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Percentage of Self-Employed IT Workers Increasing

samzenpus posted about 9 months ago | from the never-take-off-your-pajamas-again dept.

Businesses 138

dcblogs writes "The tech industry is seeing a shift toward a more independent, contingent IT workforce. About 18% of all IT workers today are self-employed, according to an analysis by Emergent Research, a firm focused on small businesses trends. This independent IT workforce is growing at the rate of about 7% per year, which is faster than the overall growth rate for independent workers generally, at 5.5%. A separate analysis by research firm Computer Economics finds a similar trend. This year, contract workers make up 15% of a typical large organization's IT staff at the median. This is up from a median of just 6% in 2011, said Longwell. The last time there was a similar increase in contract workers was in 1998, during the dot.com boom and the run-up to Y2K remediation efforts."

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Well.. (4, Informative)

Moheeheeko (1682914) | about 9 months ago | (#45768323)

..Anybody who finds this suprising hasnt spent any time working IT for a company. Working IT in any company is a thankless job where every problem is your fault and must be fixed 2 hours ago.

Re:Well.. (5, Insightful)

cold fjord (826450) | about 9 months ago | (#45768415)

It is an occupational hazard. When you are good at your job, have a decent architecture, and have at lest the bare minimum of resources, you can pretty often keep things running reasonably smoothly to external appearances. Since things aren't obviously wrong people won't complain, they think you have enough, and think your job is "easy" since nothing big seems to go wrong. What they don't see is you scrambling behind the scenes to compensate for the lack of resources, catching problems and the occasional disaster before they happen, and wishing you had one more person so that you could finally get some real vacation time in. They will be deaf to your resource requests. Then they outsource you and are shocked at the bill.

Re:Well.. (2)

CODiNE (27417) | about 9 months ago | (#45769501)

Yeah my old boss used to ignore maintenance on non-critical things and let them break pretty much on schedule. That way the bosses saw us as "busy".

Used to drive me nuts, I'd rather do preventative maintenance and use the extra time to improve things.

Sadly I suspect much of IT operates under the broken window fallacy for this reason. Imagine what a non-disfunctional IT policy could do for a company's productivity.

It's not consistent either .... (1)

King_TJ (85913) | about 9 months ago | (#45770641)

The problem I've always seen when working in corporate I.T. is "when it rains, it pours", but just as often, there's not a proverbial cloud in the sky.

Management justifies hiring of additional staff by analyzing how much workload there is, above pretty much everything else. This is usually a pretty sensible way to go about things. After all, if you're talking about people working in, say, your warehouse's shipping department? When they complain they need an additional employee out there? Management is going to try to figure out how busy the existing people are. Are they all working as hard as possible for 8 hours straight (minus any legally required breaks), or do you have people sitting on their butt goofing around a lot while they wait for a truck to come in? If the later is going on, then there's probably going to be a meeting held about ways to improve efficiency in lieu of hiring another body.

I think I.T. is odd, in the sense that really, people are there to keep the expensive infrastructure functioning like it's supposed to, and secondarily, to recommend and design improvements to the existing systems. When you're doing a really good job keeping things going, you tend to look the LEAST busy (because truthfully, what you've done is positioned yourself in a mode where you can read, research, experiment and generally learn on the job, to try to accomplish that second part of your job expectations). When you're sitting on a computer surfing the net for hours -- you simply don't appear to be working (or at least, other people don't really understand what you're doing that contributes to the company).

When you do have those fires to put out and you're stressed out and too short-handed to get things back to normal again in a prompt manner, you start asking for additional staff. But management says, "Huh? Just last week, I saw everyone in I.T. just sitting there on their computers, not doing much of anything. How can we justify paying out another salary? Surely these guys could find a better way to use their time!"

They don't really tend to grasp the fact that you need X amount of manpower to cover any "disaster situations" or "need this change now!" situations, regardless of how busy those people seem to be the rest of the time. That's the cost of getting quick results in a crisis.

Where I work now, we're in the middle of one of those battles. We've got offices spread out around the country, and one of them has no I.T. person working there, so their manager constantly complains he gets the "short end of the stick" with support, even though his office pays as much of a percentage towards I.T. expenses as everyone else. When we start tracking our help tickets in detail though, we see his office uses MORE of our time than almost any of the others, so they're getting support. It's just that they realize it's a slightly faster, more efficient quality of support when you can just yell across the hall to an I.T. guy right there to "come look at this" -- vs. putting a ticket and waiting your turn for a return call, followed by having to help doing a lot of over the phone troubleshooting. We know we're overworked in our dept. -- at least whenever a big change is called for like our recent mail server move/upgrade. But management's response to all of this? "If I.T. would define exactly what they do and don't support, and would document/publish this in detail, it could trim back its workload without the need to hire another staffer." (Yeah right.... We can write a laundry list of things we "won't support" anymore, but every single time it gets in the way of something deemed important enough to the company, to clients, or to business profits in general? Exceptions will immediately be made and we'll be right back at square one.)

But honestly, I've done the self-employed I.T. thing too -- and it's no bowl of cherries. Every single thing you do directly affects your potential future earnings. Get a phone call from a client you find annoying and decide, "I *really* don't want to take his call right now ... I'll let him go to voicemail and deal with him tomorrow."? You might very well have just irritated him enough so he calls elsewhere and tells everyone else he knows why he switched. Overlook something while doing a computer repair or upgrade? In corporate I.T. that probably just means someone calls (maybe a bit upset?) and you run back and correct it. When you're the consulting business, that's an automatic mark against you and the presumed quality of your work.

Re:Well.. (2)

hb253 (764272) | about 9 months ago | (#45768559)

Odd, the only contractors I see are shipped from India for a few weeks or months so they can be trained by the soon to be unemployed staff and then are sent back to India by their contract company.

Re:Well.. (1)

dimeglio (456244) | about 9 months ago | (#45769241)

2 hours? In my company, when the system goes down, if it's not fixed in 30 seconds, they take us outside and execute us. /s

Re:Well.. (3, Insightful)

msobkow (48369) | about 9 months ago | (#45770185)

More importantly, working as an employee often means 60 hour weeks without overtime.

Contracting, I was always paid straight-rate overtime. Not time and a half so as to gouge the customer, but at least compensated for my time. I found contracting kept me in a better headspace about work, too -- I never counted on the company to keep me around. So while my co-workers would be all freaked out at being downsized, I'd just shrug my shoulders and move to the next job with no hard feelings on either side.

Mostly because companies are bastards. (0)

Anonymous Coward | about 9 months ago | (#45768325)

Incorporate yourself, or LLC, and get away from all the bull***t. That's the best job security and money.

