Employee or an independent contractor?

Sie

Just wondered on peoples thoughts and the Pro's & Con's.

Im sure there are many people who wonder which is better and thought this could help them get some perspective.

ULWiz

For most people a contract is almost the same as being an employee. I say this because most contractors turn in to actual employees once their contract is completed. So the only pro with being an employee is that your not on a contract and the best thing about being a contractor is that you can prove yourself and become an employee.

Sie

I agree with that.

Ok then I mean something different by Contractor. Lets say Freelancer? Consultant? etc.

ULWiz

Much tougher thing to get into. Maybe someone who has done this can comment on it.

tpatt100

If you mean consultant where you work different projects for different companies? Or do you mean a 1099 or W2? I know I got called for a 1099 once for a 1 year project doing firewalls. I was wondering why the pay was over a hundred an hour after I did some googling. I don't want to mess with handling my own taxes and SS.

blargoe

Completely subjective. The answer completely depends on personal circumstance. Not a matter of "which one is better", just which one of better for YOU.

For me, curcumstance dictates that I maintain permanent employment. But career wise, I'm at a point now where I would certainly make a lot more money contracting, but I'm not in a place where I can travel a lot, and I NEED the security right now.

indyodie

I have to disagree with you. At least in the NY/NJ metro area...I have been working as a contractor for almost 5 years with 2 different companies and have never been offered a position as a full time employee and none of my co-workers have either. If performance was an issue they wouldn't keep renewing our contracts every 6 months. I think it has more to do with money. They would have to buy out our contracts from our consulting firms and then still pay us on top of that.

I've done the independent contractor route as well and that is much more difficult and requires a lot of patience and most likely a substantial savings account. It takes time to build up your client base and often times companies are bad with paying on time. There were times I had to carry almost $10,000 in debt while waiting for payments. It can be very rewarding but very stressful as well.

Turgon

Been an independent contractor over 5 years now. I like it and voted for that. It's 6 to 1 against at the moment though

Sie

Turgon,

What is it you like and is there anything you miss?

Is it a personal choice or a means to an end?

Just trying to gather some insight for people.

Sie

blargoe wrote: »

Completely subjective. The answer completely depends on personal circumstance. Not a matter of "which one is better", just which one of better for YOU.

I agree it is a personal choice just looking at the reasons why people choose it. You say you would make more money contracting, is that the only motivation you have to do it or do you have other areas you feel are better?

Some people may be on that fence at the moment with jobs how they are and 'food for thought' has never hurt.

laidbackfreak

I've worked as both an employee (as in my current role) and as a contractor previously here and elsewhere.

For me I much prefer the contractor role, it gives me a sense of control over my career and destiny.

As an example If I want a training course, I pay for it and claim it (providing its a legitimate expense) rather than try to persuade my employer to pay for it and have to justify why I believe it will be of benefit.

If I want time off longer than say 2 weeks I can take it, ok I may not get paid for it but the higher rates I get usually compensate.

There are benefits to being an employee such as paid leave, sick pay etc but not one's that I consider to be of benefit to me.

Now of course the last 12-18months have changed that slightly with competition for roles a lot higher and rates lower.... but that will change again, this isn't the first down turn I've been through

blargoe

Sie wrote: »

I agree it is a personal choice just looking at the reasons why people choose it. You say you would make more money contracting, is that the only motivation you have to do it or do you have other areas you feel are better?

Some people may be on that fence at the moment with jobs how they are and 'food for thought' has never hurt.

The reasons given by others (ie flexibility) would be the other potiential "pro" for contracting for me.

rsutton

I am both an full time employee and a contractor on the side. I have mixed feelings and I would not have a problem completely doing one or the other if the right things were in place. These are how I personally weight things:

Full time Employee Pros:
Company pays for benefits - big one for me and my family
Steady paycheck until they fire me
Company pays for training

Contractor Benefits:
Much better experience
Potential to pay more
More flexibility - able to work remotely for almost everything

Full time cons:
Can get cut anytime due to things very much out of my control
Supporting one environment can get monotonous
Having to stick to a 9-5 schedule
"office politics"

Contracting cons:
Finding enough work (this is a potential con)
Paying for bens out of pocket
While not having to work 9-5 I end up working lots of late hours & weekends, not always bad

mikedisd2

rsutton wrote: »

Full time Employee Pros:
Company pays for benefits - big one for me and my family

Really? What kind of benefits do you get?

rsutton

mikedisd2 wrote: »

Really? What kind of benefits do you get?

