Moving from a Permanent Position to Contract Work?

duncan bayne asks: "I'm sure many developers in salaried, permanent positions have been tempted by the self-management, flexibility and higher pay that are the perks of being a contractor, while at the same time looking nervously at the uncertainty and irregular income. So, to all those in the Slashdot crowd who've made the change - what was it like, was it worth it, and what advice can you share?"

Comments

Clarification

[rackhamh]

Contracting isn't exactly self-management. Many companies prefer to do all project management themselves and simply treat contractors as implementers.

Re:Clarification

[IDkrysez]

More likely self-management in terms of employment regulations -- IIRC, if you're a contractor then your employer is not allowed to define the hours of when you work or don't work; they can only define milestones for your progress and set times for meetings they need you to attend.

You should get paid more, and have more freedom in this sense... and you'd need to be self-managing in terms of making yourself get the work done :)

If you're lucky, you might've found a job where you can pretty much set your own hours anyway -- i.e., if your employer trusts you and believes that you're more efficient and happy when working when you *want* to, then whee! Benefits of regular employment are nice, I do contract work on the side... and thus I've lost all freedom! ;)

      -borg

Re:Clarification

[rackhamh]

IIRC, if you're a contractor then your employer is not allowed to define the hours of when you work or don't work
That may be; I don't know the legal side of it. But in practical terms, on projects that require interaction with business groups, you will be working the same hours that they do. Furthermore, some companies will require that you work on-site, as a means of providing secure access to company resources -- which will also limit your working hours.

I'm sure it's possible to build up a consulting business that avoids this kind of situations, but you may have to turn down some lucrative jobs to maintain such standards.

Re:Funny you should ask

[winkydink]

They can also tell you that today is your last day for no reason at all. Or worse, call you after you've left for the day and tell you not to come back.

It's a mixed bag

[TrekCycling]

I've been contracting for a couple years ago. I've discovered that contractors often get brought on board often to organizations that either are experiencing unmanagable growth or are stuck in the mud because of problems with business process. So it can be frustrating. But the money is better and it's nice to know that you can take a couple weeks off here and there (assuming you save your money, etc.).

I think it's really a lifestyle thing. I like being permanently (although that word is a joke in this market) employed from the standpoint of working on the same project and getting some momentum for a while. But I don't have kids. Don't have a mortgage, so that's really the only advantage to me. That and if you like your co-workers a lot and want to stick with them. Those are reasons I'd rather be permanent.

Not much help, I know. Like I said, it's a mixed bag. Permanence is about more than just stability in work. It's about stability in what you do, stability in who you work with. And depending on if the job is boring and if you like your co-workers this can either be a plus or a minus. I'm just glad I have the financial flexibility to make that choice and not worry (as much) about the financial end of it.

Job security does not exist anymore

[teutonic_leech]

You actually might be better off - there are plenty of opportunities out there for talented contractors these days, especially senior people. The money is better, but you need to probably incorporate yourself to properly 'play the system' IYKWIM ;-) Bottomline is that you can probably make up to 30% more/year being a consultants, but bear in mind that you also need to buy your own health insurance, pay for your own 401k etc. So, don't be timid when negotiating your rate - if you have been making $100k/year in salary you probably should ask for at least $60/hr as a consultant, otherwise you're probably just break even or even wind up not making much more. BTW, that estimate consider approx. 3 months of no work per year. Good luck!

Re:Funny you should ask

[eln]

since I'm contract I can hit on the hot workers at my workplace without having to worry about any side effects.

How do you figure? You can get sued for sexual harassment whether you're an employee or not. You can also be released from your contract for violating the employer's rules of conduct while you're in their building.

Also, basically all CEOs and upper level management are on contract. They may draw a salary, but you can bet they have contracts spelling out things like severance pay and bonus structure.

