Contractor work?

Hey all!

This is just a curiosity question, as I am currently a full time employee, but what is everyone's opinion on Contractor jobs? They always seem shady to me and I have always stayed away from them. How do you guys get insurance? How hard is it to manage your returns? Do you get treated differently when you don't actually work for a company? etc.

Thanks

Find more posts tagged with

Free for TechExams community: Cybersecurity salary guide

Compare cert salaries and plan your next career move

Button

Comments

Nemowolf

Depends on your situation. We have a contractor currently with us and he was laid off from his job and needed something to pay bills so he started doing contract work. Naturally, he is being strung along until he leaves or they have to do something with him. I have had some very shady recruiters calling for "contract to hire" positions but they slip in "or until the project is completed." You have to build a relationship with your recruiter and trust that they ARE looking out for you because it serves them to keep you happy and working for them.

If your currently employed, you have a bargaining chip when looking for options as it takes more than a shiny contract penny to entice you away from things like regular paychecks, vacation/sick time and benefits.

Depending on the company that is employing you as the contractor, they can offer benefits but it isn't going to be backed by them so you are footing the entire bill. Passing along advise, always expect to ask for a significant increase from what you currently make to do the same work as a contractor because of those unexpected expenses. You also want to cushion for time between contracts.

Sorry for the randomness ... its bed time.

nel

I am currently a contractor. However, that was due to visa reasons rather than by choice. A contractor is not something that is shady by any means. A contractor is usually someone who comes in to complete a specific task(s) for a short period of time, i.e. 6 months. This comes with little job security, short notice periods and small career potential within that project (usually anyway). You are expected to have a specialist set of skills to do the task. However, you are usually well paid for it depending on location and other circumstances. For example, i know people who can make the equivalent of a years permanent salary in 6 months contracting. Many guys i know have done this for a few years, saved for a house deposit and then went back to perm. Some guys like the variety contracting can bring. In all honesty there are positives and negatives to both contracting and perm. Usually permanent positions come with a steady job and lower pay. Contracting brings the risk and higher potential income.

In regards to insurance, there are companies who can provide that for a fee.

On the project i work on we are all contractors - so in my case, i do not get treated any different. However, i rarely mix with the perms.

kurosaki00

I think contract jobs are just like any opportunities.

It depends on your status and what you're looking for.
If you are a help desk full time, get paid 10 bucks n hour but you get offered a contract job for lets say 20$ bucks n hour for 6 months
I'd take the contract job
You need to weight the benefits, salary, what you want to do, your experience
For example someone entry level I think if you have a permanent job should NOT consider contract jobs
because when it ends and if you dont get renewed, it could be hard to find a new job.

Like any opportunity, you need to weight the pros and the cons

apr911

IMO, it depends on what you are looking for in accepting a contract position.

For people just starting out contract positions are a great way to get experience and exposure to a broad range of technologies before entering into a sub-field within the vast world of IT.

For the more experienced among us, pure contracting positions are a lot like consulting. Yes you need to cover your own health insurance, benefits, etc but usually you end up commanding top-dollar which helps offset much of this. You do need to keep aware of which way the wind is blowing within the company, this is true even as an FTE but there is a greater risk as a contractor that you and/or your contract will be on the chopping block if the company is looking to cut costs. And if you are going to do the contract/consulting thing full time you almost always need to be on the look out for the next contract, especially as your existing one approaches its end either due to project completion or term completion (you never really know if the contract will be renewed until your working the new contract term).

There's still plenty to be gained in contracting for the experienced professional but not everyone is prepared to deal with the uncertainty contracting roles present...

The big one that I see a lot of now that I am personally very much opposed to is contract-to-hire positions. For new individuals I suppose it may be a way in the door to an opportunity they may not have previously had a shot at but for experienced individuals I think its too much risk with too little reward.

As a Contract-to-hire you are essentially working without a safety net. There's nothing to stop the company from terminating you at the end of the contract because they got what they wanted and no longer have need for you and since you were looking at this as a potential FTE position, you may find yourself with nothing lined up. Additionally its unlikely you'll command top-dollar because eventually the company supposedly wants to convert you to an FTE and they know its unlikely you'll accept less as an FTE than you did as a contractor. Finally, and this is especially true for companies with waiting periods before benefits kick in since often times contract time does not count towards the waiting period, you'll be without benefits for a longer period of time. Also for companies with seniority, time-in-role promotion requirements and benefits that increase over time a lot of times you cant include your time as a contractor towards these increased benefits (such as ETO), time-in-role requirements and seniority.

To me the contract-to-hire positions always raise the question of "why are you only willing to bring me in as a full-time contractor with the potential to be an FTE and not just go straight to a full-time employee"

The most common response I hear to this is that it gives the company time to evaluate if your skills match what they need and/or if your a good team/company fit but seeing as how all US states follow some form of at-will employment doctrine, its fundamentally flawed. There's nothing stopping a company from letting you go in 6 months as an FTE so why do I need to be a contractor for 6 months?

