Reply to: FTC any pitfuls to be aware of

[rocktronAMP]

Thanks all for the replies.
To break it down.

FTC for 9 months, then option to go perm.
They had someone in who was contract, then went perm and then decided he wanted to go back to contract.

FTC is direct with end client.

I am happy to take the FTC for 9 months, if its a good for me and the company, then yes happy to go perm (provided salary etc all works out). The difference between the FTC rate and the perm rate is about £12k (if I worked it out right). This could be negotiable and tbh even if it wasnt, its something I could make work if I really wanted to.

If not, I can go back to contracting. I will make my ltd dormant for the period.

Fully aware that an FTC wont give me career progression/growth etc. What it does do it get me out of the public sector (something I have been looking to do for a while) and open the door to a new industry.

Well good for you. FTC is direct with the prospective end client.

The question for you, then, is this the only game in town? Do you really need the money? Family, kids, debt, loans , etc if so, then take the FTC, it will give you stability for 9 months as you said.

In contracting, IMHO, it very rare that you can get a promotion anyway. If others have a different career experience then they can relate it.

What is it do you want to achieve in a career?
Technical - software engineer, senior software engineer, technical lead / architect
Non-technical: business analyst, project manager, program director, PMO
and some people don't care about powers and big company job titles and simply exclaim, "just give me the money!"

If I imagine myself in the shoes of Client Co, then 1) I am feeling hurt, because I lost a resource previously, my critical project is delayed and could be again 2) I want hedge the risk of the next person I hire in with this FTC (you) regardless of notice period and 3) I want to save money still £12K on the new person expenditure (you) just in case my fingers are burned again.

Good luck in your decisions!

[rocktronAMP]

Yes, you're right there about career growth: you won't have any during your FTC. So if the FTC role is 3 year...forget about promotions and career growth for the whole 3 years.

More wiggle room if your FTC is shorter, say 12 months, at the end of which you might be in an alright position for discussing about a new position with new salary.

A lot you can understand about the company and what future you might have after just a couple of months. The way I see it is FTCs are better than being on the bench and can potentially be an easier way into a permanent role if that's what you're after.

Thanks PCTNN and therefore there are subtle differences: pros and cons.

For transparency, I am leaving a 12 month FTC next month. In my circumstance, my FTC was with an employment agency (they used to be recruitment agency pre-COVID), who took on the contractors like me (LTD until December 2019) and we became PAYE with holiday. This was because the blanket IR35 decisions and lack of Outside IR35 contract in early 2020. So I was working as a FTC temporary resources to the financial concern, we are not employees with Client Co (financial banking industry for context).

So the reality is Contract of Service between me, the worker, to the EA and between the EA and Client Co is Contract for Services.

So you are right. FTC running 4 years consecutively more, I would have been perm but with the EA and not ever Client Co. If the OP has an FTC directly with Client Co, then happy days for them, if not .... well

All I was saying, my FTC experience, I felt I was in a much weaker position, been there and done that. I was once upon time fairly assertive in meetings and bold "You are doing it wrong. This is not the way be Agile (substitute TDD or Design Architecture). You're developing this code wrong, mate", but I learnt to shout my cakehole, because one morning several years ago, I witnessed another opinionated contractor walked out of the door, because he/she had too many fights in that regard. If you are working a temporary resource then remember your mileage may vary in comparison to an employee of client-co, it's the consultants standard answer, "it depends".

[MonkeysUncle]

Thanks all for the replies.
To break it down.

FTC for 9 months, then option to go perm.
They had someone in who was contract, then went perm and then decided he wanted to go back to contract.

FTC is direct with end client.

I am happy to take the FTC for 9 months, if its a good for me and the company, then yes happy to go perm (provided salary etc all works out). The difference between the FTC rate and the perm rate is about £12k (if I worked it out right). This could be negotiable and tbh even if it wasnt, its something I could make work if I really wanted to.

If not, I can go back to contracting. I will make my ltd dormant for the period.

Fully aware that an FTC wont give me career progression/growth etc. What it does do it get me out of the public sector (something I have been looking to do for a while) and open the door to a new industry.