Re:Mostly because companies are bastards. (4, Informative)

cayenne8 (626475) | about 9 months ago | (#45768361)

Definitely look into incorporating yourself, and if you are just a "company of one", look into filing for Subchapter "S" Corporation for federal filings.

You avoid double taxation this way....you pay yourself a "reasonable salary" according to the IRS, and you only have to pay employment taxes (SS and medicare) on that portion of income, the rest falls through at EOY, and you don't have to play employment taxes on that, nice way to save your hard earned money.

Do get a CPA for this however.

I'm anxious to see what the individual mandate does to the self employed worker from Obamacare. I'm thinking I'll need to raise my bill rates next gig I do that is 1099 and not W2 to cover that.

Re:Mostly because companies are bastards. (2)

n1ywb (555767) | about 9 months ago | (#45768547)

I'd like to hear from anybody who's opted for S-corp tax status as a self employed IT contractor with no income beyond his/her labor rate. Because my understanding is that the IRS takes a pretty dim view of writing part of your labor rate as 'profit' because presumably whatever you are charging for your labor IS a reasonable salary. My understanding is that S-corp status only makes sense (IE isn't likely to result in an audit) if you operate a business that generates legitimate profits; IE you sell products/services at a markup, which pretty much excludes any one-man IT shop. Maybe if you contract in some crazy niche market where you can command $400/hr then you can get away with this but if you are charging normal market rates for your normal work then it seems like an invitation for an audit and penalties.

Re:Mostly because companies are bastards. (5, Informative)

cayenne8 (626475) | about 9 months ago | (#45768635)

I'd like to hear from anybody who's opted for S-corp tax status as a self employed IT contractor with no income beyond his/her labor rate. Because my understanding is that the IRS takes a pretty dim view of writing part of your labor rate as 'profit' because presumably whatever you are charging for your labor IS a reasonable salary. My understanding is that S-corp status only makes sense (IE isn't likely to result in an audit) if you operate a business that generates legitimate profits; IE you sell products/services at a markup, which pretty much excludes any one-man IT shop. Maybe if you contract in some crazy niche market where you can command $400/hr then you can get away with this but if you are charging normal market rates for your normal work then it seems like an invitation for an audit and penalties.

I do the S-Corp thing and know many others that do too, as one man band things.

It works this way, let's say you bill out for $100K. You pay yourself a "reasonable salary" as president of the company of $40K.

You only pay employment taxes (SS and medicare) on that $40K.

The remaining $60K, you deduct for expenses, etc....and out of what's left falls through to your personal taxes which you pay normal federal (and state taxes if you live in such a state) on that, but no employment taxes.

It is perfectly legitimate and legal. The trick is to not be too greedy with what you propose a "reasonable" salary is. There is no guideline, but if you figure about 40% of your bill rate, that seems to be reasonable for myself and others I've known that do this.

Again, get a good CPA to help advise you.

But many folks in the IT contracting market do just this type of setup because it is legal and works. Just keep good records, be legal and don't get greedy and you'll be just fine.

I personally have had a number of years experience with this.

Re:Mostly because companies are bastards. (1)

Anonymous Coward | about 9 months ago | (#45768725)

I've formed an S Corporation and worked independently twice, once in the late 90's and around 2005. It is perfectly legal and legit. Both times I worked with an attorney to form the corp, and an accountant to review my books and prepare financial statements. I did the bookkeeping myself using QuickBooks. It is completely legit.

Re:Mostly because companies are bastards. (1)

RabidReindeer (2625839) | about 9 months ago | (#45768911)

I've formed an S Corporation and worked independently twice, once in the late 90's and around 2005. It is perfectly legal and legit. Both times I worked with an attorney to form the corp, and an accountant to review my books and prepare financial statements. I did the bookkeeping myself using QuickBooks. It is completely legit.

I formed an S Corporation, but it was because I had shareholders and they wanted the liability protection of a Corporation without the double-taxation of a full corporation.

I don't think that in my locality, at least, I would be gaining any benefit as a single contractor over simply operating as a Sole Proprietorship, drawing a salary from assets accumulated.

Re:Mostly because companies are bastards. (0)

Anonymous Coward | about 9 months ago | (#45769211)

If you are in the U.S. if you have a reasonable salary this depends on a lot of things, give yourself IRA and maybe health insurance, then it can be very beneficial. On the order of $1500 tax savings for every $10,000 that you is profit rather than salary. Whether you take it or not.

Re:Mostly because companies are bastards. (1)

cayenne8 (626475) | about 9 months ago | (#45769765)

I don't think that in my locality, at least, I would be gaining any benefit as a single contractor over simply operating as a Sole Proprietorship, drawing a salary from assets accumulated.

Please DO look into this more. From my understanding, a Sole Proprietorship does NOT give you the legal protection that a corporation does, your personal assets may be in jeopardy if anyone sues you....!!

:(

Re:Mostly because companies are bastards. (1)

LDAPMAN (930041) | about 9 months ago | (#45770213)

Actually, a corp does not usually help much in that regard if your the only employee. The odds of you being able to maintain the corporate veil are really low.

Re:Mostly because companies are bastards. (1)

bill_mcgonigle (4333) | about 9 months ago | (#45770287)

There is no guideline, but if you figure about 40% of your bill rate, that seems to be reasonable for myself and others I've known that do this.

That's totally reasonable. I'd be really lucky to get 40% of my hours into client work. The rest is prospecting, billing, advertising, taking out the trash, keeping the in-house IT up to snuff, learning new everything every year, etc. That's all overhead as far as the business is concerned.

Re:Mostly because companies are bastards. (4, Informative)

Keick (252453) | about 9 months ago | (#45769797)

I'm going to chime in here, as other have.

I'm an S-Corp as well, vs. a LLC for exactly those reasons. Namely I pay myself a standard rate, and bill out at a higher rate. There are several advantages, and caviets.

Let me jump in a say that MOST contract houses run at the 1.8 to 2.1 factor and for good reasons. For example, say I'm at a 2.0 factor. If I want my hourly rate to myself to be $40 I'll charge 2.0 times that to my customer, or $80.

The best reason to stay in that 1.8 to 2.1 range is that it is easy to account for in case of an audit. Most GSA have base * overhead * profit, where profit is supposed to be only 15%. However the overhead side of the equation is big, because it covers all the indirect employees; secretaries, accountants, IT staff, CEO's, etc. So on any given GSA contract, the billing rates will all end up in the 1.8 to 2.1 range.

