torn apart between perm/contract options

[ChimpMaster]

47k is a good salary, especially in this day and age. Take the job, beef up your skills over the next couple of years and plan your way into contracting rather than just diving in blind.

[GardenGirl]

You'd be insane to make the switch now, you'll be lucky to even get an interview for a contract role with the current climate, take the permie role as everyone suggests and plan your move to contracting when things have got better.

[XLMonkey]

thanks a ton for all your advices, it all seems fairly practical. however i also looked up that the conversion of 47k is 200/day in terms of contracting money (outside IR35). is it that hard to find a role for more than 200 a day?

aRGH

the maths works like this.

HOW MUCH ARE THEY OFFERING?
47k plus 10%(ish) employers national insurance, plus (say) 8% pension contribution plus (say) 2k pa training, plus (say) 500 of other benefits like medical, subsidised canteen, whathaveyou = 60k pa package
(don't believe me - ask for a statement of benefits from your prospective employer and they'll give you the full calculation. it is more than 47k)

If you are contracting, then you pay all these costs from your day rate. So, you're comparison point is 60k, not 47.

HOW MUCH WILL YOU GET?
this is
- your day rate multiplied by
- an average utilisation rate, minus
- the on-costs of your own business

Average utilisation rate is c. 160 days/year
(don't believe me? check out Russam-GMS, Parity or the PCG - they do periodic surveys of the contract marketplace to find out what actual utilisation rates are)

Oncosts of your business are, roughly, 1k accounting, 1k equipment & facilities, 1.5k training = 3.5k pa.
(don't believe me, ask around on this forum, there's some variance, but you'll be in the range 3-4k pa)

so, to work out if you're better off, then you calculate
(day rate x 160) -3,500 > 60,000
therefore,
equivalent day rate = 353


Its your call whether you think that you can reliably get more than this in the current marketplace. I'm sure you know your business better than I .....

[ukblokester]

thanks guys for your replies, i didnt want to come across as someone who is trying to be ignorant, like i said before i want to make an informed decision. what has taken me by surprise really is that i always thought my skillsets were in high demand (actually my exp, not skillsets as such, since i have some major companies in my exp).

i would be keen in early what sort of skills should i be working on going further, is i tmore like python/django or is it java?
i am still finding in a little hard that its that bad a market and that difficult to get somewhere in the current market.

in terms of financial, i am ok for up to 4-5months of waiting time.
pls keep the replies coming in, i need to make the final call today/tomorrow. will let you know how it goes.

[expat]

aRGH

the maths works like this.
...
therefore,
equivalent day rate = 353

I second this, XLMonkey's calculations and real-life numbers are much better than the back of my envelope.

[jim2406]

i asked but got no reply.

where do you live?

and...

are you willing to relocate for contract work?

[TykeMerc]

i am still finding in a little hard that its that bad a market and that difficult to get somewhere in the current market.

in terms of financial, i am ok for up to 4-5months of waiting time.
pls keep the replies coming in, i need to make the final call today/tomorrow. will let you know how it goes.

Look at how many people who post on this board are benched and you will start to get an appreciation of how knackered the contracting market is at the moment.

Contractors are hired for a few reasons, roughly in this order.

1. New project requiring resource - 70%
2. Backfill to cover temporary shortages in perm staff (many reasons) - 20%
3. Interim until a suitable permie can be hired - 8%
4. Other - 2%

In the current very recessionary times option 1 has pretty much gone completely as companies won't initiate and fund projects for anything other than emergency or regulatory drivers. That's why all the experienced contractors here are ALL screaming for you to drop the idea until the market rises significantly.

Incidentally where you have worked in the past while important has little bearing on the rates you can attract, that's governed largely by skillset, you've already accepted that your skills aren't the most marketable.

XL Monkey posted proper numbers which are well researched and in my opinion pretty much bang on, the utilisation rate of 160 days a year is quite optimistic at the moment so the daily rate is nearer to 400 to cover your current job offer.

Incidentally savings to cover all of your expenses for 4-5 months isn't enough, in the current market less than 12 is foolish.

[TheBigYinJames]

Also, us contractors want to discourage any perms from entering an already crowded market, lowering rates even further than they are.

[Fred Bloggs]

Ignore them, dive in! It's great! Loads of cash to be made easily! Pay almost no tax!

[chicane]

I would say 47k is very good for that combination of technical skills, especially if you're outside of London.

47k for a perm role with those skills is exceptional. Most contracts with those skill requirements won't match up on pay - just take a look on jobserve.

WTS - 47k in a perm role for that skillset is virtually unheard of, especially in the current climate. Most PHP senior roles sit around 35k. Stay where you are, seriously.