Contract or permie?

[Fungus]

Quote:
Paid holiday: Yeah, right. All I care about is the amount per year and the number of days of leave. If you like accounting tricks, fine.


Yes, including the number of sick paid days. Sure, you can have insurance for that. But not many companies are happy for a contractor missing two-three weeks as year as it's mostly the case with permies.

Where on earth do you get 2-3 weeks per year sick leave? Blimey. I took a couple of days in 6 years as a permie. I had no choice, and threw up walking home. I've taken none as a contractor. Most people I worked with over the last 20 years took no more than ~2 days a year on average. Some take a lot more in the case of serious illness, e.g. 6 months, but it's unusual. However, the comment that a company might dump a contractor who is sick for a month is valid. Some companies are like that. Many aren't. It depends on how replaceable the contractor is.

Quote:
Training: Yeah, right. [blah blah]


As usual the reality is in the middle. But certainly most of the companies budget a few grands for training, books, certifications, which otherwise you should pay yourself.

I've worked in IT for about 12 years and that is the basis of my experience. I have friends in IT and elsewhere. Training is unusual. Where on earth do you get ~£2K per year for training? Not one company I have worked in - and that's a fair few - spends anywhere near that on training and/or books.

Quote:
Quote: "52 weeks a year payment regardless and not having to cover x months a year unpaid looking for the next role."
I have been out of work for 1 week in 7 years. Most contractors I know are in a similar position, though not all. That is the nature of contracting. There is a risk element.

This I completely disagree. First you basically had no life and you don't want to do that when you approach 40 or you get over that. I had a period of 6 months once working saturday and sunday, sure I made lots of money but at the end I needed a 1 month holiday to recover on which I have spent a good part of the savings. And that extra flexibility with days that you were talking about comes with a price, it's not free. If we want to get serious, many companies offer you unpaid leaves when you are permanent.

What on earth do you mean that I had no life? I have had more life as a contractor than a permie. As a permie I was stressed out of my box, and often treated like crap. As a contractor I've been able to take as much holiday as I wanted, without having to use up entitlement, and I am treated much much better. And I work normal hours with no overtime, unless I want to, in which case I get paid. I do a standard 40 hours per week. Management treat me with great respect, and the norm is for them to tell me that my work is very good. What on earth do you mean about recovering? Mentally I am far healthier than I was as a stressed out permie. I was getting seriously ill as a permie as diagnosed by a consultant neurologist. I find contracting more relaxing and have been able to recover my health. As a contractor I am a valued resource. My experience is that companies treat contractors with respect because a) they are on important projects and b) they cost a lot and c) they piss off if badly treated, unlike some permies. I just do not understand you.

Quote:
Bank holidays: I get those off too. As I said earlier, it's the total yearly income that counts.

If you took them off, you would already have 54 weeks so you consider normal only 2 weeks off? Oh dear, that's less then what they allow me to work (or napping) from home in this permie job.

What one earth are you talking about? What's this 54 weeks about? As a contractor I take about the same leave as I did as a permie. Except that I have more flexibility, as for example when my late mother was ill.

To sum it up there are advantages and disadvantages but there must be a premium for contractors. If you are not taking this into account you are generally creating a loss in your business. Sure now you can work 300 days a year, let's see in 5 years or in case of an unfortunate event. Didn't you also consider that you have no pension at all and that the notice period is very little? At least in most of good companies as a permie you get a few months salary if they want to dump you for no reason. I tend to agree that 45 an hour which roughly would give you 337 a day, and on average 66k a year. In a 10-20 years time the person who had been permanent at 45k will be much better off than you and at least with a pension. That unless you can resort to some of those special schemes at your own risk. Contracting is good but it must have a price and most of the people now seem to disregard that, selling themselves for less. And the bulltulip about contractors being independent, well respected individuals in the organisation for my experience is crap. It all depends on the environment so I wouldn't factor anything on that.

I just don't understand this pension nonsense. Look the vast majority of company pension schemes are defined contribution ones, whereby you build up a pot. So as a contractor you make contributions yourself. And hence it's the same. Simple. I have large funds that I have put aside as for a pension in addition to other savings. I also have some pensions that came with permanent jobs. One was with Equitable Life, it did well, and I moved it in time to avoid a big loss. The other was with Standard Life and has not grown in almost 10 years. So I buy funds myself and they do much better thankyou. And I have more freedom as to how I use the funds. I am also disciplined so I do not blow the money on frivolous uses.

Anyway, regarding cars, aren't they a taxable benefit, thus reducing the actual gain?