1) The key here is the IRS knows GSA, so anything in that range is legit, so long story short stay at or ABOVE the 50% mark for your hourly rate vs billing rate if you want to stay off the IRS radar.
2) As much as you'd like to, don't ever write off part of your house on the S-Corp. Yes its legal, but since it is highly abused your more likely to be flagged for an audit.
3) Expense as much as your toys as you can, computers, routers, printers are all valid deductions of the S-Corp income.
4) Use quickbooks and its payroll add-ons. Yes there are other tools, but quickbooks is easy an worth the $300. Wait for a good sale in Feb of almost every year for $100 off.
5) Set everything up hourly, not salary. Set your billing rates, pay rates, vacation rates, even 401K or 408K per hour. This just is much easier to track and bill your clients, and pay yourself and your future employee's!

Re:Mostly because companies are bastards. (1)

Sponge Bath (413667) | about 9 months ago | (#45769361)

...you only have to pay employment taxes (SS and medicare) on that portion of income, the rest falls through at EOY, and you don't have to play employment taxes on that

This can be done for partnerships as well. The IRS does scrutinize the amount subject to payroll taxes, but you have to be stupid greedy to get zapped.

Do get a CPA for this however.

Best advice ever. One of my partners IS an accountant and we still have an outside CPA firm handle the taxes.

Re:Mostly because companies are bastards. (1)

Rob the Bold (788862) | about 9 months ago | (#45769413)

I'm anxious to see what the individual mandate does to the self employed worker from Obamacare. I'm thinking I'll need to raise my bill rates next gig I do that is 1099 and not W2 to cover that.

Presumably the wise self-employed worker was incorporated -- as you suggested -- and already buying him/herself decent tax-deductible health insurance, and already charging rates sufficient to pay his employee's (his) wages and benefits. Otherwise, he was subsidizing the contracting entity as the potential expense of his employee's (again, his own) health.

No it isn't. (1)

Anonymous Coward | about 9 months ago | (#45768527)

Incorporate yourself, or LLC, and get away from all the bull***t. That's the best job security and money.

First of all, getting business. Getting business is hard and if you have one csutomer (worse if it's your old employer) you could find yourself out of work easily - even permanently. Technology is fickle and one year you're pullig 120K as a C++ distributed developer and the next everyone jumps on the Java EE wagon or .NET. Learning on your own doesn't count - you must have ON THE JOB experience and a proven record of development experience in that technology.

Secondly, basically all you're are doing is changing your tax status from W2 to filing as a corp or LLC; meaning YOU will have to deal with the quaterly taxes, book keeping, and all the other business operations BS as well as doing what your customer hired you to do. So, you end up with TWO jobs.

Third, companies do not want to pay enough to compensate for the business risk - the time when you are not working. Those times WILL come and you
will not get paid during those times and you will have fixed expenses to pay.

Companies only want to pay you the hourly equivalent of a W2 employee (of course, with the SS and other taxes included.)

Unless, you are really good at rainmaking and can keep it up, being an independent contractor sucks.

You only exchange/increase bulls**t, not reduce. (1)

sethstorm (512897) | about 9 months ago | (#45769539)

You take on paperwork, payment, scale penalties, and increased instability for going that route.

If it makes sense for someone, they are one of the fortunate few that can factor out at least one of them. The Rest Of Us, on average, do not have that good fortune and will not gain it short of a legislative act or Executive Order.

Another reason... (1)

Capt James McCarthy (860294) | about 9 months ago | (#45768333)

As a 1099, you are not an employee and the company is not responsible for any benefits. So the company can on the fines for the ACA.

Re:Another reason... (3, Interesting)

cayenne8 (626475) | about 9 months ago | (#45768441)

As a 1099, you are not an employee and the company is not responsible for any benefits. So the company can on the fines for the ACA.

True, but as you being the contractor on the other end of things, you can write off a LOT on your taxes, all work related mileage, you supplies, cell phones, internet...etc.

While it does give you a bit of paperwork to contend with, once you pass that first slightly high part of the learning curve, that part becomes regular rote actions with a little time.

Hire a CPA, and you're likely golden. Sure, its a bit more effort, but how much effort is worth keeping your hard earned money from the IRS as much as possible?

Re:Another reason... (1)

fuzzyfuzzyfungus (1223518) | about 9 months ago | (#45768941)

"Sure, its a bit more effort, but how much effort is worth keeping your hard earned money from the IRS as much as possible?"

Presumably the same number of dollars/hour that would be worth it for any other way of obtaining money by wading through accounting paperwork(or doing some other approximately equivalent work).

Re:Another reason... (3, Insightful)

Trepidity (597) | about 9 months ago | (#45768611)

It's rarely for cost savings on the company's side; contractors are almost always more expensive when you've added up the overhead on both sides. Among other things, contractors typically bill at higher rates, and also bill for commute and travel time: if they send a contractor on a business trip, the entire time he or she is on the plane, in the security line, etc. is billable at full engineering rates, while salaried employees don't get any overtime for that.

The main budgetary advantage of contractors is that they're much easier to flex as staffing needs vary.

Re:Another reason... (0)

Anonymous Coward | about 9 months ago | (#45768923)

Maybe. More and more companies look at IT like the copy machine people or the plumber. This is to say a specialist. Smaller companies find it less expensive overall to have an IT Consultant they have come in even on a regular basis vs. FTE employee. I speak from experience on this. Even large enterprises do this for specialities or to service a small satellite location. Paying someone like me 10 - 30K a year for certain amount of time or work weekly or monthly is far less than 40 to keep things running or do certain projects is better than all the costs of an employee. On my side no one controls 100% of my income therefore its a more balanced situation. Living on 80% is better than 0%.

Re:Another reason... (1)

mikael (484) | about 9 months ago | (#45769703)

I remember that in the first company I interned for. The IT staff maintained their own comms room with dozen racks of PABX, Internet and WAN connections. This was the time when Digital X.25 networks were state of the art. It was the room they always took visitors to see - racks and racks of red, green and black blinkenlighten everywhere.

The bit people didn't see was the "snake-pit" which was all the cabling under the floor, accessed by special spike grips that lifted up heavy carpet tiles. Miles of yellow, blue, green, red cable snaking twisting and curling everywhere. What the engineers used to do was to add a new cable or two every now and again when a new office desk was added somewhere in the building. But then they had to move the rack units around when they ran out of space in one unit. But then all the other cables no longer reached over. So they had to disconnect those old cables and replace them, but now they didn't have time to remove those old cables (since they might come in useful some day) so they were just left there. Then a problem evolved where the engineers couldn't tell which end of each cable was which, so a special strategy of "cable jiggling" was introduced, where one engineer pulled and released that cable, so they other engineer knew which cable to connect.

