IT Contracting
Discussion
How do you know when it's time to make the jump from perm to contractor?
I have been in the industry for just over 3 years now and have worked with various contractors over that time. The vast majority are much more skilled than I am admittedly, however some are average at a push - Whenever I come across an 'average' contractor, I think to myself 'Wow, he's earning probably quadruple what I am' for doing the same, if not a worse job than me. I've always envisaged that contracting is where I'll end up after I have built up enough experience in my field (DevOps), just how do I know when that is exactly?
I have been in the industry for just over 3 years now and have worked with various contractors over that time. The vast majority are much more skilled than I am admittedly, however some are average at a push - Whenever I come across an 'average' contractor, I think to myself 'Wow, he's earning probably quadruple what I am' for doing the same, if not a worse job than me. I've always envisaged that contracting is where I'll end up after I have built up enough experience in my field (DevOps), just how do I know when that is exactly?
Before taking the leap you should have saved enough reserves to survive if you end up losing your first gig. My first contract lasted 9 months and then the recession hit (jan 2009). It was a s
te old tough year until 2010 got going - prob should have taken a lesser role when they were available in hindsight. With brexit round the corner it could be a tough year or two ahead.
I would say if you fancy your chances at returning to current employer or landing a new role if contracting goes tits up, then you are half way there.
Only you really know if your skills are at least average. I would assume dev ops roles would be difficult places to hide if you don't cut the mustard..
Could you ask one of the contractors you work along side or have recently worked with for their input?
te old tough year until 2010 got going - prob should have taken a lesser role when they were available in hindsight. With brexit round the corner it could be a tough year or two ahead.I would say if you fancy your chances at returning to current employer or landing a new role if contracting goes tits up, then you are half way there.
Only you really know if your skills are at least average. I would assume dev ops roles would be difficult places to hide if you don't cut the mustard..
Could you ask one of the contractors you work along side or have recently worked with for their input?
as a contractor for teh past 20 years, before you compare your perm with the contractors rate factor in a few things ....
1 - no holiday pay - how many weeks paid (and sick) leave do you get a year as a staffer
2 - If you are in projects, how many weeks through the year do you have of "bench time" where a contractor would probably be let go
3 - Equivalent health care payment
4 - Equivalent pension
5 - How quickly can you save up at least 3 or 4 months salary as a buffer for a lean period (as mentioned above)
Do those numbers, and if your contract rate still looks like being worth the risk, then it is.
The flip side is that once you have been contracting for a long time you start looking at all the benefits and thinking "i don't want them, as i already have my existing personal ones nicely grandfathered that i would have to maintain on top of the company benefits.
1 - no holiday pay - how many weeks paid (and sick) leave do you get a year as a staffer
2 - If you are in projects, how many weeks through the year do you have of "bench time" where a contractor would probably be let go
3 - Equivalent health care payment
4 - Equivalent pension
5 - How quickly can you save up at least 3 or 4 months salary as a buffer for a lean period (as mentioned above)
Do those numbers, and if your contract rate still looks like being worth the risk, then it is.
The flip side is that once you have been contracting for a long time you start looking at all the benefits and thinking "i don't want them, as i already have my existing personal ones nicely grandfathered that i would have to maintain on top of the company benefits.
Thanks for the response both - I should've been more detailed in my opening question. I have approximately 5 months of salary saved. I'd rather not go into it but I could, this continues to build as I don't plan on contracting anytime soon as I've just started a new role which I'm learning quite a lot. I just got sent a very interesting contracting job, it looks very attainable so I'm pondering the idea in more depth.
To clarify, I have spoken to my former contractor colleagues and they have all said that I should just take the leap and learn to swim in the deep end. I feel as though I basically did this when leaving my first employer to join a private sector company which expected a lot of me and I had to learn quickly. So I know what it'll be like in a sense, just amplified I imagine.
I'm just worried about my skill set mostly, I'd like to think I'm competent at most components of my role, however I expect that an employer would want a contractor to be at the top of their profession? But as I said above, I have seen quite a few pretty st contractors who're essentially stealing a living, could I (or rather should I), be one of those? Or wait until I have another 2-5 years worth of experience to call upon?
I have worked out that a mid-level DevOps contract is £400-£500 where I live, using https://www.sjdaccountancy.com/contractor_calculat... says I'd be taking home £6619 - £8519 per month respectively or anywhere in between which I can safely say is more than I'm earning now, even with my generous pension/holidays package.