I'm sorry but none of what you say matches my experiences. I've worked in numerous UK IT companies in the Midlands, London, Berks and Herts. These include Psion, Fiserv (major financial software company) and IBM. You must be talking about people at middle and senior management level, or maybe bankers in London? I just have to look at the houses of managers I have worked with to know that even they were not always highly paid.

Anyway, I am a techie, and quite incapable of managing because I loathe it.

Or maybe you are talking about a small number of technical experts? I worked for 6 years as a permie and never progressed beyond being a low paid grunt. I did some team leading (without the title) and hated it. I don't want to change nappies.

Or maybe you are talking about one are of IT, financial work perhaps?

And from what I've seen, the highly paid permies are often the first to go anyway once cost cutting starts, which is commonplace at the moment.

In my experience contracting has an initial risk, for the reasons you clearly explain e.g. sickness and unemployment. But after a few years you save so much that the risks are reduced substantially, and the pros outweigh the cons. Some of the risks are also there for permies, due to defined contribution pensions etc, and a sensible contractor puts money aside for a rainy day, as I do.

Fungus

[ourrob]

Currently swaying towards staying as a contractor for the time being,

Theres about 10% of me which thinks I should do the sensible grown up thing and go for a permenant, local job, but when I imagine myself doing this my gut instinct is to stick with contracting.

I've always been relatively financially reserved, so it took me a fair amount of nerve to jack in being a permie, and go for the contract thing, so I'm thinking I'll keep contracting for a while longer and see how it goes.

[malvolio]

Fungus - you may not have got any of the above as an employee. That does not mean that (a) your employer did not have to budget for those costs in their operating cost (it's called "Overheads" - go look it up), (b) quite a lot of them are mandatory even if little old superhero you have never benefited from them and (c) if you run your own limited comapny then you have the same requirements, albeit more flexibly, as in you can decide not to pay for training, or pension, or sick pay, which is fine as long as your skills stay current for the next 30 years and you never get sick, or have a car crash or something.

So sorry, but 17 years in IT departments does not mean you understand, and clearly you don't. Go run 150 staff for a few years, or a fixed-term £200m budget programme or something of similar complexity, then come back and lecture me on Cost Accountancy.

[DimPrawn]

£40K pa permie is about = to £750/day as a contractor.

That's what I tell the agents and clients anyway....

[Francko]

Fungus, the fact that you have worked 12 years doesn't mean that you have been through a lot of different experiences, and as much as I can read through the lines, you actually worked only for 2-3 companies. I think I have had more different experiences myself in less than 10 years but working for 10 companies. You seem to be too much biased by your permie long term experience, which is understandable as I have been through that too and I was glad to go contracting. But after a while you realise that it's not gold all that glitters and you start separating the good and the bad with an impartial view. Now, I agree with you that it's hard to find a good permie job when you are a techie but that doesn't mean that they are all bad companies out there and we need to make just one penny more as contractors to say that it's better. I have been through hell in permie and contract jobs, and then again in decent places as contractor and as permie. I just cannot compute what's better if you don't add the values to the parameters. And most of the things you say, that you get more respect, that contracting is a fair world, are only relative to your recent experience, which might or might not happen again. Same applied to permie package and prospects, some are crap some are good, you just can't define them without the proper details. One thing is for sure: contracting needs to add a premium for uncertainty and a premium for the lack of benefits and security. It's not just multiplying the days in the year for the daily rate. You are running a business and you seem to be unaware of that. You can't run a business with emotions and feelings, you will realise that in the long term.

[ASB]

"Where on earth do you get 2-3 weeks per year sick leave? Blimey. I took a couple of days in 6 years as a permie. "

Heres a start: http://society.guardian.co.uk/NHSsta...515550,00.html

Public sector averages are higher than national, the article above quotes 11.3 days as an average.

I believe a national average is 10 days. In "cost to the company" terms my permie package is almost identical to what I would cost them previously for the same amount of contract work.

The main difference is that previously all the cost was loaded into my rate and I had discretion how to spend it. Not take holidays, earn more etc. Mind you I do pay rather more tax now.

[DimPrawn]

I still believe that after all the pension, holidays, sick, maternity (for bird contractors), training, company car allowance, medical etc is taken into account the old saying "hourly contractor rate = permie salary in thousands" still holds true.

i.e. £40/hr = £40K + bens, £60/hr = 60K + bens.

Simple as that.

