a specialist is necessarily required, although it definitely doesn’t hurt. What is required I think is that you’re a huge asset to your company and are incredibly valuable to them. You can be a generalist and still accomplish that.

Nate Dodson
Guest

Jonathan hit the nail on the head with this comment. It really all comes down to creating value. Create huge value and get huge pay. Make the people you help NOT be able to afford to lose you.

Coy
Guest

I do struggle with how to create value as a generalist – not even an HR generalist. I have a law degree but am not licensed, have an MBA but it’s in entrepreneurship (trained to be a generalist). I provide lots of value in working on lobbying issues, some light financial model building, and business development efforts, but it’s hard for me to see how any of those translate to an outside consultant position.

adebsayo 0 s
Guest

THIS IS GREAT INSPIRATION.TOO MANY WORDS WO’NT DO

Wasima
Guest

Thanks for this great post, Ethan (and Jonathan for sharing it). It was very motivating and inspirational to me. I figured out a couple of years ago that I had no interest in climbing the traditional corporate ladder, nor can I see myself staying exactly where I am for the rest of my career. It’s great to hear your first hand account of how to negotiate a better deal and refocus your energies. Bravo!

Andy
Guest

Ethan, congrats and thanks for sharing your story. It’s great that you have a very good relationship with your boss and took advantage of the opening that she gave you. Be open and honest and most managers are willing to work with you, especially if you give them enough lead time.

Ethan
Guest

Totally. I think we personify the boss as this evil monster too often. Bosses are people too, and they don’t like to be taken by surprise. Sure there are good ones and bad ones, but I’ve found that honesty is the best policy.

Amir Shani
Guest

Impressive
Personally I don’t have an urge to quit my business
I actually opened another business, consulting small businesses as I enjoy my work and sharing my knowledge. I even wrote a book about my experience in business: When Opportunity Knocks Answer the Door which is sell on my website. One day when it sells enough copies I’ll think about retiring :)

Joel Zaslofsky
Guest

Hey Ethan,
I probably could have pulled off a contractor transition when I left my corporate gig, but decided not to. It’s awesome to hear the story of someone who not only tried, but rocked the hell out of the attempt. Way to tell a great story and give everyone a quality path to follow if they choose to blaze their own trail.

Izzy
Guest
Ethan this is a very inspiring post man. It is practical but real. There is a lot of content out there that says “quit your job, follow your passion.” But they don’t talk a lot about the process that comes with that. I enjoyed this post because it gives respect to the actual process rather than the final event. Personally, I am very interested in the process you took over the course of that year to transition from working for this company to being your own boss. Clearly, it is a transition that takes time and my guess is that… Read more »
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[…] else – Ethan Waldman liked his job and co-workers but wanted to do something else. So he quit his job, cut his hours and doubled his pay. The kicker? His previous employer became one of his biggest […]

Gemma D Lou
Guest
Hey Ethan Cool story. And congratulations to you. I met a guy recently who was explaining how he longs to be back in the Portuguese countyside where he’s building a farm, but considering the recession, he had to come back to the UK and find work. What he was doing, was working remotely for a company whilst being in his beautiful farm house in Portugal, as a contractor. After losing that contract, he simply returned to the UK, but with eyes to go back as soon as he can. So it’s definitely possible, but like you said, you also have… Read more »
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[…] How I Quit My Job, Doubled My Pay and Cut My Hours in Half Most people think that there is absolutely no room to negotiate when it comes to matters like this. But my story should be proof to you that it is possible. I started talking to some of the other consultants who worked for my team, and they all had similar stories- At some point in their careers, they had left their job to go out on their own, and almost all of them were able to maintain relationships with their old jobs that translated into steady,… Read more »
Joseph
Guest
Congratulations, Ethan, that’s an awesome story. Great to see that you were able to separate your mindset from the collective mindset around you. I’m on a similar path. My last day at my job was 3 weeks ago and I’m out on my own now. While I am not doing any contractor or consulting work for my former employer now, which is fine because I’m busy enough and frankly I wanted a bit of separation anyway, I know that I will at some point down the road for mutual benefit. The ability to have that anchor client is huge. Best… Read more »
Auren Kaplan
Guest

Dude, this is amazing! I am going to think about it seriously and maybe try it next week… I’ll report back with results.. :)

Cedric
Admin

Let us know how it goes!

Fjam
Guest

Wow, this is an amazing read!!!!!!

Jamie
Guest

Wow, these are the sort of posts that I love reading. I blog about how to quit your job and I have to admit what you did here was truly awesome. I recently gave up the 9-5 grind and it was the best choice I ever made.

Most people are way too worried about the potential failure when it comes to quitting a job and moving onto something they would love to do. I think it is a bigger risk to pass up on opportunities and to stay doing something you hate.

Edward
Guest

Inspiring story. Have done a similar thing myself and it worked out for a few years.

But the world keeps turning…and changing and its difficult to continually change when you are busy doing what you do….until it becomes redundant!

Bottom line….need to keep creating and evolving…moving forward with intent. Relying on past formulas in this rapidly changing environment can result in your momentum slowing.

I guess we need to keep stretching ourselves. Getting comfortable with what you are doing can be the beginning of the end.

Beverly
Guest
Wow, I had a very similar experience to you, doing a very similar line of work. I left a great job of 7 years to launch my own creative pursuit of selling art @ alignbetween.com – but as with any solo-run new business, one often needs residual income in the meantime as you grow that 5-year business plan (especially in the world of art!). Through one of my contacts at the job I left, I was recruited to do contract work at…twice the pay and about half the hours. I could work much more effectively by focusing on only the… Read more »
Joe Barthlow
Guest

I did that and got fired. 5 years ago. My income is not where near what it was.

melanie
Guest

I also quit my job three months ago. I thought I would do great in home-based freelancing. :D Well, it’s not that easy, I think I should try to figure out first what unique skill I should develop to be successful. :)

Ben
Guest

Ethan, great story….

Unlike Joe and Melanie, when I quit my job at years end, I think I will have a better chance of succeeding since my online business is beginning to grow rapidly. It’s been a long time coming, but it is finally here. Good luck to all.

peachfront
Guest

In the early 1980s, managers were already saying that 40% of the compensation was your benefits package such as your health and retirement plan. Since then, the cost of health care alone has exploded. I don’t think you should use the 40% number today. It’s my humble experience as a long time freelancer that if you have only doubled your previous hourly wage but given up health, retirement, vacation pay, stock options, etc. you are losing ground financially.

I think your manager gamed you.

zap
Guest
6 months is a huge notice period for me. I am planning to leave my job and my CEO started talking about my appraisal next month that he kept postponing for around an year. He does not want me to leave and said he`ll never fire anybody. But a dude who casually asked for a salary hike 2 months ago got fired. I recently discovered that our CEO was hiring lot of freshmen just so that he can pay them peanuts and kick the older folks, even though my salary is no where near a peanut. He expects that we… Read more »
izon
Guest

Unlike Joe and Melanie, when I quit my job at years end, I think I will have a better chance of succeeding since my online business is beginning to grow rapidly. It’s been a long time coming, but it is finally here. Good luck to all.

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