Eventually all of this snowballed - they ran out of space in the underfloor tiles. The only solution then was to call in a consultant. He immediately saw the problem. Remove all the old cabling, and color code the the new cables according to length, Make sure there are more than enough cables for ever rack unit, so no-one ever has to add cables individually again. Use cable ties to keep everything neat. And it all worked, and they discovered 75% of the cables in the snake pit were unused.

Re:Another reason... (1)

msobkow (48369) | about 9 months ago | (#45770849)

More importantly, 100% of a contracting fee is an expense for the client company. They can't necessarily write off all their expenses for an employee -- especially the employer side tax contributions.

Re:Another reason... (1)

garcia (6573) | about 9 months ago | (#45768821)

Or the company provides the minimum insurance to meet the ACA mandate and forces you out into the private insurance world to get coverage wholly on your own.

I'm not complaining about it mind you, I'm just stating that 1099 isn't the only thing companies are doing to avoid this these days.

Still unemployed (0)

Anonymous Coward | about 9 months ago | (#45768371)

I've been using "self-employed" because I'm too embarrassed to say "unemployed".

I know I'm not the only one.

Re:Still unemployed (2)

RavenLrD20k (311488) | about 9 months ago | (#45768957)

Claiming "self-employed" during periods of unemployment is a perfectly viable tactic as you can use the "odd-jobs" that you perform during this time as working experience. One thing that I would quite often do is for every client I had when I was self-employed I'd offer a discount on my labor rate or parts markup if they wrote a letter of reference. In this way, my resume has not had a period of inactivity to explain away, and Department Managers would be given a book of glowing reviews at interviews. This technique has not failed me yet.

Re:Still unemployed (2, Funny)

Anonymous Coward | about 9 months ago | (#45769545)

I was going to be my own boss, but apparently I'm not hiring right now.

my guess is that self-taught people are part (4, Interesting)

Trepidity (597) | about 9 months ago | (#45768393)

It'd be interesting to see statistics, but my guess is that self-taught technologists are over-represented in the self-employed. Many companies make it harder to get hired if you don't have a degree when you're applying as an employee, but if you're an LLC doing contract work it goes through a different route and suddenly degrees aren't even in the equation.

Re:my guess is that self-taught people are part (1)

TheRealMindChild (743925) | about 9 months ago | (#45768959)

Ah the good ol "I'm a self empolyed web developer. I specialize in PHP/MySQL and javascript" bit.

Re:my guess is that self-taught people are part (0)

Anonymous Coward | about 9 months ago | (#45769255)

No. Actually just learned javascript recently. Have built and managed networks, firewalls, and much on the IT side. Built Windows .net apps, PHP and some javascript more for reporting. Runs in a 911 center and manufacturing as well at a bank. That 15 years of experience seems to help. I have met idiots with and without degrees.

No brainer (0)

Anonymous Coward | about 9 months ago | (#45768401)

If you work for a salary, you're losing at capitalism.

Re:No brainer (0)

Anonymous Coward | about 9 months ago | (#45768709)

"If you work for a salary, you're losing at capitalism."

If you work, you're losing at capitalism. Capitalism rewards capital.

Re:No brainer (3, Interesting)

Anonymous Coward | about 9 months ago | (#45769445)

"If you work for a salary, you're losing at capitalism."

If you work, you're losing at capitalism. Capitalism rewards capital.

Capitalism taxes capital less than it taxes labor, too. There's a reason it's not called "workism". Work is for chumps who didn't choose their parents well.

Re:No brainer (0)

Anonymous Coward | about 9 months ago | (#45769451)

"If you work for a salary, you're losing at capitalism."

If you work, you're losing at capitalism. Capitalism rewards capital.

I trade stocks while (pretending) my code's compiling. I WIN!

Re:No brainer (1)

LDAPMAN (930041) | about 9 months ago | (#45770265)

No...Capitalism rewards using capital to produce goods and services that people want to buy. Cash is only one kind of capital. The people producing wealth are not the investors. They only benefit by letting someone else do something productive with their capital. Capitalism is much more about work that is it about capital.

Re:No brainer (0)

Anonymous Coward | about 9 months ago | (#45769833)

guess we can't all be winners like you

Re:No brainer (0)

Anonymous Coward | about 9 months ago | (#45770997)

Well, you might win more often if you used capital letters and punctuation.

this is happening in all industries. (1)

Anonymous Coward | about 9 months ago | (#45768411)

The trend is for part-time workers - no benefits and use them only when you need them.

Basically, the trend is to put more business risk on the workers while not compensating them for it.

Is that including "contracters"? (5, Interesting)

spiffmastercow (1001386) | about 9 months ago | (#45768421)

I'm betting that 18% includes people forced onto contracts because many companies no longer hire full time employees or require "contract" work before making a full time offer.

Re:Is that including "contracters"? (1)

Moheeheeko (1682914) | about 9 months ago | (#45768489)

No, those people are technically employed by a temp agency. I know, Im currently "on contract" where I work, and have been for two and a half years. I shouldnt complain though, there are some who went 5 years on contract before finally saying "fuck it" and finding a new job.

Re:Is that including "contracters"? (5, Insightful)

cayenne8 (626475) | about 9 months ago | (#45768585)

Hey..in this day in age, there is no such thing as a job for life anymore, and there is virtually no such things a loyalty from a company towards the employee any longer.

So, I figure, if you're gonna have the job stability of a contractor, you might as well be a contractor and at least get the bill rate that goes along with it.

Re:Is that including "contracters"? (0)

Anonymous Coward | about 9 months ago | (#45768997)

Hey..in this day in age, there is no such thing as a job for life anymore, and there is virtually no such things a loyalty from a company towards the employee any longer.

So, I figure, if you're gonna have the job stability of a contractor, you might as well be a contractor and at least get the bill rate that goes along with it.

Honest questions here: I hear that a lot, but I don't see any difference in contract rates vs. permanent rates in positions I hear about. But I also have to say that I'm not actively seeking contracts with these high bill rates, and indeed, am pretty much completely ignorant of the world of being a contractor. Are your bill rates really that much better? Is the switch worth it to you (and why)? How do you track down gigs at rates that are worth your time, and not just contracting for perm salary money? What else should I be curious about that I don't even know enough to wonder?

Re:Is that including "contracters"? (2)

cayenne8 (626475) | about 9 months ago | (#45769813)

Honest questions here: I hear that a lot, but I don't see any difference in contract rates vs. permanent rates in positions I hear about. But I also have to say that I'm not actively seeking contracts with these high bill rates, and indeed, am pretty much completely ignorant of the world of being a contractor. Are your bill rates really that much better?

Back on some older gigs, I was bouncing between W2 and then 1099 corp to corp.

W2 was making about $80K/yr. 1099 was billing about $65/hr.

Others can get MUCH better than that, and these numbers that were directly comparable for pretty much the same work was true about 8 years ago maybe?

