Reply to: Contract rates not obeying inflation

[KentDogWalker]

There is none as far as I'm aware and this is why I'm not so sure things will stabilise.

Putin will not back down on Ukraine, he might pause things, stall, regroup etc. but he will eventually want to take over the entire country or at least large chunks of it (this is what RU did in the past). On the other hand if RU is crushed by sanctions, they might get more desperate and go absolutely bananas, I mean if they have nothing to loose anyway, why not just try something a bit more drastic? This is why this war was such bad news from the very start, unless Ukraine surrenders their territory, there will be no end to this (well the West might decide they have no extra cash / ammo / weapons to give to Ukraine and simply abandon them as well, but for now I think they are just content with the idea of Ukrainian blood being spilled rather than western soldiers / civilians).

you don't surrender land to genocidal manics

[dsc]

That is the big question - what is the exit strategy?
it seems like both sides west and east have put their chips down and are all in, committed.
This is a geopolitical game of chicken, who blinks first. Putin is such a madman, why are we playing it against him?

There is none as far as I'm aware and this is why I'm not so sure things will stabilise.

Putin will not back down on Ukraine, he might pause things, stall, regroup etc. but he will eventually want to take over the entire country or at least large chunks of it (this is what RU did in the past). On the other hand if RU is crushed by sanctions, they might get more desperate and go absolutely bananas, I mean if they have nothing to loose anyway, why not just try something a bit more drastic? This is why this war was such bad news from the very start, unless Ukraine surrenders their territory, there will be no end to this (well the West might decide they have no extra cash / ammo / weapons to give to Ukraine and simply abandon them as well, but for now I think they are just content with the idea of Ukrainian blood being spilled rather than western soldiers / civilians).

[philgo]

Seems that hardly any clients are matching inflation with the rate, rent is going up, food is going up, bills are going up, contract rates the same last seven years

It depends of your experience, expertise, domain, demand, client and finally the way you sell yourself to a client.
In my field, I have seen inside IR35 day rates going up a lot this year versus last year where I took a big hit from going outside to inside.

Then broadly speaking and looking in the past, it seems that rates used to be 1k and above during the golden age. All the previous generation contractors that I worked with (I am millennial) told me that rates were crazy high...

[CheeseSlice]

I'm not so sure inflation will die down so quickly as I doubt the Russia issue will get resolved so quickly (supply issues also don't look like they are fixing themselves fast enough). Unless of course the west decides enough is enough and they will simply abandon Ukraine on the promise that Russia doesn't go any further and everyone goes back to using russian gas. I do agree however that we have to "absorb" inflation, there's no easy way out which is not really something a lot of people want to listen to.

That is the big question - what is the exit strategy?
it seems like both sides west and east have put their chips down and are all in, committed.
This is a geopolitical game of chicken, who blinks first. Putin is such a madman, why are we playing it against him?

[rocktronAMP]

I've worked with them before and they reached out saying they had a huge backlog of work which needed to be cleared and they had 6 months worth of work lined up.

I duly agreed to help, but then they tried the old bait-and-switch Inside approach saying it was easier (even though last time was Outside). I obviously said no.

They then scurried off and did their thing and came back with, Ok we can do Outside but we've only managed to do one SOW so now the contract is 2.5 months, but we'll endeavour to sort the other bits out in the coming months.

Ah ok. I hadn't occurred to me that you had a direct relationship with the client through previous engagements. This make sense now. Thanks. Yeah snap it up.

[ensignia]

Ha! So is that how they are finding the extra money then? Clearly not true, because it reads as a fixed materials and time budget for a piece of work. The real SOW is between the agency and client, which you as the contractor don't see necessarily. But who instigated this? Is it the recruitment agent? Or the client then?

I've worked with them before and they reached out saying they had a huge backlog of work which needed to be cleared and they had 6 months worth of work lined up.

I duly agreed to help, but then they tried the old bait-and-switch Inside approach saying it was easier (even though last time was Outside). I obviously said no.

They then scurried off and did their thing and came back with, Ok we can do Outside but we've only managed to do one SOW so now the contract is 2.5 months, but we'll endeavour to sort the other bits out in the coming months.

[rocktronAMP]

The Outside contract I've secured went from 6 months when I was offered it, to 4 months during onboarding and now 2.5 months when I got the contract through

Ha! So is that how they are finding the extra money then? Clearly not true, because it reads as a fixed materials and time budget for a piece of work. The real SOW is between the agency and client, which you as the contractor don't see necessarily. But who instigated this? Is it the recruitment agent? Or the client then?

[ensignia]

I've been put forward for a couple of roles at £1100 (Umbrella) which is the exception. Most of the Outside rates are where they were 5 or 6 years ago and it's hard to get anything longer term (3 months+). Inside roles usually hover around the £650-£800 mark which is okay but nothing to write home about.

