Reply to: Question from a newbie

[ContractIn]

The idea is you earn enough to save 6 months backup money, so you dont have to worry too much about on the bench time.

Money is in the bank. The gap in CV would be more of a concern.

[Diestl]

The idea is you earn enough to save 6 months backup money, so you dont have to worry too much about on the bench time.

[ContractIn]

Sorry but I don't agree with this attitude. What's the point? He has just spent a couple of minutes asking for opinions. It doesn't mean that if you listen to somebody else experience you are not a risk taker or uncapable to stand on your feet. Indeed, I see it as a note of intelligence.



I use to agree with this rule, not any longer. Indeed as permie you tend to spend all your salary lulled by a false sense of security while your a55 is on the line just as much as a contractor. And in reality if you are a top paid permie you are probably the first to go. Huh, and let's not forget that every company will believe that you don't deserve to have a personal life because you are one of the highest paid permie in the lot, so expect to be backstabbed by most of your colleagues and be sent to anywhere else in the world just for pleasure.

Second paragraph is spot on in my experience. I'll give you two examples. When I was last a permy, I was a senior manager, and got made redundant (after 5 years). A lot of the contractors remained as was working on programmes that had to be delivered/finished. Being made redundant was the push to start contracting. I was fortunate to leave permy role on a Friday, take a two week break, and then start what turned out to be a 12 month contract. Within my first month of the contract the company laid off 10% of its IT workforce, as I was assigned to a project stayed on-site for a further 11 months. I was offered an extension of 5 months, but declined as….. I am now back at company where was a permy, coming towards end of a 12 month contract which is to be renewed for a further 6 months. The ironic thing is the contractors I left behind two years ago are still here!

Saying all this, I am not looking forward to the point when I am out of work for a length of period, and I know it will come, when it does, if an £80k permy role was on offer, then I would take it. However, for now I am happy to remain the mercenary contractor!

[EternalOptimist]

If it was me I would take both. I would do the contract remotely from my permie desk and then visit the client at lunch hours and holidays. I would get the proceeds and invest in a stock that is going up and make loads of money.
In addition I would marry a rich model and sh@g her to death then inherit her fortune.


HTH

[tim123]

But, responding to your question on its own terms, the general rule of thumb is that you divide the annual permie salary by 1000 to get the equivalent hourly rate that you would need as a contractor. (Actually, that's Malvolio's rule of thumb but he always gets it wrong by a factor of ten).

No, no, no. The rate is what the equivilent job would *pay*.

Whether it's what you need, depends upon other factors (like how much down time you expect). Usually, someone on 80ph is much better off than someone on 80K pa. But 80ph jobs are hard to find and being 100% employed at that rate will be difficult.

tim

[Betty]

Dry cleaning will be outsourced too. Clothes will be shipped in huge cargos and sent back 2 days later cleaned. All this at cheaper prices.

Yes, I have thought about that. You need to have a Panamanian registered laundry ship with Vietnamese workers on board and the ship anchored in the North Sea off the twelve mile limit.

[lukemg]

Get the jobs first then consider the decision, the float has just dipped below the water, you are nowhere near landing the fish.
If I had both on offer, I would consider the companies involved, location, people you are working with, work you will be doing (will this be a stepping stone internally/externally), training, possibility of contract extension etc
Then I would ask for 650 a day and when they said no I would take the permie job. If they said yes I would do the contract - easy.

[hugebrain]

Dry cleaning will be outsourced too. Clothes will be shipped in huge cargos and sent back 2 days later cleaned. All this at cheaper prices.

You're right, he should open a sandwich shop instead. Can't outsource them, they'd go stale.

[Bright Spark]

I would definately go for the permie role if money is the only factor.

£550/per day take £100 p/day off for potential bench time when contract finishes which makes your real daily rate = £450 p/day

£450 * 240Day = 108k * 0.6 (Tax In IR35)= 65k take home
£80k * 1.1 (Bonus 10%) = £88 *0.6 (Tax) = £52k take home

The difference is about 13k if you factor in holidays, Training,BUPA..etc the
permie role works out better, given the risks involved.

I guess if you can take the contract outside IR35 then it's worth contracting based on the money.

[Francko]

I definitely don't think you should take the contract role. Maybe not the the permanent one either. Computing has no future, why not try doing something like dry cleaning instead?

Dry cleaning will be outsourced too. Clothes will be shipped in huge cargos and sent back 2 days later cleaned. All this at cheaper prices.

[hugebrain]

Hi All

Been reading the boards for a while, need a bit of advice. I'm sure similar questions have been asked before but its always nice to intro yourself a bit

Basically I'm currently in a perm role at - looking to move on for a few reasons. An agent has set me up for an interview for a 6 month contract role paying £550/day, and another has set me up an interview for a perm role paying £80k+. Now I'm on a months notice, but the agent has assured me that the contract client will wait, which I'm a little wary of...

Now one of the main reasons I'm interested in contracting is basically the tax benefits. But then again, the £80k permie role includes a great package. Bit unsure as to which path to take, can anyone enlighten me on the best way to go with some valid reasons if poss! For the record, both roles are similar and working in the same industry sector.

Thanks a lot!

IH

I definitely don't think you should take the contract role. Maybe not the the permanent one either. Computing has no future, why not try doing something like dry cleaning instead?

HTH. eom.







I can't remember if this is Catbert's or Ratbert's advice, but either way it should reduce the competition for us and increase the competition between dry cleaners, leading to lower suit cleaning prices. A win-win. Remember this next time the Newbies ask for help.

[Paddy]

“Basically I'm currently in a perm role”.

That tells a lot. If you are in the 80k band you would not call your position a “role”. You are obviously a Walter Mitty character and if we divide your figures by two or three it may show reality.

[Francko]

If you are going to have a successful contracting career you need to have the right mind-set. That you are asking this question suggests to me that you don't.

Sorry but I don't agree with this attitude. What's the point? He has just spent a couple of minutes asking for opinions. It doesn't mean that if you listen to somebody else experience you are not a risk taker or uncapable to stand on your feet. Indeed, I see it as a note of intelligence.

In this case, £80,000 salary would equate to £80 and hour or £640 a day, so if you want to think of it on a purely financial basis, then the permie job is better

I use to agree with this rule, not any longer. Indeed as permie you tend to spend all your salary lulled by a false sense of security while your a55 is on the line just as much as a contractor. And in reality if you are a top paid permie you are probably the first to go. Huh, and let's not forget that every company will believe that you don't deserve to have a personal life because you are one of the highest paid permie in the lot, so expect to be backstabbed by most of your colleagues and be sent to anywhere else in the world just for pleasure.

[Sockpuppet]

I'd take the contract.

At 6 months its £99,000. Say even if you are IR35 work six months, take 6 off and be happy.

[IH33]

Hi everyone, thanks for the great replies

Basically with my situation - money is the main drive (isn't it for most people? :P). I've not been contracting in the past, hence the questions (yeah yeah, another permie trying to go contract - sorry!). A friend is contracting on similar rates on offer to me and says he takes home a fair amount (well, more than what I take home after Mr Blair takes his cut!).

I have 2 telephone interviews set up as I mentioned earlier (1 is tomorrow!) and the other towards the end of the week - I guess the picture will become clearer once I actually speak to the clients themselves. Just out of interest for the agents on here - when you have a candidate on a months notice, how many clients do you have that will actually wait that long??? (for contracts that is).

Thanks again
IH