Bill rates for IT in my part of the US start about $65/hr and go to about $100/hr. This is based on doing some federal contracting and being basically a sub or a sub to a sub on these federal contracts, so these are the numbers after the prime's take their cut off the top.

A good sysadmin on a federal contract is billed to the govt at least $115-125/hr in many cases.

Re:Is that including "contracters"? (1)

Anonymous Coward | about 9 months ago | (#45769143)

You've got a point. At least with a contract you've got a written, legally binding document that specifies your work terms and duties. (And should contain clauses that prevent your employer from screwing you over.)

Current business culture and employment law makes rake-and-file employees little more than creatively named prostitutes. I'm not kidding. American business management and ownership seems to be infected with a perverse hatred of their employees. - Yet they'll happily spend more to hire a contractor.

You might as well be a contractor.

Re:Is that including "contracters"? (1)

Zeromous (668365) | about 9 months ago | (#45769203)

Legally Binding HAH! Okay, good luck binding a big company to your deal after their legal department is through with you!!!!

Re:Is that including "contracters"? (0)

Anonymous Coward | about 9 months ago | (#45769155)

While you are correct, this doesn't make sense about modern America. Just recently I left my job where I was making pretty good money. I won't get into why I left but ultimately the company is hiring three people to fill my role and offsetting temporary deficiencies using two more contractors. All three people are making what I was making so the company was getting a good deal with having me around. The same thing happened with my girlfriend doing office administration type tasks. Three people had to replace her as well. We were both at the same company almost 10 years. So it seems like a company would have a vested interest in paying salary increases year over year provided performance was good.

So if a little loyalty saves businesses money, why would they be disloyal? On a big enough scale I could see how it makes sense, when there are 10 DBAs on a team replacing a single DBA is easy. When there is 1 DBA who is also the network engineer and also the systems engineer and also the voip engineer then the story changes dramatically. Do small business owners really think they can just behave like big business?

Re:Is that including "contracters"? (1)

riis138 (3020505) | about 9 months ago | (#45768617)

This is not always a bad deal, I started out at the large organization I work for two years ago. They generally require most, if not all, IT staff to start out on a contract. I did this for a year and got an offered for a full time position last summer, which for this area, is highly competitive. Oftentimes, theres a light at the end of the tunnel.

Re:Is that including "contractors"? (0)

Anonymous Coward | about 9 months ago | (#45768691)

What?! Highly competitive, hard to get a job? I keep hearing over and over about there being such a huge shortage of IT workers that we need to dramatically increase the number of H1Bs.

Re:Is that including "contracters"? (1)

RabidReindeer (2625839) | about 9 months ago | (#45768953)

This is not always a bad deal, I started out at the large organization I work for two years ago. They generally require most, if not all, IT staff to start out on a contract. I did this for a year and got an offered for a full time position last summer, which for this area, is highly competitive.

Oftentimes, theres a light at the end of the tunnel.

I know someone who did that. Then after 20 years or so, they dumped him on the street.

But it wasn't age discrimination, don't you know...

Re:Is that including "contracters"? (1)

RabidReindeer (2625839) | about 9 months ago | (#45768933)

I'm betting that 18% includes people forced onto contracts because many companies no longer hire full time employees or require "contract" work before making a full time offer.

It includes people who are tired of obtaining a "permanent" position only to have the entire department liquidated 2-3 years later. Repeatedly. As a contractor, I can have multiple clients, which makes it less likely for them to all "fire" me at the same time.

Re:Is that including "contracters"? (1)

spiffmastercow (1001386) | about 9 months ago | (#45769011)

I'm betting that 18% includes people forced onto contracts because many companies no longer hire full time employees or require "contract" work before making a full time offer.

It includes people who are tired of obtaining a "permanent" position only to have the entire department liquidated 2-3 years later. Repeatedly. As a contractor, I can have multiple clients, which makes it less likely for them to all "fire" me at the same time.

That's fine, I'm not talking about people in your situation. Personally I'd probably do the same if I didn't need a consistent stream of income and health insurance to support my family. But there are a large number of IT workers out there that are on "contract", but are treated as an employee. This is basically labor fraud, and it should be stopped.

Re:Is that including "contracters"? (1)

punker (320575) | about 9 months ago | (#45769017)

I am a self employed contractor, and it's not a matter of being "forced". It's not for everyone, because you have to manage your own accounting and benefits, but you can make it work just as well or better than working for someone else's company. I have a group health plan (my wife also works for our company), 401k, and my annual income is substantially greater than my last W2 job. I get a couple unsolicited contract offers every week, which is what I view as my income security. I'm pretty good at what I do, and even though contractors usually go first when layoffs happen, exceptions are often made for the people who perform well (although it's also a sign to start looking at your other options).

So while that number may include contractors, you should recognize that many contractors were not forced into it.

We are all rnin's when our daimyo is an ass. (0)

Anonymous Coward | about 9 months ago | (#45768473)

We are all rnin's when our daimyo is an ass.

Re:We are all rnin's when our daimyo is an ass. (0)

Anonymous Coward | about 9 months ago | (#45769479)

We are all rnin's when our daimyo is an ass.

New Poll: "How long did your last keyboard last?"

The ACA will increase this... (0)

Anonymous Coward | about 9 months ago | (#45768495)

I have a number of pre-existing conditions, that made it impossible for me to get health insurance, except through a large employer. So, I stopped being self-employed and sought a corporate job.

Now that I can buy "health insurance," I am going back to being self employed.

I wonder how many others will do the same?

I wonder how this ability of a whole segment of our population to become self employed and get "quality" medical care for the first time will impact our economy and our society.

P.S. I'm no #@$ liberal. I'm an anarchist who knows there is no such thing as a free lunch. All this will come back to bite the supporters of the ACA in the butt.

Still, it's interesting to see how (hopelessly corrupt) societies evolve. Even NAZI health-insurance-reform is interesting to someone living as a respected professional in an occupied country.

Re:The ACA will increase this... (0)

Anonymous Coward | about 9 months ago | (#45769513)

I have a number of pre-existing conditions, that made it impossible for me to get health insurance, except through a large employer. So, I stopped being self-employed and sought a corporate job.

Now that I can buy "health insurance," I am going back to being self employed.

I wonder how many others will do the same?

I wonder how this ability of a whole segment of our population to become self employed and get "quality" medical care for the first time will impact our economy and our society.

P.S. I'm no #@$ liberal. I'm an anarchist who knows there is no such thing as a free lunch. All this will come back to bite the supporters of the ACA in the butt.

Still, it's interesting to see how (hopelessly corrupt) societies evolve. Even NAZI health-insurance-reform is interesting to someone living as a respected professional in an occupied country.

