When a Client Wants to Buy Out a Subcontractor

Question

Has a client ever offered to "buy out" one of your subcontractors? I have a couple of subcontractors who work for me at various client sites and one of my clients would like to hire the subcontractor as a regular employee. When I hire subcontractors, I have them sign a contract with me stating that they will not work directly for any of my clients without my express permission. I know some outsourcing companies ask the client to pay a percentage of the writer's salary during the first year after "the move". What kind of compensation or arrangement do you use?

Response Summary

Most companies have some sort of arrangement where a contractor can “move to the other side” after a half year of work or once the current project is completed. In other cases, the subcontractor can be bought out during the project for something in the order of two months salary or 20 - 25% of the annual compensation. That said, most of us seem to feel it makes good business sense to let go of the subcontractor--even when compensation agreements are in place--and use the opportunity to strengthen our relationship with the client.