Slashdot Mirror
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?"
I made this move a little over 3 years ago. I was in a desperate situation in that my employer at the time was axing people left and right, good people too. I ended up getting dumped an entire bag of junk and work that I couldn't perform. My coworker, who was in an architect manager role had had enough and made the jump about 3 weeks prior. I ended up hooking up with the same contracting firm he went to and got myself under a W-2 employment agreement with them. He on the otherhand already had a 1099 corp established and was able to get the appropriate agreements in place for it. I personally didn't want to go through the motions of establishing personal health care, the 1099 corp, etc. It just wasn't something I could stomach at the time.
The jump was scary as all hell. I hopped on a new contract about 48 hours after leaving my former employer and started getting setup. Unfortunately, the position was not exactly as my account rep had conveyed with me. Nor was it as clear cut as the contractee's interview/position description stated. Needless to say, the first few weeks were a bit bumpy. I was able to establish a fairly good rapport with the client and things have been more or less peachy since. There is the temptation in some cases that, as contract, you will get paid overtime. I have to warn you. This is a blessing and a curse. When you do this stuff and go the extra mile, it sometimes becomes expected of you. While the extra money is nice, the long hours tend to really eat in to you.
In early June, after a couple of internal management organization shifts, I was under the impression that my contract was stable through the end of the year. Well 1 week into June, I was informed that I would no longer be needed in my current role after 30 June. Needless to say I felt that I had just been screwed over, my contract firm was outraged, and I was really starting to freak out as my, then, girlfriend (now wife) had just moved in. Money coming in was VERY important. Luckily, my contract firm has feelers in all over this particular company, they were able to secure me a position quickly in C++ land, which I wasn't overly proficient at as having programmed in Java for the last 4 years, but it was work. The way the agreement was inked, I would be paid as a salaried employee up to 40 hours, get 2 weeks vacation time, 5 sick days, etc. Overtime was a bit of a sticker. I have to work something like 6% overtime or some such garbage before I get paid for it. Since my earlier experience put a real pinch on me, overtime was going to be minimal at most if I could help it.
Long and short of this is that you should really research your options and your current situation. If you can stick it out and look for a perm position, go for it. If you are willing to "eat shit" for a while, you may come up smelling like a rose. My experience may or may not be the same that many people have. If you are confident in your skills and are able to adapt quickly to fluid situations, then you may want to try your hand at it. Make sure though that you have enough banked up to cover shortages in hours (i.e. around christmas time where code freezes may be rampant and actual work may be scarce).
Hope my long winded telling of my last three years has not been over the top or wandering too much.
If you didn't have the constraints of being an employee, would you work more or less?
If you'd work more because you get paid by the hour, enjoy what you do, have a desire to understand how businesses are run, and now have a vested ownership in the results, then you're on the right path to start contracting.
If you like having the business do the business part for you (legal, financial, insurance, management, etc), like knowing that you can leave work behind after your 40 hours a week, and you don't go home trying to figure out what else you could be doing (and not just because you signed an IP agreement) then you're probably better off as an employee.
It's a big leap, and everyone here is right when they say you take on more costs (but you already knew that I hope), that there's more work, taxes, risks, etc. But it really comes down to a personal desire, since if you have that desire (and hopefully some ability that people will pay for), then everything else will work itself out.
My consulting business took off the day that I decided that I would never again perform work on an hourly basis. It makes for difficult negotiations, but I insist on a flat fee and a set completion date. This allows me to over-perform by getting jobs done ahead of schedule, and my clients dont bother me about adhering to a schedule. I show up for meetings and any other duties at the client site, but I dont let them watch me program, and I aint there to teach anyone how to do anything for free. This way, I can manage 4-5 programming jobs at the same time, and never have to watch a clock. I get a bonus if early and a fine if I am late. If you fill out a timecard in order to get paid, then you are a temp. Plain and simple.
Well, it seems to me that you lack the kind of skills to properly interface with the non-geek world. This unto itself limits your potential for acquiring and keeping new clients.
Stingy Mom and Pop's are exactly why I interview my clients... I never sign with anyone who haggles with me or is simply interested in doing things on the cheap. Blatant honesty helps also, during the first meeting with a potential new client I inform them that my prices are inflexible, my hourly rate is expensive, I don't do credit on material goods, I don't make any exceptions... and if they accept that they will receive a quality of work and service that they can't find elsewhere. I don't find it necessary to advertise, or even keep a website, all of my new clients are referrals.
Despite the fact that it costs quite a bit over $1,000 to employ me for a day, I have no shortage of business (and this is in a county with a median income of about $30,000) and little to no downtime between contracts, and because I'm picky about who I take as a client, I never have the slow/late pay problems that seem to plage the people who will take any contract.
The Geek in Black
I know my BCD's (when I'm Sober)