Some thoughts from employer's point of view

[AtW]

AtW - I think you are being patronising.

I am not.

Your taxi analogy does not work for a start. If I were a taxi driver I would not expect you to get in my car, ask me to take you to the nearest hotel and then yell at me because you didn't like it.

You are getting into specifics of the job (whether clients yell or not) without grasping the main economic model of taxi driving: they don't do it 100% of the time, so they have to charge more to make up for waiting.

If you look at phone booked taxies then you will find they are more efficient because central dispatch can send them to where the clients are, this is why they are generally cheaper than black cabs. In our case this would represent model of an IT consultancy that can actually shift their resources to where the demand is.

Taxi analogy is very good because who would use taxies all the time? Not many people/companies, which is why if suddenly if all or many good drivers quit trains/buses and started driving taxies all the time then whole economy would suffer.

[mace]

That's true, I'll get back on this once we hire our 10th person, whenever that happens. Let's hope it will be a contractor...

AtW, I don't think the world works in the logical way that you'd like. Most of it's about politics and relationships. I've worked for small companies and the directors (not owners) have still wasted money on expensive consultancies without getting the sack. Consultancies are even more expensive than contractors so why not have a whinge about them 1st. They're notorious for employing guys straight out of college and charging them out at £800+ per day.

[AtW]

You run a company, so I'm guessing you have sought some kind of intellectual property rights, which effectively excludes other companies just stealing your ideas. If you follow your argument you shouldn't complain when johnny foreigner waits for you to come up with ideas and then undercuts you.

We have copyright and database rights. I am sure we'll have competitors soon who'll try to undercut us, would I complain about it? No - I am trying to ensure we are #1 in what we do, either way how is it relevant to current discussion?

[suityou01]

Taxi analogy is very good because who would use taxies all the time? Not many people/companies, which is why if suddenly if all or many good drivers quit trains/buses and started driving taxies all the time then whole economy would suffer.

It would be cheaper for me to use a taxi service. I choose to drive my own car as it gives me greater flexibility.

It would be cheaper to hire a permie, larger firms choose to hire contractors as it gives them greater flexibility; easy to get rid of, user friendly, dedicated, non complacent, no training costs, less sick days yada yada yada

[mace]

I am not.



You are getting into specifics of the job (whether clients yell or not) without grasping the main economic model of taxi driving: they don't do it 100% of the time, so they have to charge more to make up for waiting.

If you look at phone booked taxies then you will find they are more efficient because central dispatch can send them to where the clients are, this is why they are generally cheaper than black cabs. In our case this would represent model of an IT consultancy that can actually shift their resources to where the demand is.

Taxi analogy is very good because who would use taxies all the time? Not many people/companies, which is why if suddenly if all or many good drivers quit trains/buses and started driving taxies all the time then whole economy would suffer.

The taxi analogy is rubbish. 1 taxi is pretty much identical to another, and the councils restrict the supply of taxis in any particular area and assign a set charge rate. It's not exactly a free market, is it.

[AtW]

AtW, I don't think the world works in the logical way that you'd like. Most of it's about politics and relationships. I've worked for small companies and the directors (not owners) have still wasted money on expensive consultancies without getting the sack. Consultancies are even more expensive than contractors so why not have a whinge about them 1st. They're notorious for employing guys straight out of college and charging them out at £800+ per day.

I agree with you here - consultancies are mostly waste of money and time! I'd certainly prefer to hire contractors than consultancy.

The thing that I am trying to explain is that for the kind of work we do - IT development, it is difficult to even consider getting contractor for anything but trivial things.

Fundamental problem is that contracting is not meant to be full-time - it is meant to be short term work that carries a premium because the person won't be doing this work 100% of the time, that's the "taxi model" as I call it. There are obviously exceptions like in everything, but the principle should remain - when it is violated over long time, then the system responds to adjust itself: you get ICTs, visas, outsourcing.

[AtW]

The taxi analogy is rubbish. 1 taxi is pretty much identical to another, and the councils restrict the supply of taxis in any particular area and assign a set charge rate. It's not exactly a free market, is it.

Analogy is correct in a sense that taxi driver is not working 100% of the time - the reason it is more expensive than bus/train, is because he has to waste time waiting for clients. I don't have hard data at hand to say how much time average black cab driver is not billing, but that's certainly more than 25% of the time, probably 50%.

This means that if taxi driver is used all the time then it becomes too inefficient - you might as well buy a car (permie).

Free market has got nothing to do with it.

[AtW]

It would be cheaper to hire a permie, larger firms choose to hire contractors as it gives them greater flexibility; easy to get rid of, user friendly, dedicated, non complacent, no training costs, less sick days yada yada yada

I think the reason they do that in UK is because good permies realised they are good and can make more money by being contractors as it would allow to optimise tax affrairs better.

Essentially what should have happened is that employers should have realised your value and increased your permie salary considerably.

Some IT contracting jobs are certainly perfectly inline with my "taxi theory", or if you want "plumber theory".

[suityou01]

Essentially what should have happened is that employers should have realised your value and increased your permie salary considerably.

[mace]

I agree with you here - consultancies are mostly waste of money and time! I'd certainly prefer to hire contractors than consultancy.

The thing that I am trying to explain is that for the kind of work we do - IT development, it is difficult to even consider getting contractor for anything but trivial things.

Fundamental problem is that contracting is not meant to be full-time - it is meant to be short term work that carries a premium because the person won't be doing this work 100% of the time, that's the "taxi model" as I call it. There are obviously exceptions like in everything, but the principle should remain - when it is violated over long time, then the system responds to adjust itself: you get ICTs, visas, outsourcing.

You can hire contractors for short term assignments, you know, and contractors charge even more then. Consultancies provide clients with certain things which permies and contractors can't supply:-

1. The consultancy's reputation i.e. because a lot of company's have used the consultancy before, the CIO is less likely to lose his job if they screw up, so has covered his ass.

2. Consultancies often have people immediately available.

3. Some consultancies build up a library of knowledge.

4. A companies reputation may be improved by using a consultancy. For example, if the consultancy were to use a project with your company as a case study, you'll get publicity which would be hard and expensive to generate on your own.