[Fungus]

Fungus, the fact that you have worked 12 years doesn't mean that you have been through a lot of different experiences, and as much as I can read through the lines, you actually worked only for 2-3 companies. I think I have had more different experiences myself in less than 10 years but working for 10 companies. You seem to be too much biased by your permie long term experience, which is understandable as I have been through that too and I was glad to go contracting. But after a while you realise that it's not gold all that glitters and you start separating the good and the bad with an impartial view. Now, I agree with you that it's hard to find a good permie job when you are a techie but that doesn't mean that they are all bad companies out there and we need to make just one penny more as contractors to say that it's better. I have been through hell in permie and contract jobs, and then again in decent places as contractor and as permie. I just cannot compute what's better if you don't add the values to the parameters. And most of the things you say, that you get more respect, that contracting is a fair world, are only relative to your recent experience, which might or might not happen again. Same applied to permie package and prospects, some are crap some are good, you just can't define them without the proper details. One thing is for sure: contracting needs to add a premium for uncertainty and a premium for the lack of benefits and security. It's not just multiplying the days in the year for the daily rate. You are running a business and you seem to be unaware of that. You can't run a business with emotions and feelings, you will realise that in the long term.

I've worked for 7 companies over the last 12 years, 3 of those as a contractor. I was in research before that for 10 years, in the UK and North America.

What's this mention of recent experience? Isn't 12 years enough? Oddly enough a permie I work with is often on the phone to find a contract. He finds being a permie too stressful. He's not the first contractor to permie I've met who feels that way. The contractors I've worked with are relaxed. I've come across contractors going permie, but only because the job market dried up.

I don't run a business with emotions and feelings. What a ridiculous statement. I am contracting at the moment because it is financially worthwhile (though less so than some think).

At my previous client site I would joke with colleagues that I went contracting because I could not take the insecurity of being a permie. They were laying off permies, and retaining contractors. But they got me in the end.

As a permie I was laid off once, and from what I see of the job market, it is not that secure. I have seen friends laid off, and sometimes the pay outs are quite small.

I'm not saying that contracting is all gold. It will suite some people, and not others. Good contracts can make you a mint, but bad ones, that last 6 months, leaving you to scramble for new work, are not so good. I'm sure that it varies from area to area, technology to technology, and person to person, depending on skills. I have a good academic record and that seems to help me get work, though I am not in the big league by any means. My current contract will last at least a year, and hopefully will go on for 3 years or more. But if I was far outside of the Greater London and Thames Valley areas, then I would be less inclined to contract, as there is less work available, and the risk might be too high.

You might be surprised but I would quite like to go permie for a decent company due to stability and working in an area of my choice. However, when I last looked, I would have found it hard to get £35K per annum, with mediocre benefits. I know as I applied to permie jobs, and was universally told that £40K was out with the exception of one company stuffed full of Oxbridge high flyers (the idea turned me off).

I wish I could get £45K + superb benefits, but such jobs just aren't out there. Or at least I couldn't find any on Jobserve. Where are they? Doing what?

Accounting is a strange art. My last client was not spending money training staff and developing their skill set. Instead they brought in expensive contractors, and one was on £100 an hour. At one time they had 100's on site. They had a weird way of assessing how much someone cost. When assessing a permie, they would allocate a percentage of the overheads e.g heating, HR etc. But when assessing a contractor, they ignored all of that. It pissed off the permies no end. The figure I heard from management in several companies was that a permie on £35K cost about £50K overall. I reckon HR and accounts are having too many expensive parties.

One reason why permies cost more is rather mundane. A contractor is brought in when the need arises, (s)he does the job, and then leaves. The client pays for what is done. No more, no less. A permie is there all the time, even if there is no real work to do. I've seen capable people doing nowt because there is no project for them to go to. And of course if a company gets rid of a permie, there's government regulations to follow, which mean it cannot always be done, and an overhead from redundancy pay. And I've always noticed that contractors on average are more capable than permies (though the best permies are as good as anyone). There's always more than a few permies who are useless, which adds to costs.

Fungus

[ourrob]

Well thanks for everyone replies.

Currently erring on the side of contracting, and this is likely the way it
will go, more probably because I'm unsure the permie job is the one for me.

Will let you know if I have any last minute change of heart

[ChimpMaster]

Well thanks for everyone replies.

Currently erring on the side of contracting, and this is likely the way it
will go, more probably because I'm unsure the permie job is the one for me.

Will let you know if I have any last minute change of heart

Dear Rob

you may have realised that this thread is no longer about you and has in fact been hijacked by other individuals.

Good luck contracting, I would do the same because if it lasts long enough and you plan your finances well, you will end up in a stronger position in 4 or 5 years time.