Are Contractors Overpaid

[Peoplesoft bloke]

Hmm - Lets think about that

One man bands working at banks for years on end - Supposedly not employees because they have a substitution clause which has yet to be invoked in 20 years of contracting

Oh I see, for a second I thought you meant a real sham.

[joey122]

10+ years in a (very) specialist niche area. Any one CAN do it, but only I have done it my way (that's not a cue for a song!). What I know and the clientco is paying for can be learnt by other people, its not rocket science, but I don't need a lengthy and costly learning curve.

If clientco do not want to pay my rate they can try and find someone else (they'd failed for the 6 months prior to my previous contract expiring).

EDIT

Did I bite?

Fair enough - What exactly do you do

A lot of people are C# / Java developers with a smittering of financial knowledge.

Not exactly HIGHLY specialised

[TykeMerc]

So after six months contracting I still dont get why contractors are paid the money they are

Seriously where else in the UK can you open up a sham Ltd and start invoicing £500 a day + VAT - I just dont know

And what amazes me more then anything is that contractors are now 'experts' in their fields - Sure they get stuff done and can follow orders but is nt that also what a grad fresh out of college can do??

I might seriously be naive but can anyone RATIONALISE and justify why contractors get the rate they ask for (and how senior IT management dont look at the numbers and fall off their chairs)

It's very easy to rationalise why clients want contractors and why they're prepared to pay the rates.

Taking my last contract as an example:-

Clientco had 3 urgent projects to run with fixed delivery dates and no spare Project Managers to run the projects, I was contracted to fill their capability gap. The projects were completed 2 weeks ahead of deadline so by mutual agreement we terminated the contract as they had no upcoming projects needing a PM.
Without using a contractor their urgent projects wouldn't have happened or they would have had to have an extra permie PM who would now have nothing productive to do but would have to be paid.
My fees are completely tax deductible to clientco, they have no obligation to pay for holidays, sick leave, pensions, redundancy or training and since they don't have work for an extra PM now they don't have to pay for one on the off chance they will get work for one to do.

If the rates weren't suitably high that I can afford to be available for clientco's on short notice then I wouldn't do it and the clients would be stuck for resource when unplanned for demand happens.

On the other hand please don't troll, it's glaringly obvious that you're trying to stir up some emotional responses.

[kingshuk]

Fair enough - What exactly do you do

A lot of people are C# / Java developers with a smittering of financial knowledge.

Not exactly HIGHLY specialised

Actually £500 a day will not be far away from the cost of a permie developer in an IB if you include annual holidays, sick leaves, bonus, pension, medical insurance, NI, training costs and annual pay rise (above inflation in good years) and promotions.

I've switched back and forth between permie and contracting in IBs and in the long run I do not think as a contractor I made a huge lot more.

The contracting rates haven't really gone up that much over the years. Some old timers (>15 years contracting in IBs) tell me that taking into account inflation, increased tax rate and increased bureaucracy their real rate has decreased over the years.

[kingshuk]

Not exactly HIGHLY specialised

Doesn't have to be highly specialised always. Recent experience in an IB -

After rounds of layoffs three senior developers from a team of 5 have fled. There are 2 grads left - well meaning but not immediately useful. Its a 24x6 system where downtime means chunky loss of money and reputation. It also needs fairly regular customization (weekly Saturday release). It requires one to be in office by 7AM and on-call support overnight (Asia trading hours). They are looking at offshoring most of the work in 6 to 10 months time. They need someone to keep the lights on.

Why would they want to hire a permie for this or even if they do why would anyone want to join this team?

A contractor will have to be useful from day one (they won't hire anyone who isn't going to be) and will charge high enough for all the pain this job is going to inflict.

[d000hg]

because the alternative is to pay one of the big shops 3-4 times as much for a spotty grad.

Or hire their own hand-picked graduate for 1/2 as much, and make them redundant in a year.

[AtW]

Or hire their own hand-picked graduate for 1/2 as much, and make them redundant in a year.

experienced in real life

[d000hg]

A contractor will have to be useful from day one (they won't hire anyone who isn't going to be)

Seems a trifle naive.

[shoes]

Dawn Primarolo? Is that you?

[MPwannadecentincome]

well if they didn't want a £500 pd contractor they could always go to a big system integrator or consultancy who will happily rent them a graduate as a 'consultant' for at least £800 per day.

or get some indians in as ICT - just advertise the role at £150 pd and watch no-one bite them ship them over.

what's your problem?