Contracting or permanent?

Elessar · 07-01-2015 11:05am #1

Just wondering what contracts developers here work on - are you permanent or contract? And why do did you choose it?

c_man · 07-01-2015 11:28am

I'm permanent. Contracting seems to really suit some people, but tbh I'm happy without all the overhead and hassle that comes with it. The company sorts pay (!), pension, health care and taxes along with other stuff. No way I'd have the patience to do all that paper work, not to mention being constantly on the hunt for jobs.

srsly78 · 07-01-2015 12:00pm

Only choose contract if it pays really well, otherwise there is no point. When comparing contract rate with permanent salary you must take into account holidays, pension, job security etc.

Especially avoid "fixed term" permanent roles, these are the worst of both worlds it seems.

Elessar · 07-01-2015 12:16pm

Honestly contracting is where I want to end up eventually. Sitting next to a guy in work who is a contract developer on at least 400/day and he's been here over a year. Has been asked repeatedly to take a permanent role, but won't, as he'd lose too much. Has no trouble getting extensions. Another dev starting tomorrow on about 350 daily rate I believe. Three times my salary (although I'm not in development just yet) and nearly twice what other permanent developers I know are earning.

Honestly if you're young, why would you not contract? Give me a good rate over pension/holiday pay any day.

L.Jenkins · 07-01-2015 8:40pm

On €200 a day as a Developer. I find it a bit of a hassle and would rather negotiate a decent wage with additional terms and conditions for a permanent role.

EamonnDunne · 07-01-2015 9:35pm

Itzy wrote: »

On €200 a day as a Developer. I find it a bit of a hassle and would rather negotiate a decent wage with additional terms and conditions for a permanent role.

How many years of experience do you have?

L.Jenkins · 07-01-2015 9:40pm

EamonnDunne wrote: »

How many years of experience do you have?

Going on 6 years at this stage.

Gone West · 07-01-2015 9:44pm

Itzy wrote: »

On €200 a day as a Developer. I find it a bit of a hassle and would rather negotiate a decent wage with additional terms and conditions for a permanent role.

Bear in mind that's good money for the midlands but well below market daily rate in Dublin for any half decent dev.

It's barely worth contracting for less than €320, around €400+ it starts making most sense IMO. Regarding the "hassle", it's really no hassle at all. You can pay an accountant to own your paperwork and they only come to me to ask for receipts or a signature. Actually very low maintenance.

I've done contracting and perm and tbh I much prefer contracting.
I've never had a client end my term without at least trying to get me to stay on. And tbh the daily rate work suits me.
Having a relatively very high daily rate also suits. Being very very good at what you are paid to do will be the main thing.
The client won't want you sitting idle and they will ensure that no red tape, politics or internal BS will stop a good contractor from getting work done.
So it's a feedback look where you can look like a champ for consistently delivering, and the daily rate goes up every 6 months. It's often possible to get an agreement at the start where an agent will agree to reduce their cut by €30-€75 per day, for every 6 months you've been in the job.

L.Jenkins · 07-01-2015 9:47pm

Just poor negotiation skills. What should I be on out of interest?

srsly78 · 07-01-2015 10:23pm

You are worth whatever you can get. Note that agencies add their markup as well, as much as they can get... In your case the agency could be billing customer at e500/day - who knows.

What you can get is dependent on supply and demand for whatever your skillset is. Stuff like java or javascript is much in demand and pays good rates with little experience (or skill). Ability to sell yourself and negotiate etc can be more important than technical ability.

EamonnDunne · 07-01-2015 10:27pm

Itzy wrote: »

Just poor negotiation skills. What should I be on out of interest?

Depends on what sort of development you are doing, but if you are in Dublin and its Java/c#/c++ etc I'd expect 350 at a minimum.

L.Jenkins · 07-01-2015 11:02pm

I'm up in Dublin. Essentially I have my hand in everything with the Company I'm working for. I've migrated an Application (20 year old Legacy Application) from HP-UX 11.10 to a Linux Server, while maintaining another Application on another Unix Server. I'm Developing in Perl, C, C++, Java and Bash (For Automation Purposes) to optimize the existing Applications (Not my decision). I'm also responsible for documenting Manufacturing Processes, as it doesn't exist, Documentation for the existing and New, as that doesn't exist either. To round that all off, I'm supporting my working and conducting manual and automation testing. To point out, I'm responsible for all of this. On day 1 of my Contract, I was handed a cluster fúck of a set of systems, but they're coming along nicely.