The cognitive dissonance, it burns!

IT workers are basically self-employed anyway (5, Insightful)

Gothmolly (148874) | about 9 months ago | (#45768537)

No training, so people build labs at home.
No laptop, so people BYOD.
Stupid corporate standard desktops, so people do VirtualBox/Cygwin/VMWare/etc/etc
Nobody hires FTEs because of (insert reason here) so people often contract anyway with middlemen pimps.

Re:IT workers are basically self-employed anyway (1)

Kagato (116051) | about 9 months ago | (#45770033)

I've been consulting for over a decade. I don't expect the company to pay to train me in a formal class, but they should expect project estimates to include "Marco Polo" time when you have to research something cutting edge.

Personally I like have work and personal computer space having a definite air gap. Most places have an IP agreement that stipulate their time and their equipment. Which is fine by me. If you want me to work at home you'll need to provide a laptop. If I'm going to set up a home lab it's because I want to dig into something interesting that will make me more marketable for the next contract.

Want to provide me with a weak sauce desktop, fine. They are the ones paying to have me sit there waiting for the compile to happen. I can demonstrate that a fast machine with SSD pays for itself in a rather short order. Though as a programmer I've rarely run into problems getting full admin and installing whatever I needed to get the job done.

As far as the contracting, I work with smaller firms. They take about a 10% cut. That's significantly less than national firms that take a 40+% cut. If companies actually started to invest in a future STEM workforce I'd likely get paid a lot less because of supply pressure. So far, that hasn't been the case.

good thing for obamacare / aca at least are not (1)

Joe_Dragon (2206452) | about 9 months ago | (#45768589)

black listed if are / have been sick in the past and can get a plan

how meny are real 1099's in the eyes of the IRS? (1)

Joe_Dragon (2206452) | about 9 months ago | (#45768671)

A lot of places likely to call some of there workers 1099's but they like to control them like W2 workers.

Also some temps are W2's but are basically self-employed and some temp / staffing agency is just doing payroll / taxes.

Re:how meny are real 1099's in the eyes of the IRS (1)

Rob the Bold (788862) | about 9 months ago | (#45769523)

A lot of places likely to call some of there workers 1099's but they like to control them like W2 workers.

Also some temps are W2's but are basically self-employed and some temp / staffing agency is just doing payroll / taxes.

The IRS takes a pretty dim view of this practice, but blowing the whistle can be risky in a small enough environment that they know who did it.

Re:how meny are real 1099's in the eyes of the IRS (1)

LDAPMAN (930041) | about 9 months ago | (#45770327)

The first practice is illegal and it is fairly aggressively enforced. Most large companies go to a lot of trouble to ensure this is not happening and that they are demonstrating compliance.

The second practice is perfectly legal.

Verdict - pro or con? (1)

John Da' Baddest (1686670) | about 9 months ago | (#45768683)

So is this a good thing, or just dismal? At the higher end, daily rates for externals can be much better than internal staff salaries -- but of course, with caveats and the usual temporary nature of assignments. And clearly, some people are more suited for this sort of thing than others. I'm interested to hear experienced opinions whether you consider this headline statistic as a good or bad thing.

I'm undecided because the article (and my limited awareness) doesn't break down the types of self-employment into recognizable scenarios.

We need an union hiring hall system for IT with (2)

Joe_Dragon (2206452) | about 9 months ago | (#45768697)

We need an union hiring hall system for IT with

real job training

some kind of an apprenticeship system.

workers rights

the power to say no then the boss wants stuff rushed or things like QA passed over.

Re:We need an union hiring hall system for IT with (1)

RabidReindeer (2625839) | about 9 months ago | (#45769003)

We need an union hiring hall system for IT with

real job training

some kind of an apprenticeship system.

workers rights

the power to say no then the boss wants stuff rushed or things like QA passed over.

I vote for something more like trade guilds myself.

If you're a guildsperson, you're independent and can pick and choose who to work for, when, where, and how.

If you're a union member, you're at the mercy of a single employer, and work the location and hours that the employer says. The union can intercede, but the final choice is a compromise between employer and union, not between client and worker.

Re:We need an union hiring hall system for IT with (1)

Anonymous Coward | about 9 months ago | (#45771157)

And definately stay away from the local government unions (csea for example). Our union has no bargaining power. If the board of supervisors and the union cannot come to an agreement (raises etc), it goes into arbitration. If arbitration fails it goes back to the board for a final decision. Oh, and we are legally only allowed to strike on our own time (read as lunch and breaks). I also imagine the State is pissing my pension away as I type this. Several times now we have received 0% raises while cost of living and health insurance continue to rise. Contracting is looking better by the minute. Now that I have that "experience" of working with untrained individuals, some of whom don't even know what a file extension is, or that they need to type THIER name in the login screen. I think dealing with non local locals could actually be easier and more rewarding.

Re:We need an union hiring hall system for IT with (1)

Anonymous Coward | about 9 months ago | (#45769027)

What we need is to over turn the 'computer workers' exemption from federal overtime laws in the US.

Re:We need an union hiring hall system for IT with (1)

XcepticZP (1331217) | about 9 months ago | (#45771055)

the power to say no then the boss wants stuff rushed or things like QA passed over.

Just because you don't have the balls to say NO to your boss. People who whine about not having worker rights are the lazy ones that don't provide any benefit to a company, and they KNOW that they will get fired if they speak their mind. Make yourself valuable, and then your voice will be heard. Until then, work harder.

Re:We need an union hiring hall system for IT with (1)

couchslug (175151) | about 9 months ago | (#45771065)

Union trades have enough trouble with rats because so many tradesmen think they are special snowflakes. (Some are.)

Good luck with the cat herding, especially in a physically comfortable field such as IT which can be far more easily outsourced than physically demanding and manually skilled trades such as pipe welding.

Nothing new (1)

Justpin (2974855) | about 9 months ago | (#45768771)

This has been going on for a while in the UK. Umbrella companies are common which is why toothless IR35 law was bought in. The bosses save on severance/redundancy/perks (dont laugh) and also 13% on the gross wages of each 'private contractor' and also 2% on mandatory pension contributions. While employees get to claim expenses off simply going to work like commuting and stuff.

Re:Nothing new (1)

mjwalshe (1680392) | about 9 months ago | (#45770871)

Funny how other one person professionals like accountant's, lawyers and plumbers etc didn't get hit with IR35

Lack of College Hires (1)

Kagato (116051) | about 9 months ago | (#45768783)

The problem I see is there's not nearly as much college hiring as there used to be. I've been contracting since the 90's. I work with a lot of mid-cap and fortune 500 clients. When I first started we would often have a few college hires on the programming teams. I haven't seen a college hire programmer (or heaven forbid an intern) on a team in 6 years. They don't want to hire a college kid they have to train and mentor when they can get an "experienced" H1B contractor.

