Reply to: Advice for a beginner; contract offered but no idea if its good?!

[psychocandy]

Insane work ethic?

Cant even remember what I was like when I was 22. Perhaps i was like this too.....
One piece of advice I would give is - Remember, its only work.

[lukemg]

I would strongly advise you to stay where you are. Consultants get a bad press but a few years at one says a lot on a CV, like you can work damn hard and will go anywhere. Training tends to be top notch too and future clients will see this as something they can benefit from. You leave - you couldn't hack it. Plus- looks like you are doing junior work at the moment, I would wait till I had been doing more senior work as a better entry position to the market (or prepare to stay at the low level for your contracting career).
Don't underestimate the client and internal contacts you can get there too. Mate of mine bounced out of 8 years at a consultancy into an 850/day job + expenses and friday from home because the CIO at the clientco was his ex line managers boss (he considered him a bargain as usual cost was 1500/day !!!).
200 aint enough to chuck all that in, bide your time, network like crazy and if you are any good you will be very glad later that you didn't jump into this.

[SueEllen]

Sure thing. Is it true baout the £10-£15 umbrella co. fee anyway?, or should I expect to pay more?

Have a look at the websites of the like of contractor umbrella and parasol (google them) for price information.

[odm]

Don't worry your head about all this stuff.

If they refuse to offer you more money for the deal then as the rest said stay in your current permanent role.

Sure thing. Is it true baout the £10-£15 umbrella co. fee anyway?, or should I expect to pay more?

[SueEllen]

Thanks for the info. What's a factoring service?

I was under the impression that Ltd is the best way to do to maximise £££. Is ittrue that an umbrella co. only takes £10-£15/month for the trouble of sorting everything else out for me? (This is what I was told by HR) - sounded low from the outset, but maybe it's the going rate.

Don't worry your head about all this stuff.

If they refuse to offer you more money for the deal then as the rest said stay in your current permanent role.

[odm]

a factoring service.

Thanks for the info. What's a factoring service?

I was under the impression that Ltd is the best way to do to maximise £££. Is ittrue that an umbrella co. only takes £10-£15/month for the trouble of sorting everything else out for me? (This is what I was told by HR) - sounded low from the outset, but maybe it's the going rate.

[stek]

1) Why does the agent get a cut? I found myself the job, interviewed, and got the offer. The HR dude only contacted me to tell me the good news, why should he get a cut?

2) Is it that difficult to get paid? Thought it'd be straight forward, like a salary almost?

3) So would you advise to not go for it or to go for it?

I meant that the 200pd wouldn't be including a agents percentage. If it was through an agent you'd expect the rate to be higher prima face. Actually I'm not sure what I meant there, forget point 1!

Point 2, almost certainly will be, part of the agents percentage is spend endlessly chasing payments which he effectively factors for you, ie pays you up from without money from the end client. Without that you're up again chasing the money from the clients accounts dept, which you can't realistically do during the time you're actually working for the client, so when can you do it? Out of hours? Weekends? Not really, accounts dept is strictly 9-5. Beleive me an an ex-accountant we'd invent all sorts of reasons not to pay or at least squeeze another 30 days of your money being in our account;

1. The directors not in to sign
2. Oh, you just missed the BACS run, next one is in 28 days time, let's hope you don't miss it again!
3. BACS system is down

It's certainly not automatic and certainly not like a salary.

3. I'd go for it, for more money though, and either use an Brolly or pay for a factoring service.

[odm]

In that case 200pd is very low, without the agents cut and leaving yourself to do all the paperwork and money chasing its probably an effective 120 pd rate. Don't assume they will pay on time, more like 60 days and then you have to be on their backs constantly...

1) Why does the agent get a cut? I found myself the job, interviewed, and got the offer. The HR dude only contacted me to tell me the good news, why should he get a cut?

2) Is it that difficult to get paid? Thought it'd be straight forward, like a salary almost?

3) So would you advise to not go for it or to go for it?