[PCTNN]

I was aware of the financial benefits you mention but was thinking more about career growth, promotion etc. I've started seeing some 3 year FTC roles which seems pointless.

Yes, you're right there about career growth: you won't have any during your FTC. So if the FTC role is 3 year...forget about promotions and career growth for the whole 3 years.

More wiggle room if your FTC is shorter, say 12 months, at the end of which you might be in an alright position for discussing about a new position with new salary.

A lot you can understand about the company and what future you might have after just a couple of months. The way I see it is FTCs are better than being on the bench and can potentially be an easier way into a permanent role if that's what you're after.

[northernladuk]

I was aware of the financial benefits you mention but was thinking more about career growth, promotion etc. I've started seeing some 3 year FTC roles which seems pointless.

You can be in an FTC for four years before they are legally obliged to take you perm.

I think I said two years earlier. That's when you can claim unfair dismissal and the like.

[northernladuk]

I probably would think long and hard about FTC and then going permanent.

Are they getting your services for free ? Missing training budgets, bonus, life assurance fees and matching pension contribs*: what is the employer getting out of it other than a contract of employment termination data?

What is the different between FTC and the Perm employee?

Are you going to be treated as second-class citizen politically? Will you have power in the meetings?


*PCTNN has corrected me here in the next post.

I suppose an FTC operating through an employment agent is more vulnerable. So OP, what FTC is this? Direct with Client Co or Indirect with Client Co.

If FTC is an indirect through an EA to the ClientCo then I would have valid concerns, because usually an EA has anti-competitive clauses in the contracts. You cannot contract directly with the Client Co for 6 months after the contract, usually. But this is different as it is an employment thing so I don't know for sure.

I'd just delete that whole post if were you. Utter crap. FTC is an employment contract. All the rubbish you put before PCTNN corrected you was wrong and everything after it is wrong as well.

[edison]

FTCs have changed: you now by law get most, if not all of the benefits that permie staff get (holidays, sick pay, bonus, pension, and everything else).

FTCs are basically permanent jobs with an end date. Nothing more nothing less.

I was aware of the financial benefits you mention but was thinking more about career growth, promotion etc. I've started seeing some 3 year FTC roles which seems pointless.

[rocktronAMP]

Hi all
Potentially going to be taking on an FTC role with an option of going perm at the end.
It's 6 months at my day rate then if all goes well a perm position.

Am I right in thinking an FTC at my day rate will work out the same as an inside role in terms of take home?

From those taken a FTC, anything I need to be aware (first time for me)

MU

Sent from my LYA-L09 using Contractor UK Forum mobile app

I probably would think long and hard about FTC and then going permanent.

Are they getting your services for free ? Missing training budgets, bonus, life assurance fees and matching pension contribs*: what is the employer getting out of it other than a contract of employment termination data?

What is the different between FTC and the Perm employee?

Are you going to be treated as second-class citizen politically? Will you have power in the meetings?


*PCTNN has corrected me here in the next post.

I suppose an FTC operating through an employment agent is more vulnerable. So OP, what FTC is this? Direct with Client Co or Indirect with Client Co.

If FTC is an indirect through an EA to the ClientCo then I would have valid concerns, because usually an EA has anti-competitive clauses in the contracts. You cannot contract directly with the Client Co for 6 months after the contract, usually. But this is different as it is an employment thing so I don't know for sure.

[PCTNN]

FTC always struck me as the worst of both worlds - little of the benefits of flexibility being a contractor and not much of the benefit of being a permie.

FTCs have changed: you now by law get most, if not all of the benefits that permie staff get (holidays, sick pay, bonus, pension, and everything else).

FTCs are basically permanent jobs with an end date. Nothing more nothing less.

[northernladuk]

Thanks all
Yes the FTC is in response to Ir35 hence day rate for 9 months and then perm option after.
They have already said the perm will be less than the day rate but this is negotiable.

So this is where I'd be concerned. There are three ways of getting people in. Contractor outside for short piece of work, contractor inside for short piece of work or FTC to perm so the client can drop you if they change their mind. Did I mention that FTC's are ****ing horrible?