So looking back, I think €200 a day is a little low.

Gone West · 08-01-2015 12:57am

Itzy wrote: »

I'm up in Dublin. Essentially I have my hand in everything with the Company I'm working for. I've migrated an Application (20 year old Legacy Application) from HP-UX 11.10 to a Linux Server, while maintaining another Application on another Unix Server. I'm Developing in Perl, C, C++, Java and Bash (For Automation Purposes) to optimize the existing Applications (Not my decision). I'm also responsible for documenting Manufacturing Processes, as it doesn't exist, Documentation for the existing and New, as that doesn't exist either. To round that all off, I'm supporting my working and conducting manual and automation testing. To point out, I'm responsible for all of this. On day 1 of my Contract, I was handed a cluster fúck of a set of systems, but they're coming along nicely.

So looking back, I think €200 a day is a little low.

There is often a resistance to paying good money to a jack of all trades. But tbh I find that a great all-rounder with wide knowledge can be worth way more than one specialist in a particular sub-area niche.

It really depends on how big and critical these systems are, and who the client is, how deep their pockets are. But assuming you can go deep as well as broad, yes, your next daily rate in another company should be €350 plus. Check out the annual salary surveys, and also the Gartner publications on the subject. They are reporting boom-time daily rate and perm salaries in parts of IT. I know a handful of people who have come back from London etc to take up jobs.

c_man · 08-01-2015 1:00am

Fuzzy wrote: »

Regarding the "hassle", it's really no hassle at all. You can pay an accountant to own your paperwork and they only come to me to ask for receipts or a signature. Actually very low maintenance.

Sounds like you've a much better time of it then some of my workmates who have done/are doing it

Well good it's working for you. If you don't mind me asking, what kinda holidays do you take per year? What kinda stack/area are you working in?

L.Jenkins · 08-01-2015 1:06am

It's not that I'm a jack of all trades, but the role itself requires a broad knowledge, from being able to pick apart and analyse legacy code, Linux and Unix Administration, Development and a good knowledge of quite a few languages, DBA and SQL, and good Tech/Documentation writing skills as I have to document Manufacturing Processes as well. So in a similar role, I will be looking for around the €350 mark.

yop · 08-01-2015 11:24am

Contracting for 5 years now, rates have been from 320 to nearly 400 a day. West pays less but still good rates. In the same company for 2.5 years on rolling contracts.
Own a limited company and do all my own accounts and vat/taxes. I have an accountant who reviews it before EOY are submitted.

200 a day is shocking low and especially for Dublin.

yes there · 08-01-2015 12:08pm

It does seem shockingly low. I was offered 175stg a day straight out of college. O yrs experience v 6 and I was offered more. Thats just not right Itzy.

Graham · 08-01-2015 12:31pm

Elessar wrote: »

Honestly if you're young, why would you not contract? Give me a good rate over pension/holiday pay any day.

There's pros and cons to contracting like any other career choices you make:

Pros
Experiences - if you're flexible, you can end up working in all sorts of interesting places on all sorts of projects.
Variety - Short term contracts will allow you to build up a large base of experience much faster than someone in a permanent position for a few years.
Flexibility - some companies MAY permit offsite working and you may even get to call your own hours. Don't count on that though, the likelihood is you'll be 9-5 on site with everyone else.
Better Pay on average you should be looking at rates 2 - 5 times the permie salary.
Politics you largely get to avoid the office politics although you'll occasionally get a member of permanent staff who resents the fact you're being paid X times what he/she is.

Cons
Experience - it's very easy to get railroaded into a specific role/technology. Opportunities for promotion into other positions may be limited.
Training - it's all down to you to motivate yourself to do it and it's all down to you to pay for it.
Security - might not be that important while you're young but a downturn in the company could see you jettisoned very quickly. A downturn in the economy can see you competing a much bigger contractor pool, this can be made doubly painful when you're competing with ex-permies who are willing to accept almost permanent rates for a contract position.
Benefits - there are none, you're on your own. Two days off with flu - no pay. Appendicitis - no pay for several weeks. Lack of paid holidays encourages you to work and work and work and work, it takes discipline to force yourself to take time off.
Paperwork/tax/company stuff - the buck stops with you. Naturally employing the right professionals can mitigate this.
Location - to get the best rates you obviously have to go where the work is.
Pressure - you will probably be expected to hit the ground running and you will probably not get the leeway that permie staff get if you slack off.

