Contract rates 2019

mrcheez wrote: »

It's simple to go back to permie when no contracts are around, and then switching back to contracts when they become available.

You can put the company on hold with no penalties.

Best of both worlds and you're never out of work, plus can avail of the best rates available at the time.

Clearly stated by someone who was not around when the dot.com bubble burst !! When that crash hit IT, there were no IT jobs to be had anywhere - permanent or contract, unless you were very lucky. Most companies where letting go large amounts of people themselves so the idea of hiring an ex-contractor looking for a port in a storm was pretty slim.

The last recession was not as painful as the dot.com bubble for IT, but rates did fall and have stayed on the lower side (in my personal opinion) since. The difference was it was possible to get roles during the recession, but the rates/salaries had fallen a good bit.

Switching between the two is not that easily done. It also means that any 'benefits' you have set up like life assurance (death in service), pension, income protection etc have to be released and reapplied for when you go back contracting and likely to cost a lot higher as you are older.

Funnily enough, I think its easier get a contract job in a mild recession than a permanent job as its less risk for the company and many companies are blocked from taking on additional head count during a recession, but can take on a resource that is capitalisable !

On a different note, if I saw a CV in front of me for someone who switched and changed every 12-18 months applying for a permanent job, I would seriously question it and say you were simply looking for something while the market was slower. I would definitely not 'invest' in you as an employee until you have proven commitment, which your CV would scream is lacking.

gnf_ireland wrote: »

Absolutely agree, but not sure we will see the serious tech bubble bursting like dot.com - but there will be a slowdown within tech and the economy at large within the next 12-18 months (maybe sooner)

You say that, but thing is, back in 2000 there were definitely signs of weakness. Parts of the bubble were beginning to deflate. It only caused other parts to inflate even quicker if I remember right. But the general feeling I got was one of disease. It felt, unsustainable, unbalanced, teetering. Like this past 12 months.

And thus it proved a year or so later. I was unemployable for several years after. But I learned to recognise that feeling.

I felt the same alarm bells around 2007-2008, and hoarded cash. Even then I was deeply unprepared for 2009 onwards. I'm not minded to repeat my past mistakes of underestimating potential severity.

I think its a good call to consider moving permie now (especially if you dont have reasonable financial security or large commitments),

I now have small children and an unemployable wife due to her giving up her career. That makes me the most risk adverse that I have ever been in my life.

SEPARATELY, recessions tend to trigger major innovation as people who find themselves out of work look to keep themselves busy with little projects and can end up spinning up companies as a result as things start to improve

It is a statistical fact that the average lifetime earnings for those in tech who do not get laid off during a bubble burst far exceed those who do get laid off. For every one who succeeds with a major innovation due to time freedom, there are 99 who do not. Averaging means that the rational choice is to make extremely sure you don't get laid off during a downturn.

And that means don't look expensive to HR when the axe starts to fall. Contractors are very cheap to lay off. Overpaid employees also rise to the top of any pile. It always ends up swinging the other way, in the end.

Niall

mrcheez wrote: »

I've been in IT since 2001 and have 0 problems jumping around between permie and contracts or even taking out several months between to go traveling.

It's never stopped me from walking into a job whenever I wanted to go back into it and the private pension is not affected.

Anyway this is all completely off topic which was simply a query about what the current rates are.

As I'm the OP this thread has gone off topic so please close thread, cheers

Good for you and maybe you have been exceptionally lucky or maybe you have decided to go travelling when things are economically tighter and therefore missed the worst of it.

But I do have a question for you on the thread. Why would someone who has been flicking between contracting and perm since 2001 be even asking such a question around calculation of day rates? Surely you have been a contractor many times before and therefore know how to calculate your applicable day rate and the number of days to use? Maybe I am missing something here!

Good luck in whatever you decide to do...

mrcheez wrote: »

Ah I had a long stint in permanent up until several months ago so was just double checking what the current rates were as opposed to just relying on one resource as I was due a rate change.

But the question was on HOW you calculate a day rate (number of days) rather than the rate itself?

Good luck with the rate change and hope it works out for you

mrcheez wrote: »

There were two questions. What the going rate was and how people these days would calculate their rate as things might have changed since I was last in the game.

I was happy to accept the "advertised" rate for the contract initially though I wanted to arm myself coming up to rate review time.

Well to explicitly answer your question, I consider the calculation to be

day rate * 220 days = contract reward
contract reward / 1.5 = permanent salary approximation

I use 220 days as
52 * 5 = 260 - 10 (public holidays) - 25 (vacation days) - 5 (training/education days)
Anything extra you take on top of that is personal and by choice normally

the 1.5 factor is 50% higher than permanent salary
20% to cover various costs such as accountancy, training, health insurance, other insurances
30% risk weighting for the times you are out of work


Anything above 1.5 is a bonus in my view, and should be jumped on when possible - but never assumed
Anything below 1.5 needs to be considered with caution
Anything below 1.2 are you are seriously undercutting yourself and would be better off in a permie role

Tikki Wang Wang wrote: »

Sounds optimistic no?

Which part? The 1.2 factor or the 1.5 factor ?

smacl wrote: »

This is no doubt true, but I think that to move from high average life time earnings to the top few percentile life time earnings you probably need a level of ownership in what you do. I totally get being risk adverse but often the big rewards only come to those who take risks. Any company will always pay FTEs the minimum amount required to keep those FTEs content while products are profitable, with dividends going to shareholders. When things get rough, they'll drop the contractors first, then the more expensive devs and put projects into maintenance mode until such time as they either turn a profit or can be sold off.