Nemowolf

apr911 wrote: »

The most common response I hear to this is that it gives the company time to evaluate if your skills match what they need and/or if your a good team/company fit but seeing as how all US states follow some form of at-will employment doctrine, its fundamentally flawed. There's nothing stopping a company from letting you go in 6 months as an FTE so why do I need to be a contractor for 6 months?

That is something i don't understand as well. I am getting calls now for contract positions and ask essentially the same thing of the recruiter and get the same BS answer. I think companies don't want to open themselves to wrongful termination so its easier to just end a contract? I am definitely adding this to my regular set of questions for recruiters now though.

N2IT

Contracting directly to an employer is a good way to get into the door but like many have mentioned there are downsides to this as well. It depends on the situation, agency, etc. If you are just starting off you may not have a choice, dependings what market you are in and the skills you have under your belt.

From a personal level MSP (Manage service providers) scare me off. These for me have been nothing more than chop shops leading many employees to complete burn out. I've seen this happen time and time again.

Recap (Direct contract to a company is a great way to start and usually integrate well with the company) (MSP not so much)***This is just my opinion

Iristheangel

I got hired at my last job after being a contractor with them for 8 months. I'm currently a consultant at my new job as well. I miss getting health benefits paid for me and having a little more job security but my current boss is amazing and I would rather be working here as a consultant than have a permanent job somewhere else. It all depends on where you are contracting to I suppose. It's a great way to get your foot in the door and prove yourself

martaw

apr911 wrote: »

To me the contract-to-hire positions always raise the question of "why are you only willing to bring me in as a full-time contractor with the potential to be an FTE and not just go straight to a full-time employee"

The most common response I hear to this is that it gives the company time to evaluate if your skills match what they need and/or if your a good team/company fit but seeing as how all US states follow some form of at-will employment doctrine, its fundamentally flawed. There's nothing stopping a company from letting you go in 6 months as an FTE so why do I need to be a contractor for 6 months?

I am actually in a contract to hire position right now. It has nothing to do at all with "trying me out." I am in a very high level position and if I didn't "work out", it would be a big deal to find the skill set to replace me. That being said, the reason why they went with a recruiter is that they wanted to find the right skill but for anywhere in the country. In return for doing this nationwide search for talent, the recruiter basically places into the contract that they get their "cut" off of me for 6 months. Yeah, sucks for me and the company... however I did not know anyone in the company and it is a very large corp.

Am I taking a chance that they won't hire me? Yes, however based on what I see going on now, something really bad and unexpected would have to happen for me to not be hired on permanently at the end of the 6 months. It is a rock on awesome opportunity and I got a stupid crazy increase in pay. I'm married and we are a two income/job family so I still get benefits. Works out for me. I don't think I would do the whole pure contract 3 months here, 6 months there thing. Contract to hire is as uncertain as I want to get.

apr911

martaw wrote: »

I am actually in a contract to hire position right now. It has nothing to do at all with "trying me out." I am in a very high level position and if I didn't "work out", it would be a big deal to find the skill set to replace me. That being said, the reason why they went with a recruiter is that they wanted to find the right skill but for anywhere in the country. In return for doing this nationwide search for talent, the recruiter basically places into the contract that they get their "cut" off of me for 6 months. Yeah, sucks for me and the company... however I did not know anyone in the company and it is a very large corp.

Im familiar with the contract-to-hire positions offered up by external recruiters but there's no reason a company cant offer you a FTE position direct through the recruiter. They would have to pay the recruiter the full sum they'd collect over the contract period which is bad if you leave before the contract period is up (there are ways around this) and they are on the hook for unemployment benefits which is bad if they let you go. Truth be told its not so the recruiter can get their cut but rather so the company can cover their a**.

That said, Ive seen contract-to-hire positions posted on company employment sites and even have received call from internal recruiters offering up contract-to-hire positions which I cant explain at all.

This article:
Tech Companies Favor Contract-To-Hire Workers- Try Before You Buy | Dice Blog Network

Defends the practice of contract-to-hire but whats really telling to me is:

"of the IT contract jobs listed on Dice.com, 27 percent were for contract-to-hire positions."

Im sure a lot of those are jobs posted by recruitment firms but at least a few are probably in-house HR/IT departments trying to hire someone contract to hire.

This article:
Contract to Hire: The Real Story

Follow closer to my opinion of the contract-to-hire positions...

To be clear, Im only against positions that are pushed as contract-to-hire positions as they are trying to lure you in with the promise/offer of potential full time positions. If you decided to take a pure contract position with a company and at the end of that contract the company wanted to bring you in full-time, I would have no problem with it. The difference being, you went into the 2nd situation one expecting with no illusion or expectation that a job offer would be coming. In the 1st situation, no matter how much you may prepare for the possibility of not being taken on full-time, the fact remains they likely lured you into a position you otherwise would not have taken assuming you were looking for FTE.

martaw

Yes, contract to hire is a risk.... Though the article link above says that is less likely if you were given an actual contract length (90 days or 6 months). That is the situation I am in. At my previous company NO ONE was ever hired direct unless they came via someone already working for the company. Back there, the typical length was 90 days to hire and pretty much everyone was always hired on unless they really stunk. I didn't hear about any switch around sorry we decided to not permanently fill this position mess.