None of that's intended to put anyone off but you'll stand a much greater chance of success if you go into it knowing there's more to it than a better monthly salary.

moycullen14 · 08-01-2015 12:39pm

You should budget on contracting 220 days per year - that's 44 weeks. You'll miss a few days sick, all bank holidays, be between contracts and holidays.

You should probably budget about 10% for costs of contracting - accountancy, various insurances (health, critical illness, PHI, life insurance) and any other benefits that you might have got as an employee. Maybe deduct 5% as well for company pension contributions.

It used be the case that there were serious tax benefits to contracting in terms of expenses, etc. These have been seriously eroded over the years and the recent revenue 'project' in Munster has resulted in back-claims for over paid expenses.

So a ballpark figure for a contractor on 350/day would be a salary equivalent of about 65-70K. Certainly that is higher than an average developer might get so it seems like a good idea, from a financial perspective.

Longer term, there are some issues that need to be considered:

There is no 'career' progression. You may be perfectly happy with this. There is no incentive (or requirement) to go into 'management'.

There is no security. Again, is this really any different from the permies?

You tend to get the crappy jobs. The interesting architecture/green field projects tend to go to the permies.

Contracting rates have shrunk over the years and will probably continue to.

You need to be prepared to be out of work at a moments notice.

You need to be willing and able to keep up with technology trends if you are going to contract. Every 5 years or so, there is a major technology shift that can obsolete skills (think client-server, web, mobile). As you get older, some find it harder to embrace new technologies and can be left with skills that are increasingly only used in legacy systems. This, in itself, may be no bad thing. Ask yourself will you still be willing to do this at age 50?

You need to be located where there are lots of opportunities. In Ireland that would be Dublin. London is probably the best contracting location in the world - there is ALWAYS another bank looking for people. On the other hand, contracting in small town Ireland can be very risky.

You HAVE to be aggressive with your career. No-one else will look after you. If a job or a technology isn't working for you, you have to be ruthless and leave it. As a contractor, you have a very clear relationship with your client. You provide him with time and expertise, he provides you with money. That's it, nothing more.

Bottom line is position yourself so that there is more demand for your skills than supply. It doesn't matter how small that supply is as long as the demand is greater!

It's not for everyone but it's a good life. I've been doing it for 25 years and I wouldn't go back to the corporate rat-race. I do regret not getting involved in a successful start-up. Then again, who doesn't?

Gone West · 08-01-2015 12:54pm

moycullen14 wrote: »

You should budget on contracting 220 days per year - that's 44 weeks. You'll miss a few days sick, all bank holidays, be between contracts and holidays.

You should probably budget about 10% for costs of contracting - accountancy, various insurances (health, critical illness, PHI, life insurance) and any other benefits that you might have got as an employee. Maybe deduct 5% as well for company pension contributions.

It used be the case that there were serious tax benefits to contracting in terms of expenses, etc. These have been seriously eroded over the years and the recent revenue 'project' in Munster has resulted in back-claims for over paid expenses.

So a ballpark figure for a contractor on 350/day would be a salary equivalent of about 65-70K. Certainly that is higher than an average developer might get so it seems like a good idea, from a financial perspective.

Longer term, there are some issues that need to be considered:

There is no 'career' progression. You may be perfectly happy with this. There is no incentive (or requirement) to go into 'management'.

There is no security. Again, is this really any different from the permies?

You tend to get the crappy jobs. The interesting architecture/green field projects tend to go to the permies.

Contracting rates have shrunk over the years and will probably continue to.

You need to be prepared to be out of work at a moments notice.

You need to be willing and able to keep up with technology trends if you are going to contract. Every 5 years or so, there is a major technology shift that can obsolete skills (think client-server, web, mobile). As you get older, some find it harder to embrace new technologies and can be left with skills that are increasingly only used in legacy systems. This, in itself, may be no bad thing. Ask yourself will you still be willing to do this at age 50?