Off-shore and visa workers have created a tiered system where senior level contractors like me are paid a ton of cash to provide adult supervision and guidance on a project. Then the companies complain how much they have to pay domestic contract workers. They also complain about the quality of the work product. That has lead to on-shoring but they no longer have college hire's in the pipe they are leaning heavily on contract workers. Driving the rates up even higher.

What I do see is the college kids are more and more going off on their own to build a portfolio of clients. Usually small and mid-cap companies. A lot of it happens in the mobile and PHP space. Some do a really good job. Some I think are missing out by not having a mentors.

College has to much skill gaps now days tech (2)

Joe_Dragon (2206452) | about 9 months ago | (#45769149)

College has to much skill gaps now days tech schools fill them in but still people need real job experience.

it's easy (1)

BringsApples (3418089) | about 9 months ago | (#45768805)

Either work for someone, making (where I live) between 30k-75k per year, working long hours, traveling around the country (yeah, the good fun that comes with airports in America these days) and doing it all wrong, due to management's idea of how things should be done (which is usually about 15 years behind the times), and then later taking an ass-chewing for customers not being happy with the result of it all.
Or, work for yourself making (in my area) anywhere between 60K-125K per year, (mostly) doing things the way you want, staying at home (with family!) and building good relationships with a small customer-base. Dunno, seems like a no-brainer to me. Besides, fuck management that hasn't a clue what we do for a living. Fuck them real nice.

Reality says otherwise and claws back any "increas (1)

sethstorm (512897) | about 9 months ago | (#45769307)

All the increases that you claim to have in freedom and pay are clawed back by taxes, benefits(with no benefits related to scale), and general instability(economically equivalent to Fukushima).

That and you dont get the general camaraderie from being in a group over a longer period of time. So, for most people, salary beats contract when everything is put on the table; the only time it doesnt is for the exceptional and rare few.

Re:it's easy (1)

XcepticZP (1331217) | about 9 months ago | (#45771077)

Do you have any tips/advice on how to get into the self-employed part of the IT/Programming profession? How did you start off?

Meanwhile, in universal health care countries... (0)

Anonymous Coward | about 9 months ago | (#45768833)

...the freelance market is booming just like it was the year before and the year before that, because working for yourself doesn't put your access to health care at risk, or put you at risk of bankruptcy due to a accident. It's not much better under the PPACA, as individually-purchased health insurance plans can cost upward of $12,000 and even $20,000 *per year*.

Universal healthcare countries... (1)

sethstorm (512897) | about 9 months ago | (#45769395)

Universal healthcare is another way that an employer can justify second-class contractor status and then treat you like shit.

How about eliminating the ability to force said status for any job(where any skill level can choose direct or indirect arrangements)? If you want to be a contractor so badly, you can choose it over the default(and that they cannot simply just can FTE's like contractors to get around the law)

Predictably too low (4, Insightful)

Anonymous Coward | about 9 months ago | (#45768841)

Every IT professional's career should go through the following life-cycle:

Employee -> hourly contractor -> freelance/small business ( -> medium/large business)

Which mirrors the typical human life-cycle:

Childhood -> college -> adulthood ( -> own family)

Full-time employment is like childhood, your employer/parents take care of you and in return they control a large portion of your life.

Hourly contracting is like going to college, you still have a lot of constraints on your life but fewer and you have to take care of yourself. In college you have sex, as a contractor you get a big fat pay cheque.

Freelance/small business is like post-graduation life, you're now responsible for every aspect of your business/life and in return you gain a lot of independence, if only you had time to take advantage of your independence, hah.

And if you're lucky, and by that I mean really unlucky, you partner up with a few others and grow your business and start taking care of others. At this point someone will say "you have your own company? Wow, must be nice to be your own boss!" This is your cue to assume the fetal position and sob uncontrolably, again, then ask yourself "is it really worth it?" Damned right it is!

You ignore stability in the general population (1)

sethstorm (512897) | about 9 months ago | (#45769467)

Accounting for all the things you ignore(including the fact that not everyone is meant to be in the unstable sector):
Contract work == prostitution writ large. It is something one grows out of to do more stable work.
Regularized, long-term employment ~= monogamy. It is the type of work that represents an adult level of trust between an organization and an individual. It also unlocks benefits of scale not possible in contract/self employment.

Re:You ignore stability in the general population (1)

LDAPMAN (930041) | about 9 months ago | (#45770389)

I agree that what I do is high-tech prostitution but thats the way I like it. It allows me to extract the maximum value from my skills and efforts. I also get to choose who I work for and with. I can't imagine going back.

By the way, "long-term employment" is about as common as a long-term marriage these days.

It will grow even faster in the US now (4, Insightful)

Timmy D Programmer (704067) | about 9 months ago | (#45768883)

For many IT people in the US the only reason they don't venture out on their own is concerns over health care coverage. Now that it's possible to purchase affordable care on their own this will no longer be a major obstacle.

Re:It will grow even faster in the US now (1)

Anonymous Coward | about 9 months ago | (#45768971)

When companies were railing against Obamacare, I was wondering if Obamacare might lead to an explosion in enterprenuerialship in the USA. As an IT worker you basically sign away all your right to intellectual property and ideas, but as a contractor you can still do the same job for MegaCorp while developing your own projects and products.

It it too early to tell, but hopefully the explosion is coming. :)

Re:It will grow even faster in the US now (0)

Anonymous Coward | about 9 months ago | (#45769385)

2014 is going to be a rough year for people with your attitude. I know you think the only issues with it were the web site, but I suggest you do some searches for how well it handles preexisting conditions, specifically cancer (hint, it doesn't).

All Obamacare did was remove the insurance company from having to pay for health care treatment ($6000 deductible with only 60% coverage after that and very minimal prescription coverage is the average Bronze plan). Most people won't get a cent out of an insurance company for treatments, but they will still have to pay premiums or IRS penalties.

There will be a lot of questions without good answers next year. Should be interesting to see the spin.

Some real information would be nice (1)

Kimomaru (2579489) | about 9 months ago | (#45768925)

IT is a pretty big field. Which positions are affected by this? HelpDesk? Desktop? Server? Windows Administration? Is this happening in Large orgs? There's really no substantial information in the article to help the reader draw any kind of conclusion for themselves.