Re:I went the other way

[PCM2]

Paying Social Security at 1.5 (then) times the rate everybody else was, paying 2.5 times what everybody else was for medical insurance

Um, you realize that you're paying the exact same taxes you were paying before, right? It's just that before your employer would pay a portion of what the government wanted. Now you have to pay it all, because you are the employer. The plus side? You get to keep all the revenue -- minus, of course, the part that you set aside to re-invest into your business. But that's a whole 'nother story. If you can't even figure out your taxes, or hire an accountant to take care of them for you, and you don't know how to charge enough that you cover your costs, then maybe contracting really isn't for you.

Re:the good, the bad and the ugly

[2Bits]

I did it for one year, almost ten years ago. It sucked, especially for #6 above. As a contractor, you are considered a code monkey, you are not involved in any part of the project except coding, fixing other people's bugs, and testing. Well, it makes sense, which company is stupid enough to let contractors do the core?

I was contracting at BNR (Bell Northern Research, in Ottawa) once, for 6 months. My main work was to fix bugs and maintain two 2-year-old modules of the Magellan ATM switch. The Magellan switch (at the time) had a nasty problem in the back plane design that it could not handle two-way connections, you had to use 2 one-way connections to simulate a two-way connection to make a call. To make a call, you have to go thru a grid of back planes, and you had to take care of state management in HW redundance, etc, which greatly complicated things. The employee who implemented the 2 modules for billing didn't understand it or didn't have experience, it was a classical example of spagheti code. There were at least 3 emergency calls from customers every week. I could've lived on that contract for at least 2 years, if I just fixed an urgent bug a week (which reduced the response time to 1/3 already), and the manager would be really happy.

But I was so efficient in fixing bugs that the group manager kept loaning me to other groups to fix bugs, and made quite a bunch of money on me (each group had internal budget). At the end, with the manager's approval, I just rewrote the 2 modules.

The work was no fun, and you are considered outsider all the time. The group manager was nice enough to invite me for group activities (which was an exception), but you are not allowed to participate in core works. You know full well that you could do a better job, but you have to implement some really lousy design.

And there's no chance for you to get promotion, regardless of your work.

So, if you don't mind the ugly codes, the no-fun work, being considered an outsider, no way to feel being part of a team, no chance for promotion, and if you are disciplined enoguh, etc, then go ahead.

Being part of a team is the fun part, regardless of office politics. You won't have that feeling as a contractor.

I've no choice but to consult!

[TheTiminator]

Being in my late 40's, it's almost impossible for me to find a technology or programming position with an established company. I'm either too old, too set in my ways, will want too much money, over experienced, too primadona, or too close to retirement age to be of any consideration compared to the 20-somethings out there. And since I don't want the headaches or want to play the politics of a management position, I'm basically forced into becoming a freelance consultant. With that in mind - I love it! I make my own hours. True, I usually work 60+ hours a week. But, I get to choose to take a morning off now and then without having to ask anyone for permission. Yes, the financials are a bit of a nightmare, but once you get the hang of it and keep track of every cent made, and every receipt, then it's not so bad. Also, if you have a lot of experience in a specific area of technology, and you have a knack at writing then you could also look at writing articles and books. Between writing and programming, I'm managing to keep pretty busy.

Speaking as someone who has done both...

[PsiPsiStar]

Working for myself was nice because I could select the projects that I wanted to work on and then 'become' that type of business. I didn't make a lot of money that way since it took longer to do things, with every project being a new adventure. But it was an excellent education and I got by. Obviously, I was lacking economy of scale that larger and more assembly line ventures enjoy.

To run your own business, you have to be someone with the capacity to make sure people pay, be able to negotiate, deal with folks who don't compensate you, etc. You have to be able to have the courage to ask for fair wages. You have to deal with clients who change their specifications constantly and don't want to pay you more for it. I've taken to getting signoffs on the specs with the understanding that changing the specs later will result in extra cost.

This does provide flexibility and more free time, though personally I've had trouble keeping a steady flow of work which has hurt my overall profitability.

I tend to do a lot of long term contracts, and then pick up short term work in between jobs. It's a nice thing to be able to fall back on.