Medical, vision, dental. Pretty much the standard package.

Sie

Sounds like its:

Stability vs Flexability?

tpatt100

Yeah benefits if your a contractor are usually way more expensive than if you are a direct hire. I interviewed for a position a couple of weeks ago and family medical was 350 every two weeks just for medical, my wife pays 125 every two weeks for medical, dental, eye, legal, disability insurance, etc.

My last job medical was about 250 every two weeks with dental and I was a contractor. I had vacation and 30 days paid military leave since I am in the Guard.

My new job since I am a direct hire for corporate has medical, dental, eye, legal, disability, compensation for fitness club membership, tuition reimbursement for a bachelors or masters as long as it pertains to my job, paid training, etc etc.

Benefits are expensive but in the IT field contracting is almost the only option in many areas.

UnixGuy

you raised a lot of good points, which I agree on.


But I want to comment on this one:

rsutton wrote: »

..
Full time cons:

Supporting one environment can get monotonous
..

This is true, unless you work a service provider, ISP, Business partners, vendors, ..etc. Where your company is an IT company that supports a lot of installations. You will get exposure to lot of sites and setups which should ideally mean more experience in shorter time.

eMeS

IMO, this is the wrong question. However, if it is the right question for you (the Royal "You"), then it doesn't have a "right" answer.

Whether you are a permanent employee or an independent contractor you are:

1) Selling something (technically, we're all in sales in our careers) with finite capacity and a finite lifespan, yourself. Therefore potential earnings are limited.

2) Providing services to someone else at a rate they are willing to pay. People are concerned with their bottom line, not yours.

I don't want to give the impression that I have this totally nailed or anything, because I do quite a bit of work on a contract basis. However, my preference is to sell services on the basis of results and not number of hours, days, etc... Additionally, I prefer to not sell myself and my skills as much as I would prefer to sell a capability, meaning that who physically does the work is irrelevant.

Consultant or not a consultant is irrelevant. One can be a consultant and be a full time employee, or one can be a consultant and work on a contract basis. Consulting is simply providing professional advice. Contracting refers to an agreement to deliver some work, product or service.

This is an older, but relevant book about this very topic: Amazon.com: Million Dollar Consulting: The Professional's Guide to Growing a Practice (063978533747: Alan Weiss, Alan Weiss: Books

MS

homerj742

eMeS wrote: »

IMO, this is the wrong question. However, if it is the right question for you (the Royal "You"), then it doesn't have a "right" answer.

Whether you are a permanent employee or an independent contractor you are:

1) Selling something (technically, we're all in sales in our careers) with finite capacity and a finite lifespan, yourself. Therefore potential earnings are limited.

2) Providing services to someone else at a rate they are willing to pay. People are concerned with their bottom line, not yours.

I don't want to give the impression that I have this totally nailed or anything, because I do quite a bit of work on a contract basis. However, my preference is to sell services on the basis of results and not number of hours, days, etc... Additionally, I prefer to not sell myself and my skills as much as I would prefer to sell a capability, meaning that who physically does the work is irrelevant.

Consultant or not a consultant is irrelevant. One can be a consultant and be a full time employee, or one can be a consultant and work on a contract basis. Consulting is simply providing professional advice. Contracting refers to an agreement to deliver some work, product or service.

This is an older, but relevant book about this very topic: Amazon.com: Million Dollar Consulting: The Professional's Guide to Growing a Practice (063978533747: Alan Weiss, Alan Weiss: Books

MS

I've also read a few of Alan weiss's books. I suggest anything thinking of getting into the consulting field to read them too!