Absolutely agree with this statement. To get decent rewards, people have to take some level of risk. Contracting by its very nature includes an element of risk - especially in the long run. But to get big rewards, much higher levels of risk are needed to be undertaken. Yes, only a small fraction of these will be successful - and the remainder are likely to fail - but this is the definition of risk.

And 100% agree re dropping contractors are dropped first, and then probably cut internal costs including potential wage cuts, and potential layoffs. Companies need to make money, and if they don't they will take corrective action to resolve it as best they can.

14ned wrote: »

Absolutely yes, I agree. But timing is key here. You want to take risk when it is less risky to take risk, if that makes sense. The best time to take career enhancing risk is just at the beginning of an upturn, not too early that you've overreached, not too late that you miss the upturn.

It is unwise to take risk at the end of an economic expansion. The cards are stacked against you, it's wisest to hunker down and wait it out.

Niall

Yes, but if someone has been laid off/contract not renewed, and they are unable to get a new job, then the risk undertaken is actually much lower. There is no real opportunity cost for loss of earnings.
That is why you will see much more small scale innovation happening during a recession, and as the economy picks up again, some of these ride the wave of growth, whereas others are abandoned and the founders go back to the 'day job'

Ezequiel Purring Witchcraft wrote: »

Contractors aren't always dropped first. You'd assume that, but a department can have a different budget for contractors and for permanent salaries. I've known permanent staff to be laid off only to be immediately employed as contractors doing the same thing.

I'm sure this is the exception, not something to bank on though.

It very much depends on the size of the company and whether the company is up for sale or not. Yes contracts tend to come from different budgets, but also do not directly impact the balance sheet. There are ongoing liabilities associated with employees.

I am sure anyone who was laid off and rehired as a contractor doing the same thing would have a clear case under employment law. The whole thing with laying people off is you have no role that they can do within the company - unless of course its voluntary in which case some people are delighted with the payout.

And yes, in exceptional cases, contractors are kept on while permanent staff are let go but that is likely to be under voluntary schemes only. Under a compulsory scheme, this would be exceptionally difficult to swing unless the skills were completely different (finance v IT or something)

colm_c wrote: »

IMO, there should be a bigger gap between contractor and permanent, otherwise it doesn't seem worth it for the risk.

When I started contracting in 1997, there was a massive difference.

That gap has been steadily closing since then. Many of my colleagues are going back perm after 10+ years contracting.

Dev rates have very much flatlined in the past 7 years and haven't been keeping up with even basic inflation.

Hi everyone. I will kick this post back to live with a question, if you don't mind.

What is a current contract rate for a web backend developer? I do realize contractors would value themselves differently but I'm looking for some general (perhaps avg or range) numbers for junior and senior roles and we can take PHP or RoR stack as an example (I think those two might be on pair in terms of rates).

Search in google gives some idea of this based on various surveys but would love to hear it directly from other contractors

John_Mc wrote: »

I'd say there are very few PHP contracting roles out there because it's not a framework/language adopted by many enterprise level businesses who would be the primary market for hiring contractors.

Indeed. Businesses look for contractors when they want either a body to fill a slot (e.g. maternity cover), or they need a specialist for a very specific bit of piecework where such a specialist would be unsuited, or hard to keep busy, if brought onto the permanent staff.

There's also culture involved. Certain types of enterprise e.g. banks like to hire a lot of contractors. They see IT folk as a cost overhead. Other types of enterprise e.g. big tech, try to avoid it as much as possible. They tend to see IT folk as a revenue generator.

PHP I would suspect doesn't fit into any of these categories, hence few to no contracting roles available. PHP, if seen as a cost overhead, is probably completely outsourced. Whereas if seen as a revenue generator, you'd want all PHP folk as full time employees.

Niall

For my current job, I applied to them via an advert for a senior PHP position. (I was a junior PHP dev at the time). They hired me as a frontend developer, as they were really impressed with my interview, and CV (I was stunned they were tbh). They are still looking for a senior PHP dev and this was in June!

antimatterx wrote: »

You probably timed his very well Niall. Almost to perfection.

Well, nobody could have predicted covid back when I wrote the above. I assumed a general downturn, not such a sharp one which particularly hits only a specific subsection of the population, and not anybody else. But you're right that I had lucky timing. And, after eighteen months of development, my second only ever in my career new codebase goes live into production next month. It's been a lot of hours worked, too many actually, but it's so rare to actually create a new codebase, and see it go into service, in anyone's career. Within six months it'll be capturing all the trades in the US, live, into a millisecond-latency searchable database, and it happily can scale to global capture and query not just with today's trading volumes, but 50x that many.

As usual I can't say anything about contract rates outside C++, but they've been hopping into my Inbox recently. There was a back off there around March-April, but June has been unusually hectic in terms of recruiter approaches, relative to say June last year.

The most interesting approach I received last few months was from a fellow wanting me to completely rebuild a Dublin trading office's front end. They were an old school firm, still using Excel for everything. Pay was very attractive for Ireland, but still far lower than my present pay as a permie paid as if in the US, so I had to say no.

I was also a little scared off by the desire to use C++ for implementing a trading front end. .NET seemed to me a far better choice, especially as they wanted to integrate the current massive Excel spreadsheets.

But more widely speaking, the number of good C++ roles in Ireland seems to have greatly improved. For a while there it was just medical devices but now even in Cork there are some very nice C++ roles, albeit not particularly well paid. But interesting work, at least, and not medical devices.

Niall