You need to be located where there are lots of opportunities. In Ireland that would be Dublin. London is probably the best contracting location in the world - there is ALWAYS another bank looking for people. On the other hand, contracting in small town Ireland can be very risky.

You HAVE to be aggressive with your career. No-one else will look after you. If a job or a technology isn't working for you, you have to be ruthless and leave it. As a contractor, you have a very clear relationship with your client. You provide him with time and expertise, he provides you with money. That's it, nothing more.

Bottom line is position yourself so that there is more demand for your skills than supply. It doesn't matter how small that supply is as long as the demand is greater!

It's not for everyone but it's a good life. I've been doing it for 25 years and I wouldn't go back to the corporate rat-race. I do regret not getting involved in a successful start-up. Then again, who doesn't?

I'd have to disagree with about half of your points.
Mostly the contractors get the good jobs that the perms aren't even able to understand, hence the reason for bringing in help.

IMO Contracting offers much better career progression, each new contract is a diagonal move sideways into a new company and upwards in rates, responsibilities, experience, and seniority.

Rates are increasing in the last 2 years, at least in my area of SME.

Being out of work, and security issues has never been a factor for me, the industry is booming in general.

Everything else you've said I agree with 100%

yop · 08-01-2015 1:10pm

Not sure Moycullen14, I've had a 40% increase in my rate since I start in 2010 and I could get another 10 or 20 a day if I move and I'm contracting into a Galway company.
I've worked into 2 Dublin companies also when I started out, both allowed me to work remotely.
The rate in Dublin for my skillset is looking at 400-450 a day, it was 250 when I did my first contract back in 2010 and any lads I have working up there are all pulling 400+.

Thankfully I have never been out of work and couldn't see it as they just can't get IT heads at the moment and I can't see that changing for a long time yet.

Can't say I got any bad roles, worked into 2 startups also, both in fairness weren't great but outside of that the other work has always been good and aside from 1 company, I was given product specific training.

Maybe I was lucky!

Graham · 08-01-2015 1:29pm

Yop/Fuzzy, I think it's fair to say that my comments and moycullens were fairly sweeping generalisations rather than critiques of your particular career trajectories.

The market is definitely racing ahead at the moment, it's certainly a great time to be a contract developer but the fundamentals still apply. Markets change, contract rates don't always go up, hot technologies come and go. Keep ahead of the curve with your professional development and you can make a fantastic career out of contracting.

Gone West · 08-01-2015 2:09pm

Graham wrote: »

Yop/Fuzzy, I think it's fair to say that my comments and moycullens were fairly sweeping generalisations rather than critiques of your particular career trajectories.

The market is definitely racing ahead at the moment, it's certainly a great time to be a contract developer but the fundamentals still apply. Markets change, contract rates don't always go up, hot technologies come and go. Keep ahead of the curve with your professional development and you can make a fantastic career out of contracting.

I'm fairly sure I've done a contract as a colleague of yours once!

yop · 08-01-2015 2:33pm

Graham wrote: »

Yop/Fuzzy, I think it's fair to say that my comments and moycullens were fairly sweeping generalisations rather than critiques of your particular career trajectories.

The market is definitely racing ahead at the moment, it's certainly a great time to be a contract developer but the fundamentals still apply. Markets change, contract rates don't always go up, hot technologies come and go. Keep ahead of the curve with your professional development and you can make a fantastic career out of contracting.

Without doubt Graham, the hardest thing I am finding at the moment is balancing life/work with a very young family and trying to get some training in also.
As said there is always something new coming into the skill set so I try to do a bit of training once every month, it used to be every week or 2 I'd spend a few hours, but with a young family I find it harder to find them hours.
With a perm job you would be training as part of the role. Definitely one downside.

moycullen14 · 08-01-2015 2:38pm

Fuzzy wrote: »

I'd have to disagree with about half of your points.
Mostly the contractors get the good jobs that the perms aren't even able to understand, hence the reason for bringing in help.

IMO Contracting offers much better career progression, each new contract is a diagonal move sideways into a new company and upwards in rates, responsibilities, experience, and seniority.

Rates are increasing in the last 2 years, at least in my area of SME.

Being out of work, and security issues has never been a factor for me, the industry is booming in general.