The fact they are mixing it as response to IR35 tells me it was option two shoved in to option three. Option two was never for a full time role. Still contract. So I'd be worried they want a short term contractor rather than an FTC to perm. It seems to be a mix of two difference requirements that would worry me. It's a bit smoke and mirrors. I could be totally wrong and their intention is to fill a perm slot with FTC then take you on but as soon as you bring in inside IR35 I start to wonder.

I would push for the perm pay first. Even inside the perm pay could be much different. You could get a horrible surprise when it lands. How are you going to feel when you get offered a perm role doing what you do now for 20% less. That's gonna sting.

It's a good company and tbh the contractor market isnt great right now.
I would rather be in an FTC then nothing at all.

Absolutely but I'd be very wary of the perm option if that is something you were really after? if you are happy to treat it as a short term inside gig and happy to leave when the perm offer appears then fill your boots.

[MonkeysUncle]

This is a pretty new thing in the last few years. It is fall out from the IR35 rules so they've just bunged a contractor that would have been inside into FTC but the framework and payments still work on day rates. We did have a thread on this change when they first started appear but I can't seem to find it.

EDIT : Can't find it. It started with your exact question and we dug in to it. It raised issues about the difference between the perm rate at the end which is unlikely to dovetail with the daily rate.

So OP. There is something to check. What is your monthly take home on daily rate FTC and what will it be as perm. If the FTC is indeed contract related it could be more than perm.

Thanks all
Yes the FTC is in response to Ir35 hence day rate for 9 months and then perm option after.
They have already said the perm will be less than the day rate but this is negotiable.

It's a good company and tbh the contractor market isnt great right now.
I would rather be in an FTC then nothing at all.





Sent from my LYA-L09 using Contractor UK Forum mobile app

[edison]

This is a pretty new thing in the last few years. It is fall out from the IR35 rules so they've just bunged a contractor that would have been inside into FTC but the framework and payments still work on day rates. We did have a thread on this change when they first started appear but I can't seem to find it.

I've seen FTC become more common at my last client for junior to mid-manager level roles and for roles I've been approached for since. The last one was £120k p.a. FTC for a year for a role that would probably have been around £750-800 day rate before. That's roughly 70% of the day rate...

FTC always struck me as the worst of both worlds - little of the benefits of flexibility being a contractor and not much of the benefit of being a permie.

[northernladuk]

I have never seen an FTC which offers the same as a day rate most of them are less then average salaries. £50k pa max where you can achieve a day rate of £550

This is a pretty new thing in the last few years. It is fall out from the IR35 rules so they've just bunged a contractor that would have been inside into FTC but the framework and payments still work on day rates. We did have a thread on this change when they first started appear but I can't seem to find it.

EDIT : Can't find it. It started with your exact question and we dug in to it. It raised issues about the difference between the perm rate at the end which is unlikely to dovetail with the daily rate.

So OP. There is something to check. What is your monthly take home on daily rate FTC and what will it be as perm. If the FTC is indeed contract related it could be more than perm.

[Eirikur]

Hi all
Potentially going to be taking on an FTC role with an option of going perm at the end.
It's 6 months at my day rate then if all goes well a perm position.

Am I right in thinking an FTC at my day rate will work out the same as an inside role in terms of take home?

From those taken a FTC, anything I need to be aware (first time for me)

MU

Sent from my LYA-L09 using Contractor UK Forum mobile app

I have never seen an FTC which offers the same as a day rate, most of them are less then average salaries. £50k pa max where you can achieve a day rate of £550 on a contract for the same job

[northernladuk]

FTC is nothing like inside. Don't try compare them. Forget what it might compare as, just look at the value and see if you are happy with it. Sod all you can do about it anyway.

You can find what your take home you can use a PAYE calculator but again what can you do about it? You could also go back to the employer and ask them to work it out as they'll be running it and should be able to tell you exactly what it is. You are employed by them now so you need to be speaking to them first.

Nothing much to be aware of. You've got an employment contract. The one key point is that you have no future there past the FTC end date. They do not have to offer you the job at the end and they can roll the FTC on and on for two years at which point they have to legally employ you or drop you like a hot stone. Don't get too comfortable thinking you've got a dead cert job at the end of it. Just because you are employed you've got to work your best. Don't get your feet under the desk and start slacking. F**king horrible things FTCs.