Getting in to contracting

UrbanBob

Is anyone familiar with full time contracting? I've always done full time jobs and while people say contracting has more risks, as you are not always guaranteed a job, I see that as more freedom to try new things and take time off between jobs ( why do jobs not offer sabbaticals?). I'm currently a linux admin looking to get more experience with devops or security. I am hoping to network with other contractors or experienced recruiters who is familiar with where the trends are going and can offer some insight.

Any advise is much appreciated

scasc

I'm a contractor myself - done it for a number of years, could never go back perm. Originally I went into contracting for the money but then realised that flexibility to do the work you want, when you want is paramount to me continuing. You literally have your mandate and get on with it rather than having to do the usual Corporate BS that people do - back stabbing, politics etc. Go for it and you wont look back.

You work when you need to, get on with your work and leave at 5/5.30 etc without eyebrows being raised. Best thing I ever did.

UrbanBob

scasc said:

I'm a contractor myself - done it for a number of years, could never go back perm. Originally I went into contracting for the money but then realised that flexibility to do the work you want, when you want is paramount to me continuing. You literally have your mandate and get on with it rather than having to do the usual Corporate BS that people do - back stabbing, politics etc. Go for it and you wont look back.

You work when you need to, get on with your work and leave at 5/5.30 etc without eyebrows being raised. Best thing I ever did.

I appreciate your feedback! Glad to know I'm on the right track to perfecting that work/life balance. So tired of working nights and weekends. What are you thoughts on in demand skills or areas to try to get in on? I'm not sure if System administration is the best contracting skill so I am trying to move around a bit

scasc

No problem. I guess demand of skills depend on where you are, but as a rule of thumb I’ve seen cloud, devsecops, security architecture, security engineering and pen testing pay the most due to demand.   

Maybe use your Linux admin skills to launch a career into pen testing? You have the fundamentals. Even cloud engineering which would be amazing and the way to go IMO. 

Check out acloudguru or whizlabs to fine tune your skills and get certified perhaps. I’ve seen cloud ultimately pay the most along with security architecture. 

thomas_

You’ll want to get errors and omissions insurance.

TechGromit

Personally I like the security of a Full Time position. While no job it completely safe from layoffs, in my experience when budgets get tight, contractors are the first to go. While it's not much of an issue when jobs are easily to come by, it's a lot more stressful during recessions when your next gig might be 6 to 18 months away. I was a government contractor for 7 years, from 2006 and into the recession of 2008 to 2013, and while I escaped the worse part of the recession, but was laid off in 2013. Some of my co-workers got on other contracts, but they ended up being very short term, 6 months before they were looking again. I was unemployed for about 4 months before I landed a short term contract that lead to a Full Time  position.  I knew co-workers that were unemployed for 18 months. This experience kinda soured me to the contracting thing. . .  

JDMurray

What do contractors do to replace the full-time benefits (e.g., healthcare insurance, paid vacations/sick leave, 401(k), profit sharing) they are missing out on?

12 Advantages of Full-Time Employment | Indeed.com

scasc

Yep - its true that contractors are usually the first ones out of the door when times are tough, you dont get any of the benefits etc but its all risk v opportunity and how much one is willing to have that variety and pitch for work at the same time. I have found that key skills which are heavy in demand are paying a premium and one can hopefully expect to keep working on projects if they are using these key skills.

No full time benefits so you charge accordingly for taking the risk. You pay out insurance for your business and have to not only make sure you deliver the goods but also make sure you have the pipeline of work. 

I was saying in my previous post that I prefer it like this in that I do my role and leave without having to worry about the typical things one worries about in a perm role. However, appreciate this is not for everyone. 

TechGromit

JDMurray said:

What do contractors do to replace the full-time benefits (e.g., healthcare insurance, paid vacations/sick leave, 401(k), profit sharing) they are missing out on?

12 Advantages of Full-Time Employment | Indeed.com

The biggest issue for me is health insurance. Basically there's three ways to get Medical coverage.

A. You get it from your employer.

B. You get your own individual insurance.

C. You do without insurance and become a cash customer when playing for medical.

The advantages with A, your company negotiates a group rate with an insurance company. So even if the coverage is lousy, The group rate means your cost would be lower then if you obtained you own insurance. Even lousy insurance means that medical professional accept a lower rate than Full payment, generally 40 to 60%.

B. You get your own insurance, using this method, your not getting a group rate, your paying a much higher rate for the same insurance, but even then it's not as good coverage as a group can negotiate. I looked at individual insurance for me and my spouse once, even the $3,000 a month platinum level policy didn't have as good prescription policy I was getting from my employer I was paying about $400 a month for.

C. You go without insurance, in this case, if you have anything medical done, you pay FULL PRICE.This can get very expensive, very quickly, so even crappy insurance that has a 25k out of pocket and 60% co-pay is better than not having anything at all.

i estimate my health insurance is worth at least 20k, if i was doing a contact thing. And that's with the group rate I get, without this group rate pricing, I'd want 40k extra for getting my own insurance.

 

thomas_

@JDMurray - They charge more and provide the benefits themselves.

@TechGromit - I’m not so certain people paying cash pay full price.  In fact, I’ve heard doctor’s are willing to give you a discount because they don’t have to worry about the hassle of billing insurance companies.  Also, there are companies out there that will negotiate your medical bills for you and take a cut of what they saved you.

I’ve often wondered if the the 6k I spend on medical insurance every year would be better off invested on the stock markets over the long term, especially when I only see the doctor a few times a year which pretty much amounts to $2000 a visit.  The only real benefit is if I exceed my deductible in a year which usually doesn’t happen.

Ot would be nice if you could contribute to an HSA without having a HSA-qualified high deductible healthcare plan.

TechGromit

thomas_ said:

I’ve often wondered if the the 6k I spend on medical insurance every year would be better off invested on the stock markets over the long term, especially when I only see the doctor a few times a year which pretty much amounts to $2000 a visit.  

It's a good point. I'm 53 and never been seriously sick. Assuming I paid an average of $300 a month for health care, for the last 30 years, that's 108k, than invested for 30 years, that's 340k, assuming a modest 7% return on investment, almost 600k for a more aggressive 10% return.

But your playing the odds, one major medical procedure can either A. equal death, if you don't have the cash to get that life saving operation, or B. Put you into poverty being burdened by a huge medial bill. While 600k might seem like more than enough cash to cover anything wrong with you, cancer treatment can exceed 1 million dollars. This is of course worse case.    . 

JDMurray

thomas_ said:

I’ve often wondered if the the 6k I spend on medical insurance every year would be better off invested on the stock markets over the long term, especially when I only see the doctor a few times a year which pretty much amounts to $2000 a visit.

It seems if you are paying into the same medical provider for decades, you will get your money's worth when you eventually need major medical care.

From Investopedia:

A study published in the American Journal of Public Health in 2019 found that 66.5% of bankruptcies in the U.S. were due to medical issues like being unable to pay high bills or due to time lost from work.

In the US, bankruptcy due to medical issues is handled differently (i.e., more kindly) than other forms of bankruptcies (e.g., financial reorganization) than can destroy your personal financial credit for years.

Investopedia: 20 Ways to Save on Medical Bills