First time Permie to Contract - What Rate Should he ask for?

[Dynamic]

Is that 'few' or 'a few'???

If you don't know many that haven't been out of contract for months that's because you don't know many contractors.

Yeah, the market has been very tough but it's now better and picking up again I've heard.

I saw in your blog you have been out of work for about 5 months; it should have been tough!

[northernladuk]

so it would be like

£60,000 / 1000 * 7.5 = £450

do you think it should be calculated like this for first time contractors even? or with a lower coefficient e.g. 6?

Or...

£60,000 / 1000 * 7.5 / x * y * z + r ! * blah = £450

Where

x = aversion to risk
y = required days holiday a year
z= importance of family life against living away during the week
r= willingness to commute daily long distances
blah = and so on and so on

IMO you just can't compare rates. He could come up with £1000 a day but if the agent isn't paying that he can't ask for it. Market research and finding what is on the groun is a lot more useful than quoting imaginary number with a whole load of variables that are not calculable.

Forget being starry eyed and saying 'wow i can ask for £450 a day I am rich' and look at ads and say 'Hmmm, rates seem to be between 150 and 400 with unacceptable travel in some cases. Am I willing to do it for that rate'. I kid you not about the lower rates as well.

One you have a role in mind with a rate offered (possibily negotiable by 50-100 quid either way in some cases) then the decision as to stay permie or go contracting becomes a lot easier to make.

Problem is we have this discussion many times on here and as much as everyone shouts about it being more than the money the OP always pulls it back to the money.

[Support Monkey]

I've done my research from colleagues, a contracting book I read and other things.

another thing I've heard from an experienced contractor that you can put in average 7 weeks a year aside for holidays, sick leaves, etc so in average 45 weeks a year you could do contracting (assuming you find work obviously) although I know few contractors who have been out of work for months.

go to Amazon and read the first review, if your following any of the advise in that book you do not nead to worry about what your getting paid cos you have no chance of every getting a contract

[northernladuk]

go to Amazon and read the first review, if your following any of the advise in that book you do not nead to worry about what your getting paid cos you have no chance of every getting a contract

And people have also picked up on the fact that nearly ALL the 5* reviews have also reviewed his other book, also giving 5*. The feedback on this book is 99% crock and the rest say it is rubbish. Not one on my list by any stretch...

[Scrag Meister]

so it would be like

£60,000 / 1000 * 7.5 = £450

do you think it should be calculated like this for first time contractors even? or with a lower coefficient e.g. 6?

The "coefficient" is the hours you work per day. i.e. Gives you a daily rate rather than a hourly rate.

[ASB]

Let us assume the package is:-

60k
10% Er Pension
10% Bonus (non pensionable)
Car (6000 cash instead)

Then the cost to the employer is:-

72,000 + 8,500 ErNi + 6,000 Pension = 86,500.

For this the employer will get:-

260 days, -25 days holiday, -6 days sick, -8 bank hols = 221 days.

This gives an effective cost per day to the employer of 391. It does exclude cost of the HR function and that sort of thing.

So, if you never spend a minute out of contract and get 400 per day, don't feel a risk premium is appropriate etc the you would effectively be a shade ahead.

If you expect to spend, say, 10 days hunting down those next contracts and say 20 days out of work and manage to charge 450 per day then you would be in about the same position.

Oddly enough this is annual salary / 1000 * 7.5.

[Dynamic]

go to Amazon and read the first review, if your following any of the advise in that book you do not nead to worry about what your getting paid cos you have no chance of every getting a contract

3 out of 53 (~ 5%) have rated below 4 for that book and you see only that?! too negative

[CheeseSlice]

And multiply that by 7.5

Careful there, my last contract was an 8 hour day!