Reply to: Contract vs Perm D-Day

[mirageman]

I'm a full stack Angular / Java developer, though my split is probably 80% angular / 20% java at the moment.

[NowPermOutsideUK]

Nice one. Can I ask: what kind of skills/experience get you a £120k base?

This used to be the norm in london banks for C sharp java developers working in front office credit derivatives pricing and risk management roles. Since 2015 I have lost touch with London salaries but before that 120K for a VP in a front office high stress enviroment was reasonable and achievable

[ChimpMaster]

I've just been offered a perm offer from the hedge fund I've been contracting with over the last 2 years. I think it looks like a good deal to me. My day rate was just bumped up to £775/day at the start of the year, and the perm offer is £120K base + £50K bonus in my first year, so essentially matching my outside IR35 gross per annum. Then 10% employers contribution on pension worth £12K, plus free private Bupa for me and my family, free dental and 25 days odd paid holiday. The work is interesting, I like everyone in the team and there's scope for career development. It's perhaps the best org I've worked for over my contracting career and I know of no permies who have left during my almost 2 year tenure there which is a good signal of general happiness amongst staff. So I'm pretty much decided on taking the offer after 15 years+ of contracting.

The changes in IR35 come April will reduce take home pay as a contractor and I'm sure if I rolled off my contract in April or beyond it would be nigh impossible to match my current day rate. Plus I think I'm looking for stability now I'm 50 and the potential time off sitting on the bench chasing new roles, doing interviews, etc I'm a bit jaded by, and in the wake of Corona I'm sure there are loads of benched contractors chasing after a reduced pool of roles making competition stiffer. It's a top tier hedge fund with a few hundred staff in London and I like the sociability of the place; rather than being some anonymous small cog working at a sprawling investment bank (and I've worked at plenty of those), people know who you are and there's plenty of water cooler chat.

Nice one. Can I ask: what kind of skills/experience get you a £120k base?

[Paralytic]

I've just been offered a perm offer from the hedge fund I've been contracting with over the last 2 years. I think it looks like a good deal to me. My day rate was just bumped up to £775/day at the start of the year, and the perm offer is £120K base + £50K bonus in my first year, so essentially matching my outside IR35 gross per annum. Then 10% employers contribution on pension worth £12K, plus free private Bupa for me and my family, free dental and 25 days odd paid holiday. The work is interesting, I like everyone in the team and there's scope for career development. It's perhaps the best org I've worked for over my contracting career and I know of no permies who have left during my almost 2 year tenure there which is a good signal of general happiness amongst staff. So I'm pretty much decided on taking the offer after 15 years+ of contracting.

The changes in IR35 come April will reduce take home pay as a contractor and I'm sure if I rolled off my contract in April or beyond it would be nigh impossible to match my current day rate. Plus I think I'm looking for stability now I'm 50 and the potential time off sitting on the bench chasing new roles, doing interviews, etc I'm a bit jaded by, and in the wake of Corona I'm sure there are loads of benched contractors chasing after a reduced pool of roles making competition stiffer. It's a top tier hedge fund with a few hundred staff in London and I like the sociability of the place; rather than being some anonymous small cog working at a sprawling investment bank (and I've worked at plenty of those), people know who you are and there's plenty of water cooler chat.

I'd jump at that, but make sure you set aside the 2 year back-taxes due in case HMRC come calling after April.

[BoggyMcCBoggyFace]

If the bonus is not guaranteed your best assuming you get 0, I made same mistake took lower base going on the word of 20% bonus most years, however 6 yrs in I've seen at best 5% and that's with good appraisals, this is at a large non British Bank front office IT mid VP level, pay rises are like rocking horse sh@t. I would push the base up as they can't take that away. This year I expect double 0 on comp day in a few weeks time.

[NotAllThere]

I've just been offered a perm offer from the hedge fund I've been contracting with over the last 2 years. I think it looks like a good deal to me. My day rate was just bumped up to £775/day at the start of the year, and the perm offer is £120K base + £50K bonus in my first year, so essentially matching my outside IR35 gross per annum. Then 10% employers contribution on pension worth £12K, plus free private Bupa for me and my family, free dental and 25 days odd paid holiday. The work is interesting, I like everyone in the team and there's scope for career development. It's perhaps the best org I've worked for over my contracting career and I know of no permies who have left during my almost 2 year tenure there which is a good signal of general happiness amongst staff. So I'm pretty much decided on taking the offer after 15 years+ of contracting.

The changes in IR35 come April will reduce take home pay as a contractor and I'm sure if I rolled off my contract in April or beyond it would be nigh impossible to match my current day rate. Plus I think I'm looking for stability now I'm 50 and the potential time off sitting on the bench chasing new roles, doing interviews, etc I'm a bit jaded by, and in the wake of Corona I'm sure there are loads of benched contractors chasing after a reduced pool of roles making competition stiffer. It's a top tier hedge fund with a few hundred staff in London and I like the sociability of the place; rather than being some anonymous small cog working at a sprawling investment bank (and I've worked at plenty of those), people know who you are and there's plenty of water cooler chat.