Good? (1)

Enry (630) | about 9 months ago | (#45769099)

There needs to be a lot of cross-pollination of ideas and technology between companies. It's far easier these days to get stuck in an IT rut and stick with what you know (since it works) rather than expanding into a different technology. I was at my former employer for 11 years until I got laid off over the summer. Took my knowledge, went elsewhere, and have been able to merge what I leared there with the new place and while my former employer is still struggling, the new place is doing a lot better, thankyouverymuch.

It's difficult though. Once you get into a job with good benefits and pay it becomes way more tempting to stay and stick out political BS and non-technical co-workers than strike out on your own and find something to do.

ACA/Obamacare - don't need company (0)

Anonymous Coward | about 9 months ago | (#45769179)

The individual insurance market is a nightmare - recission, pre-existing conditions, high deductibles, high premiums - all so you could get a garbage plan and hope you don't get your claims bounced when you get seriously injured/ill.

Now, that is getting more regulated (and for the better) - make no mistake, I think Obamacare sucks. However, now if you can't get a plan through an employer, you can actually get insurance for a decent amount in the individual market - and real insurance not some garbage plan.

This means, more folks can go out and do independent consulting/contracting and don't have to depend on their employer for not just their salary but their health as well. Yes, you aren't subsidized like you are with an employer (I pay single-digits per paycheck at my current employer - and that's only for elected life-insurance coverage), but you also don't have people who aim to get on an employer plan for 1 month then jump off just to get the COBRA (this is very disruptive for the business who hired them as well - folks who seem "too good to be true" but who just wanted to get group-based insurance coverage and pay for it themselves but couldn't get on the group without joining a company for 1 month every 18 mo).

Unclear about independent workers vs outsourcing (0)

Anonymous Coward | about 9 months ago | (#45769407)

The article seems to mix up true 1099 independent workers with corporations which are outsourcing to consulting companies. People who work for consulting companies can be W-2 workers. Because of this conflation, I am not sure what the article is saying - I think it's just saying that corporations are firing people and outsourcing more than they used to.

Doing contracts since 2007 ... (1)

saintmess (2794661) | about 9 months ago | (#45769515)

and it has been all great pay. some companies offer me full time employment after a few months but i always said no to it.

Excellent (0)

Anonymous Coward | about 9 months ago | (#45769625)

Employment is an alienation of rights. A form of prostitution or enslavement that should be prohibited.
Freedom will be gained through 100% self employment in the IT and all other sectors of the economy.

It Worked For Bill Gates syndrome (0)

Anonymous Coward | about 9 months ago | (#45769711)

Bill Gates got rich because of his connections, not merely because he screwed everyone around him. This is a fact that a lot of wannabe scumbags don't seem to realize.

Not by choice in my case (1)

mnemotronic (586021) | about 9 months ago | (#45769745)

I'd prefer to be FTE, but RIFs happen. My wife is disabled and has some chronic ("pre-existing conditions") health problems so I need a good health-care program + long-term disability ins. Historically that's been through my employer. Currently through COBRA at $1150/mo, going to $1300/mo in 2014. ACA aka Obama-care may help - we're trying to find out but it is complex. I wonder what'll happen when all the technology workers who are tied to a job because of health coverage are no longer dependent on their employer for medical insurance? Retire to Costa-Rica? Join the Peace Corps? Become artists?

I'd rather do the FTE thing (1)

ErichTheRed (39327) | about 9 months ago | (#45769909)

All things considered, I think I want to stay an FTE. I don't really need to be - my wife works and we have much better health coverage through her employer. However, one thing I've noticed with contract work is the lack of stability. Even with the high bill rates and the ability to call just about everything you purchase a business expense, there's something to be said for sticking with a company and building/fixing a product throughout the lifecycle. Also, if you can't sell, drumming up business is a lot harder than landing an FTE spot...you either have to do your own marketing or hire someone.

I've seen contractors used in 4 scenarios:
- Contract to hire -- which is the situation at my current employer now. Because there is such variability in "IT professionals" out there, companies don't want to spend the money to find out if someone's not worth keeping.
- Prostitute/mercenary model -- You're expert in the new hotness buzzword of the month, and jump from company to company all over the country/world implementing said hotness. Your employer is left dazed and confused with a little bit of documentation and a skeleton crew of permanent staff to take care of what you built.
- The Fixer -- very similar to the mercenary model -- you parachute in from nowhere, clean up someone's mess, and disappear just as quickly.
- Abuse/meatgrinder model -- No permanent employees, just a revolving code monkey/IT tech door...cycle through them and move on to the next one.

The mercenaries and the fixers end up making tons of money at the expense of a personal life. I know a couple of these guys who have tried to get me to join them (I'm a halfway decent fixer...) and they literally work 3/4 of the year or blow their copious amounts of money on expensive toys/hobbies. Only problem? I'm married and have a life outside of work.

Contract-to-hire looks good on the surface, but only if you control who you get to interview for the jobs. If you leave it up to the recruiters, you get the meatgrinder fodder who has no desire to stick with the company and watch what they built get used. We've had interviews lately where we've had to say "when we say contract-to-hire, we really mean hire."

Unfortunately, once you get that life outside of work thing, that permanent job starts looking pretty good. I've had good luck, and I tend to choose employers who don't treat their FTEs like disposable contractors. I know I'm leaving money on the table, but I think that if you pick companies that are in it for the long haul, staying on and building up institutional knowledge makes it even less likely they'll throw you out. As long as you're not the highest paid person there and still demanding more, there are still stable FTE jobs outside of government.

Employers of Record (1)

meeotch (524339) | about 9 months ago | (#45771147)

How many of self-employed (or non-self-employed) out there have to deal with "employers of record"? I'm not in IT, but I am in an industry where predatory third-party employers act as a means for companies to pass their payroll taxes, workers comp insurance, etc. on to their employees. My understanding is that this sort of thing is prevalent in IT as well, so I'm curious how many slashdotters who are in IT have to deal with this.

For those who are unfamiliar, the grift is this: Company A, rather than hiring worker W, instead contracts with Evil Employer of Record E. E "hires" W, and "loans" them out to A. Since W doesn't work for A, A doesn't pay payroll taxes, workers comp, etc. (A significant amount - something like 10-20% of salary.) This is where it gets fun: E, which is now responsible for those costs, passes them through to W by deducting them from W's pay. Often, they'll charge a 2% fee on top of this for the privilege.

All of the costs of being a 1099 contractor, with vastly diminished opportunity for tax deductions. Plus you pay the max % for unemployment tax and workers comp (those costs are on a scale, and self-incorporated person would generally come in at the bottom of that scale instead of the top).

In my industry, a lot of foreign visa workers and the less tax-savvy are caught in this scam. And the gov't (specifically, the state gov't) does nothing to stop it, because they're getting unemployment tax that they wouldn't get if the same workers were 1099.

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  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>