The Outside contract I've secured went from 6 months when I was offered it, to 4 months during onboarding and now 2.5 months when I got the contract through

[Paralytic]

Speaking of inflation, this just happened at my company that made me gag: hr sent an email out along these lines "struggling with rising living costs? make the most of the company's discount voucher scheme"

On the other hand, they're not giving out pay rises due to inflation, unlike a lot of competitors.

Even those giving our rises can muck things up - take the major high street bank who gave a 4% pay rise to everyone earning up to £32K and nothing to anyone earning more, so you ended up with two people in the same team, one who was a higher performer last year, taking their salary over £32K at the time, now earning less than their lower performing colleague, whose salary was just under £32K. Incredulous that HR did not see that one coming.

[Lance]

First there was Y2K when there weren't enough IT workers.

Then came the NHS spine.

We need another cash cow is all it is.

you missed the dot com boom, which coincided with Y2K.

IPv6 will be the next boom, but not until there is enough cash to pay for it.
Note that IPv6 has been urgent, and needed immediately for 25 years now and is still only really adopted by the carriers.
So as soon as the money is available to fund a boom, it will be come actually properly urgent.

Note: We are now closer to the 2038 bug than Y2k, so there's another boom yet to be milked.

[Guy Incognito]

I agree with that to a point but people need to take a step back and look how IT has developed over the last quarter of a century or so (more or less my tenure). It has gone from something that was considered highly skilled and in-demand to the market being saturated through out sourcing and immigration. This had led to permanent salaries stagnating and skilled people either going into management to make progress or cash their chips in and go contracting.

First there was Y2K when there weren't enough IT workers.

Then came the NHS spine.

We need another cash cow is all it is.

[malvolio]

Speaking of inflation, this just happened at my company that made me gag: hr sent an email out along these lines "struggling with rising living costs? make the most of the company's discount voucher scheme"

On the other hand, they're not giving out pay rises due to inflation, unlike a lot of competitors.

How about you give employees a 5% rise instead of a 5% cashback for b&q and just eat?

Thank God I'm leaving

Because raising wages to match (or even exceed) inflation only leads to inflation. Reducing the cost of purchasing doesn't.

Economics 101.

[PCTNN]

Speaking of inflation, this just happened at my company that made me gag: hr sent an email out along these lines "struggling with rising living costs? make the most of the company's discount voucher scheme"

On the other hand, they're not giving out pay rises due to inflation, unlike a lot of competitors.

How about you give employees a 5% rise instead of a 5% cashback for b&q and just eat?

Thank God I'm leaving

[SussexSeagull]

I agree with that to a point but people need to take a step back and look how IT has developed over the last quarter of a century or so (more or less my tenure). It has gone from something that was considered highly skilled and in-demand to the market being saturated through out sourcing and immigration. This had led to permanent salaries stagnating and skilled people either going into management to make progress or cash their chips in and go contracting.

As for not being something special, we might not be in terms of skillset but while permanent employees are off having weekly one to ones or the 1001 other things that seem to stop them doing actual work we are churning away in the background getting the job done and when it is finished we disappear without having to go through a process or being paid off.

We are more artisan than artist bur if we didn't offer a valuable service people wouldn't be paying us several hundred pounds a day to do it.

[lukemg]

Never. Contracting is so diluted now not to mention the offshore offerings. Back in the day it was specialists on rates of 4 figures supplying services the clients just didn't have. Now it's just a defacto standard way to get a piece of work done without having to get lumbered with a permie. Droves and droves of people are turning to contracting and clients are ending up with more contractors than perms in the office.

Contracting as a specialist delivering high value work to a client are over. It's just a sausage factory now. Nothing specialist or clever anymore, just another average perm that left their job to go contracting.

On something more tangible, last I saw when projects were costing heads a perm was costed at roughly twice what they get paid as they cost the company in overheads, benefits, office and all that i.e. the total cost of emplyment. So they just farm the same role out at the same rate to the contractor. When people say we are an expensive resource we aren't really, we cost about the same as employing someone. People just make the mistake of thinking the wage is the only cost to conisder.

So same cost to the project, difference is we just pocket the lot. So in a good majority of cases our prices are driven by rate cards that are linked to the cost of perm so very little to do with market conditions, skills or anything. As salary is only part of the cost of a perm the rate card doesn't change much hence nor do rates. That's my ill educated opinion on part of the reason rates going up. The other above is a glut of tulip contractors and hey presto, no change and no chance of their ever being.

WHS x1000 - Could try but would never be able to say it better ! They are buying the flexibility in the vast majority of cases for no additional cost. This is also why anything good never sees a job board as people hire from their own network or from trusted recommendations.
It's a myth that contractors are happy to buy into that they are a specialised resource, sorry, you ain't special.