I was in the same kind of boat. Took a permie job at the start of this year with a client I've been dealing with at director level since 2010. I developed two of their flagship products that they use to sell consultancy into companies. Back then it was me and 5 directors. Now there's about 100 employees in 5 countries. When I won the company online Escape Room competition, the CEO posted "This suck". And then "Eric has left the meeting". (He was back a little later, but it made me laugh).

Nah. It's a good company, reasonably ethical and most likely will see me to retirement.

[mirageman]

I've just been offered a perm offer from the hedge fund I've been contracting with over the last 2 years. I think it looks like a good deal to me. My day rate was just bumped up to £775/day at the start of the year, and the perm offer is £120K base + £50K bonus in my first year, so essentially matching my outside IR35 gross per annum. Then 10% employers contribution on pension worth £12K, plus free private Bupa for me and my family, free dental and 25 days odd paid holiday. The work is interesting, I like everyone in the team and there's scope for career development. It's perhaps the best org I've worked for over my contracting career and I know of no permies who have left during my almost 2 year tenure there which is a good signal of general happiness amongst staff. So I'm pretty much decided on taking the offer after 15 years+ of contracting.

The changes in IR35 come April will reduce take home pay as a contractor and I'm sure if I rolled off my contract in April or beyond it would be nigh impossible to match my current day rate. Plus I think I'm looking for stability now I'm 50 and the potential time off sitting on the bench chasing new roles, doing interviews, etc I'm a bit jaded by, and in the wake of Corona I'm sure there are loads of benched contractors chasing after a reduced pool of roles making competition stiffer. It's a top tier hedge fund with a few hundred staff in London and I like the sociability of the place; rather than being some anonymous small cog working at a sprawling investment bank (and I've worked at plenty of those), people know who you are and there's plenty of water cooler chat.

[M12]

I would take the permie role, given that post April you will more then likely end up inside via an umbrella. If not with this company then more than likely with a future one.

There has already been a drop in rates permie/contract unless you are lucky.

I myself found at the latter end of last year switching to permie from brolly within the same organization. The team was good, work was interesting and managed to get an acceptable rate.

Going on previous experience as a permie, a bonus is a bonus unless its written into your contract don't expect to get anything. Companies are very good at making excuses, my advice is work harder on getting a high base salary and any bonus is exactly that.

Best of luck whichever way you decide

[PCTNN]

What perm perks make up £60K of lost income?

Imagine what you do now, then imagine doing same role for 1/2 money and monthly reviews and office politics and expected to work all hours for free

Then imagine that client hiring contractors to do what you do on double your rate

Then watch company get rid off you in a blink on an eye

It's not necessarily £60k of lost income. Could very likely be less. Rates vary all the time.

OP earns 500 a day now until end of March, then who knows. They may be unemployed for x months, they may be find another contract paying 400...or 300...or 700 (unlikely given the market trends).

And about the company getting rid of permies in a blink of an eye....in what sh1tholes have you worked? In all my professional experience I've only seen permies being made redundant once and in that case:
- permies were granted a very generous redundancy package
- permies were made redundant only after all contractors were canned

if it's a good company and the work is interesting, I don't see any problems in going permie.

[LondonManc]

75k is great depending on location. Not just north v south but commute and so on. While it’s no doubt currently wfh there will be a future commute to consider.

[northernladuk]

Every perm job I've had has had some sort of bonus of at least 10% (increasing as the role seniority does). They've typically been tied to a combination of personal and company performance for the year, but I don't think they ever paid out at less than 80% of the bonus (due to company performance targets not being fully met).

Granted, 2020 was a different year, so I guess more companies will have looked closely at whether they could pay a bonus.

Same.

[Paralytic]

I want to say a very low percentage of jobs have this, and even those, you have a low percentage chance of actually getting it in a given year.

Every perm job I've had has had some sort of bonus of at least 10% (increasing as the role seniority does). They've typically been tied to a combination of personal and company performance for the year, but I don't think they ever paid out at less than 80% of the bonus (due to company performance targets not being fully met).

Granted, 2020 was a different year, so I guess more companies will have looked closely at whether they could pay a bonus.

But I really have no idea.

Evidently.

[jmo21]

with a 20-25% bonus on top each year.

How common is this type of bonus these days?

I want to say a very low percentage of jobs have this, and even those, you have a low percentage chance of actually getting it in a given year.

But I really have no idea.

[SussexSeagull]

You might be in a sector shielded from it but in the current climate I wouldn't be staking my financial future on receiving a bonus.

[Redbull2021]

Hi,

Interested in getting people's thoughts on the little dilemma I find myself in.

Currently on £500 PD (outside of IR35) with the contract running until end of March this year. Its very likely this will get extended by another 3 months and may go on for the duration of this year although not guaranteed of course.

I was approached for a very good perm job, close to home, after several interviews I secured the position, its a perm job on £75K with a 20-25% bonus on top each year.

I now am having second thoughts do I stick (stay contracting) or twist (go to the perm role) with all the perks that come with it? What would you do?

Interested in getting opinions.

Ta..

I should add the permie role has pretty much a guaranteed bonus which accumulates to another £15k ish on top of the £75k but still a massive drop compared to the £500 PD rate. Other perks of the permie role are 28 days holiday, pension, private health care and the usual suspects (buy/sell leave and all that stuff)