Reply to: Contract or permie?

[SandyDown]

The we go for a permie role we suddenly start expecting job satisfaction, career progression, team work blah blah blah, the minute we leave and become a contractors again, its freeeeeeedom however tulip is the role/manager/team etc, all we care about is the Keeerching !!

[ourrob]

Contract or Permie

This might be the longest time for a thread to ever be brought back from the death, but you guys gave me a few pointers last time, so I thought I'd update you with my ever going dilema.

After my contract ended I took a very long holiday as you do about 6 weeks around Oz, and NZ, got back obviously to no contract and several messages from perm company I had turned down, asking me if I was still interested....

Nothing materialized on the contract front and as I had a little one on the way, I did the sensilble thing and took the nice and local permie job.

Things are panning out "ok" but my senior management drive me nuts and I myself have became a team leader which means responsibility and far too many meeetings, which is driving me away from the technical role I used to really enjoy.

So I'm now in a permie job for a really good company but in a role I am slowly starting to loathe....

So I'm again in a bit of a bind, do I rejoin the good ship contract, or just hunt for a more challanging technical role...

[MarillionFan]

Dont believe a word of it. You make out your on £450per day and have to ask the question, should I go perm for 42k.

Out Troll Out!

[DodgyAgent]

A good does of Ebola never did anyone any harm. It's lack of exposure to germs that leads to asthma and allergies. Or so they say.

last word

[Fungus]

So it's all your fault then. [and to be fair mine]. You are the guy who keeps coming in when he should be off sick, thus ensuring the entire building gets it....

A good does of Ebola never did anyone any harm. It's lack of exposure to germs that leads to asthma and allergies. Or so they say.

[ASB]

I can't believe those lazy gets who take 10 days a year off sick. In the last 12 years I've taken at most 2 days off sick. No wonder UK productivity is tulipe. FFS.

So it's all your fault then. [and to be fair mine]. You are the guy who keeps coming in when he should be off sick, thus ensuring the entire building gets it....

[Fungus]

The comparison between permie and contractor is basically as follows:

Permie Earnings = Salary + 10% (Employer contribution) + Benefits

Contractor earnings = Daily Rate * Average work days - Travelling expenses.

Now the average works days varies tremendously between contractors, so it becomes a risk take. If you're hradly on the bench you'll earn a lot more than
a permie, if you're on the the bench a lot you lose out, also if you can reduce your travelling expenses, you win.

Basically being a contractor is a risk take, but have the possibility to more or less double your earnings if you're not travelling (common in London) with the risk of being on the bench for months.

I'll buy that. In the last 7 years I've saved a fortune, working the same sort of hours as when I was permie, and spending no more. But I've had almost no enforced rest periods.

I can't believe those lazy gets who take 10 days a year off sick. In the last 12 years I've taken at most 2 days off sick. No wonder UK productivity is tulipe. FFS.

Fungus

[expat]

If you are
a) a senior manager in a big company employing lots of people, then you will find (in an accountancy sort of way...), that 40k salary for a full time employee is roughly the same as 40/hour as a contractor because
... repectful snip

Quite right IMHO. If you want to compare contract and permie on a basis of like for like, then "accounting tricks" are exactly what you need.

OTOH you go contract precisely because you are not like a permie.

[ourrob]

Well the deal is done,

Just called the agency and declined the permie job, not happy bunnies, but life is full of dissapointment so I guess they'll get over it.

Current contract is up at the end of the month, and although I had
a couple of last minute jitters about not having something definite lined up, I thought screw it, I can't take a permie job I'm not all that interested in, just because I haven't got a contract lined up yet.

[BlasterBates]

The comparison between permie and contractor is basically as follows:

Permie Earnings = Salary + 10% (Employer contribution) + Benefits

Contractor earnings = Daily Rate * Average work days - Travelling expenses.

Now the average works days varies tremendously between contractors, so it becomes a risk take. If you're hradly on the bench you'll earn a lot more than
a permie, if you're on the the bench a lot you lose out, also if you can reduce your travelling expenses, you win.

Basically being a contractor is a risk take, but have the possibility to more or less double your earnings if you're not travelling (common in London) with the risk of being on the bench for months.

[XLMonkey]

If you are
a) a senior manager in a big company employing lots of people, then you will find (in an accountancy sort of way...), that 40k salary for a full time employee is roughly the same as 40/hour as a contractor because if you employ lots of people then:
- some of them get sick, on average 10 days a year. The softies
- some of them need training, on average a couple of grand a year. The ignorant incompetent monkeys.
- they want pensions. The grasping gets
- they have unrealistic expectations of getting paid every month, even if the company isn't doing so well. Which is just selfish.
- they take holiday. Holiday ? I ask you
- it costs an arse and an elbow to recruit them. For once, this isn't the employee's fault. But you can blame them anyway, they probably deserve it.
....etc etc (I won't repeat the rest of the previous lists)

but if you are
b) a contractor working for his loansome. Then for some strange reason you find that 40/hour feels like a heck of a lot more than 40k salary because
- you don't seem to get sick as often as the others, perhaps because you don't get paid when you're sick
- you find ways of training yourself that don't involve a semi-paid pissup in the hotel of of your choice whilst desperately trying to get off with the only woman on the course (and yes, she is smarter than you, and no, she isn't interested...)
- you are obsessive (oh yes, obsessive) about watching where all that pre-tax income goes
- you store up savings like squirrels store up nuts for the winter, and only pay yourself what you need, as opposed to what you earn
- you take time off when there's no work, as opposed to when it suits you
- you don't cost an arm and an elbow to recruit.