Again, contract to hire is a risk but some companies just do it that way these days like my current and previous employers but still plan to hire.

PsychoFin

Over here in Europe, we have probation periods of 3 to 6 months before you are signed on as a permanent employee. That's always how it works here. Contract to hire are often the norm, and looked at as being the same as a probation period. Benefits are the same as well.

lsud00d

The contract I'm on has been going for over 10 years after 4 RFP's and will be extended until 12 years as of now.

There are companies that are built upon contracting people out like Deloitte etc who provide you with full benefits and job placement, and if you are a good employee they will go the extra mile to transition you to other contracts to ensure steady employment.

coreyb80

I received a phone call yesterday about a contract to hire opportunity. I would consider it if offered because he advised me that it would 3 or 4 months and then I would be hired. He said that they've hired any employee they've sent over unless the employee was a bonehead.

Nemowolf

So throwing in a quick update from me; i actually got a call from a IT sourcing company. They aren't recruiters per say but they source individuals that work for them on contract to support the hardware and software they provide. Now this is an odd one which is why i mention it and to see if anyone else has some feedback since its right in line with this thread ...

This is a contract for X company that is in partnership with Y company. The contract is with X but i would be working with Y company. And to clarrify, this is not me working as a contractor for the contracting company but two additional companies. They are building up a new office and expanding personnel in this area.

Anyone had this kind of situation?

About7Narwhal

So, you work for company A providing a service to company B? I worked like that when I was with SAIC. Contract to hire W2 for SAIC providing technical support for Toyota. Just keep in mind that there will be two sets of company policy you will have to memorize and follow.

W Stewart

It really depends on the type of work. I work full time but have a friend who takes contract jobs as a linux admin and he gets paid somewhere around 30-40 an hour. Right now I believe he is working for disney. As far as taxes it depends on whether it's a real 1099 contract or just a temp position. If it's a 1099 then you have to file your own taxes although I'm not entirely sure what documentation you would need to use.

pert

One thing I never understood about contracting: For people on the lower end of the salary spectrum, how can you afford the risk or gaps between contracts? For people on the higher end of the salary spectrum, why not just be an independent consultant and pocket the money that was going to the recruiter?

WiseWun

Most of my friends/classmates are contractors and they wouldn't accept a perm position even if you payed them 6 figures. One thing they all have in common is that they are a specialist or SME in one or two particular areas such as routing or voice. You always worry about the next contract but if your able to build relationships and do a good job, usually it gets extended. Also with contracting, you get to work on the latest projects and cutting edge technology.

Nemowolf

pert wrote: »

One thing I never understood about contracting: For people on the lower end of the salary spectrum, how can you afford the risk or gaps between contracts? For people on the higher end of the salary spectrum, why not just be an independent consultant and pocket the money that was going to the recruiter?

Boggles my mind too. I couldnt afford gas and lunch on what some of these recruiters are calling me for, hell hardly pays for my cell phone minutes! I am amazed at how low some recruiters are looking to pay when they want admin qualifications doing basic desktop/help desk support roles. What graduate with a BS, 5+ years of experience and industry certs is going to be okay making 16 bucks an hour in California?

WiseWun

California is very competitive from what I hear. I tend to stay away from recruiters, never dealt with them as I always go straight to the source.

About7Narwhal

Nemowolf wrote: »

What graduate with a BS, 5+ years of experience and industry certs is going to be okay making 16 bucks an hour in California?

I too have been seeing a lot of this. Extrememly advanced skill requirements for a basic job with sub-par pay. I just don't get how people are working those conditions and living at the same time.

WiseWun

That's the problem. If people stop accepting these low paying jobs, rates would probably go up and recruiters would think twice. There will always be someone who will work for less.

coreyb80

I just got off the phone with an agency hiring for a company. Everything was going great till he told me the pay. He said the pay was $40K annually along with profit sharing, which was fine for me since I have no experience, but then he says that I would only be paid $14/hr for 6 months. Call was over at that point. If I was single and much younger then sure, but the commute alone made it not worth $14/hr.

Nemowolf

coreyb80 wrote: »

I just got off the phone with an agency hiring for a company. Everything was going great till he told me the pay. He said the pay was $40K annually along with profit sharing, which was fine for me since I have no experience, but then he says that I would only be paid $14/hr for 6 months. Call was over at that point. If I was single and much younger then sure, but the commute alone made it not worth $14/hr.

Seriously, you can make more than that working at Starbucks with full benefits and tips.