[stek]

When you say 'agent', are you under the assumption that I'm negotiating through a recruitment agency? Again, could be due to my lack of experience, but the person I'm negotiating with works for the company who'll give me a job (although they might themselves be contracted in from an external company).

In that case 200pd is very low, without the agents cut and leaving yourself to do all the paperwork and money chasing its probably an effective 120 pd rate. Don't assume they will pay on time, more like 60 days and then you have to be on their backs constantly...

[odm]

If you ask for a crazy rate then one day you just might get it. I know it's worked for me and I've managed to get contract rates that left me shaking my head in disbelief when I realised what I'd done. If you don't ask then you ain't gonna get it so harden up. The only way to learn is by doing it.

Tell the agent you want £300 or no deal. Don't be afraid to let an opportunity go - and with your permie job to fall back on you can afford to be picky and you aren't "left with nothing".

If you can't do some hard negotiation when you are safe in a permie job then you have no chance when you are on the bench unemployed between contracts.

When you say 'agent', are you under the assumption that I'm negotiating through a recruitment agency? Again, could be due to my lack of experience, but the person I'm negotiating with works for the company who'll give me a job (although they might themselves be contracted in from an external company).

[Wanderer]

Thanks for this. Well I'm currently on £30k+ in my permie role, plus my benefits are those you'd find at a Big4 firm. Not too experienced with negotiations; tried it and it came across as 'take it or leave it' - is this normal? I'd feel really stupid if I asked for higher, risked it, and didn't get it; I'd essentially be left with nothing

If you ask for a crazy rate then one day you just might get it. I know it's worked for me and I've managed to get contract rates that left me shaking my head in disbelief when I realised what I'd done. If you don't ask then you ain't gonna get it so harden up. The only way to learn is by doing it.

Tell the agent you want £300 or no deal. Don't be afraid to let an opportunity go - and with your permie job to fall back on you can afford to be picky and you aren't "left with nothing".

If you can't do some hard negotiation when you are safe in a permie job then you have no chance when you are on the bench unemployed between contracts.

[odm]

£1500 p/d is what the consultancy charges the client and for a junior consultant (given your age) that is very high. Still if they can charge you out at that rate and get you billable then something is going right for them as I won't pay that amount!

As a comparison pre-recession IBM were charging the government around £1000 p/d for experienced IT consultants and £1500-2000 p/d for director/partner level.

No idea how its all calculated in the big picture. That's as low as it gets for the place I'm at now anyway, it's only upwards in terms of rates. Either way, its not what I'm paid, just what I'm charged out at.

[SueEllen]

22

That explains the low rate more than anything else.

While ageism is illegal people do pay you on your years of experience.

[ChimpMaster]

22 and earning over £30k? I would stick with that if I were you, especially given the deteriorating state of the economy.

It's not worth jumping for £200/day because, personally, I don't think the risk/reward scenario is attractive enough. You could be out of work at any time in a contract, and you may not learn enough to make the jump into your next contract. Even if you got 11 months at that rate, it's only just over £45k, and you have no paid holiday, pension, sick days etc etc.

Be warned too, that if you start on £200 then at renewal time you'll be lucky if they give you much more. You'll have to jump to another contract to get the bigger rate increases. But again, you don't have much experience...yet.

Get a few years' experience under your belt, ride out the recession in your permie job, and then come out contracting at a more senior level. In the City, rates around £500/day are probably the norm; as a BA or PM you could probably command £700 quite easily in London. But - you need to be experienced in what you're sell.

[redgiant]

Where I'm at now, my day rate is approx £1500/day; granted, I don't see much of that (I'm only 22).

I am worried, not sure if they're taking me for a ride, of this is the ceiling, or if there's another motive that I haven't yet picked up on.

£1500 p/d is what the consultancy charges the client and for a junior consultant (given your age) that is very high. Still if they can charge you out at that rate and get you billable then something is going right for them as I won't pay that amount!

As a comparison pre-recession IBM were charging the government around £1000 p/d for experienced IT consultants and £1500-2000 p/d for director/partner level.