...which is how, an accountants 40k becomes a contractors 40/hour.

The moral of this story is.
- if you think that you are healthier, smarter and better at managing things than the average permanent member of staff, then go contracting.
- never take an hourly rate less than you think the equivalent annual salary would be divided by 1000 ('cos who wants to make accountants happy?)

and, best of luck ourrob, it's a jungle out there (i.e. full of monkeys)

[ChimpMaster]

Well thanks for everyone replies.

Currently erring on the side of contracting, and this is likely the way it
will go, more probably because I'm unsure the permie job is the one for me.

Will let you know if I have any last minute change of heart

Dear Rob

you may have realised that this thread is no longer about you and has in fact been hijacked by other individuals.

Good luck contracting, I would do the same because if it lasts long enough and you plan your finances well, you will end up in a stronger position in 4 or 5 years time.

[ourrob]

Well thanks for everyone replies.

Currently erring on the side of contracting, and this is likely the way it
will go, more probably because I'm unsure the permie job is the one for me.

Will let you know if I have any last minute change of heart

[Fungus]

Fungus, the fact that you have worked 12 years doesn't mean that you have been through a lot of different experiences, and as much as I can read through the lines, you actually worked only for 2-3 companies. I think I have had more different experiences myself in less than 10 years but working for 10 companies. You seem to be too much biased by your permie long term experience, which is understandable as I have been through that too and I was glad to go contracting. But after a while you realise that it's not gold all that glitters and you start separating the good and the bad with an impartial view. Now, I agree with you that it's hard to find a good permie job when you are a techie but that doesn't mean that they are all bad companies out there and we need to make just one penny more as contractors to say that it's better. I have been through hell in permie and contract jobs, and then again in decent places as contractor and as permie. I just cannot compute what's better if you don't add the values to the parameters. And most of the things you say, that you get more respect, that contracting is a fair world, are only relative to your recent experience, which might or might not happen again. Same applied to permie package and prospects, some are crap some are good, you just can't define them without the proper details. One thing is for sure: contracting needs to add a premium for uncertainty and a premium for the lack of benefits and security. It's not just multiplying the days in the year for the daily rate. You are running a business and you seem to be unaware of that. You can't run a business with emotions and feelings, you will realise that in the long term.

I've worked for 7 companies over the last 12 years, 3 of those as a contractor. I was in research before that for 10 years, in the UK and North America.

What's this mention of recent experience? Isn't 12 years enough? Oddly enough a permie I work with is often on the phone to find a contract. He finds being a permie too stressful. He's not the first contractor to permie I've met who feels that way. The contractors I've worked with are relaxed. I've come across contractors going permie, but only because the job market dried up.

I don't run a business with emotions and feelings. What a ridiculous statement. I am contracting at the moment because it is financially worthwhile (though less so than some think).

At my previous client site I would joke with colleagues that I went contracting because I could not take the insecurity of being a permie. They were laying off permies, and retaining contractors. But they got me in the end.

As a permie I was laid off once, and from what I see of the job market, it is not that secure. I have seen friends laid off, and sometimes the pay outs are quite small.

I'm not saying that contracting is all gold. It will suite some people, and not others. Good contracts can make you a mint, but bad ones, that last 6 months, leaving you to scramble for new work, are not so good. I'm sure that it varies from area to area, technology to technology, and person to person, depending on skills. I have a good academic record and that seems to help me get work, though I am not in the big league by any means. My current contract will last at least a year, and hopefully will go on for 3 years or more. But if I was far outside of the Greater London and Thames Valley areas, then I would be less inclined to contract, as there is less work available, and the risk might be too high.

You might be surprised but I would quite like to go permie for a decent company due to stability and working in an area of my choice. However, when I last looked, I would have found it hard to get £35K per annum, with mediocre benefits. I know as I applied to permie jobs, and was universally told that £40K was out with the exception of one company stuffed full of Oxbridge high flyers (the idea turned me off).

I wish I could get £45K + superb benefits, but such jobs just aren't out there. Or at least I couldn't find any on Jobserve. Where are they? Doing what?

Accounting is a strange art. My last client was not spending money training staff and developing their skill set. Instead they brought in expensive contractors, and one was on £100 an hour. At one time they had 100's on site. They had a weird way of assessing how much someone cost. When assessing a permie, they would allocate a percentage of the overheads e.g heating, HR etc. But when assessing a contractor, they ignored all of that. It pissed off the permies no end. The figure I heard from management in several companies was that a permie on £35K cost about £50K overall. I reckon HR and accounts are having too many expensive parties.

One reason why permies cost more is rather mundane. A contractor is brought in when the need arises, (s)he does the job, and then leaves. The client pays for what is done. No more, no less. A permie is there all the time, even if there is no real work to do. I've seen capable people doing nowt because there is no project for them to go to. And of course if a company gets rid of a permie, there's government regulations to follow, which mean it cannot always be done, and an overhead from redundancy pay. And I've always noticed that contractors on average are more capable than permies (though the best permies are as good as anyone). There's always more than a few permies who are useless, which adds to costs.

Fungus

[DimPrawn]

I still believe that after all the pension, holidays, sick, maternity (for bird contractors), training, company car allowance, medical etc is taken into account the old saying "hourly contractor rate = permie salary in thousands" still holds true.

i.e. £40/hr = £40K + bens, £60/hr = 60K + bens.

Simple as that.