Everything else you've said I agree with 100%

The points were meant to be potential problems. Obviously they don't happen in all cases.

You CAN get stuck in a rut if you don't manage it properly. You CANNOT depend on anyone but yourself to manage this.

Rates are increasing at the moment and demand is very high. This has not always been the case. Anyone working in the early 2000's would have seen a sharp decrease in rates and opportunities, post dot-com/Y2K. It does happen and it will happen again. If you are not prepared for it, you may get hurt. Unemployment is never an issue until you are unemployed.

I was giving advice about how to manage a contracting career over a long period of time - say 20+ years.

As far as getting the interesting work - go to contracts where they want your skills, not just another body.

You may not have worked in an environment where skill utilisation was completely upside down or where people maneuvered themselves into positions they were incapable of doing and for that you should be grateful. Believe me it DOES happen.

Graham · 08-01-2015 3:02pm

Fuzzy wrote: »

I'm fairly sure I've done a contract as a colleague of yours once!

You never know, I've been knocking around a while

yop wrote: »

Without doubt Graham, the hardest thing I am finding at the moment is balancing life/work with a very young family and trying to get some training in also.

That's a life-stage where many contractors would bail for the permy roles.

moycullen14 wrote: »

Anyone working in the early 2000's would have seen a sharp decrease in rates and opportunities, post dot-com/Y2K.

Absolutely, Y2K projects ending everywhere, 9/11 and the dot com bubble bursting all around the same time. Most people with a contract kept their heads down and their mouths shut for a couple of years.

On the plus side a rapid contraction of the market culls the fairweather contractors out fairly sharpish and they inevitably never go back to contracting again. When it's followed by a rapid expansion of the market, the increased demand for (and more limited supply of) contractors sees opportunities and rates pick up very quickly. I personally think that's getting close to where we are now.

The Corinthian · 08-01-2015 5:12pm

yop wrote: »

200 a day is shocking low and especially for Dublin.

Indeed. The only contractor I ever saw on anything even close to that only got his low rate because he spoke practically no English, and even he got more.

moycullen14 wrote: »

Anyone working in the early 2000's would have seen a sharp decrease in rates and opportunities, post dot-com/Y2K.

If it hadn't been for the State / semi-State sector, I would have spent 2002 living under a bridge.

Gone West · 08-01-2015 5:37pm

moycullen14 wrote: »

You may not have worked in an environment where skill utilisation was completely upside down or where people maneuvered themselves into positions they were incapable of doing and for that you should be grateful. Believe me it DOES happen.

I've been contracting for over 10 years, all over the world, and of course I haven't seen it all.
I'm also just giving my perspective. Not everybody needs their hand held, and some people (like myself) actually prefer not to have the "benefits" of a perm role.

But I am familiar with this problem. It's a paradox where people inevitably get promoted into incompetence!
It's http://en.wikipedia.org/wiki/Peter_Principle

moycullen14 · 08-01-2015 5:48pm

Fuzzy wrote: »

I've been contracting for over 10 years, all over the world, and of course I haven't seen it all.
I'm also just giving my perspective. Not everybody needs their hand held, and some people (like myself) actually prefer not to have the "benefits" of a perm role.

But I am familiar with this problem. It's a paradox where people inevitably get promoted into incompetence!
It's http://en.wikipedia.org/wiki/Peter_Principle

I think it's more

http://en.wikipedia.org/wiki/Dilbert_principle :eek:

yop · 08-01-2015 6:02pm

moycullen14 wrote: »

I think it's more

http://en.wikipedia.org/wiki/Dilbert_principle :eek:

Well where I am currently that is SHOCKINGLY true, and I found it in another company I worked in, to such an extent I just left as the guy was going to be our manager and was incredibly incompetent and was going to make key decisions on what the dev department was going to do.
He was demoted about 18 months later!!

But in this place you wouldn't believe the idiots who are getting promoted

I must do a course in "Talking loads of shi*T*e words top men love to hear"

krazyklown · 08-01-2015 11:27pm

Hi guys,

Just a quick question regarding moving into contracting - what type of experience level do you need in order to operate efficiently?
I have been considering for a while now of making the switch - my biggest concern is knowing whether I have the necessary expertise.

Some great insight on this thread BTW.

Thanks,
KK

Contracting or permanent?

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