To clarify, I have spoken to my former contractor colleagues and they have all said that I should just take the leap and learn to swim in the deep end. I feel as though I basically did this when leaving my first employer to join a private sector company which expected a lot of me and I had to learn quickly. So I know what it'll be like in a sense, just amplified I imagine.
I'm just worried about my skill set mostly, I'd like to think I'm competent at most components of my role, however I expect that an employer would want a contractor to be at the top of their profession? But as I said above, I have seen quite a few pretty s
t contractors who're essentially stealing a living, could I (or rather should I), be one of those? Or wait until I have another 2-5 years worth of experience to call upon?I have worked out that a mid-level DevOps contract is £400-£500 where I live, using https://www.sjdaccountancy.com/contractor_calculat... says I'd be taking home £6619 - £8519 per month respectively or anywhere in between which I can safely say is more than I'm earning now, even with my generous pension/holidays package.
S9JTO said:
How do you know when it's time to make the jump from perm to contractor?
Look at the roles being advertised. Many specify a minimum amount of experience, therefore if you meet that there's no harm in applying.I found that talking to other contractors was also beneficial before making the jump. They will have lots of hints and tips when it comes to salaries, accountants and so on.
Finally, it is unlikely that contractors are on quadruple what you earn, unless you are very underpaid. Look at the daily rates for the roles advertised and assume you work about 44 to 46 weeks a year therefore taking into account bank holidays, leave and other days off. This will give you a realistic indication of your likely income.
S9JTO said:
I have worked out that a mid-level DevOps contract is £400-£500 where I live, using https://www.sjdaccountancy.com/contractor_calculat... says I'd be taking home £6619 - £8519 per month respectively or anywhere in between which I can safely say is more than I'm earning now, even with my generous pension/holidays package.
It's somewhat naive to believe those numbers. That calculation assumes a lot (including that you work 5 days a week for 52 weeks of the year), and that you leave about £40k pa in the business (i.e. untaxed so they count as take-home somehow). Reality will be somewhat lower, and even less so if/when caught by IR35CzechItOut said:
Look at the roles being advertised. Many specify a minimum amount of experience, therefore if you meet that there's no harm in applying.
I found that talking to other contractors was also beneficial before making the jump. They will have lots of hints and tips when it comes to salaries, accountants and so on.
Finally, it is unlikely that contractors are on quadruple what you earn, unless you are very underpaid. Look at the daily rates for the roles advertised and assume you work about 44 to 46 weeks a year therefore taking into account bank holidays, leave and other days off. This will give you a realistic indication of your likely income.
Based on the lower figure I quoted above of c£6.6k it's almost exactly triple my take home. If I take in to account my pension, holidays and sick pay etc then it's safe to say it's still a fair bit more than double. Plus the idea of being my own boss in many ways is very appealing to me. I found that talking to other contractors was also beneficial before making the jump. They will have lots of hints and tips when it comes to salaries, accountants and so on.
Finally, it is unlikely that contractors are on quadruple what you earn, unless you are very underpaid. Look at the daily rates for the roles advertised and assume you work about 44 to 46 weeks a year therefore taking into account bank holidays, leave and other days off. This will give you a realistic indication of your likely income.
But I appreciate your points, I know it isn't as simple as a large pay rise, there's a lot of related stresses involved. However, I still think that if it wasn't worth doing then all of the best wouldn't be doing it!
S9JTO said:
CzechItOut said:
Look at the roles being advertised. Many specify a minimum amount of experience, therefore if you meet that there's no harm in applying.
I found that talking to other contractors was also beneficial before making the jump. They will have lots of hints and tips when it comes to salaries, accountants and so on.
Finally, it is unlikely that contractors are on quadruple what you earn, unless you are very underpaid. Look at the daily rates for the roles advertised and assume you work about 44 to 46 weeks a year therefore taking into account bank holidays, leave and other days off. This will give you a realistic indication of your likely income.
Plus the idea of being my own boss in many ways is very appealing to me. I found that talking to other contractors was also beneficial before making the jump. They will have lots of hints and tips when it comes to salaries, accountants and so on.
Finally, it is unlikely that contractors are on quadruple what you earn, unless you are very underpaid. Look at the daily rates for the roles advertised and assume you work about 44 to 46 weeks a year therefore taking into account bank holidays, leave and other days off. This will give you a realistic indication of your likely income.
Do you mean as a contractor you are treated as lowest of the low, when the employees go to the pub you are not invited or when there is a function and contractors are not allowed to go?
Money wise it is great but every other single aspect is s
t I am afraid.AndStilliRise said:
Do you mean as a contractor you are treated as lowest of the low, when the employees go to the pub you are not invited or when there is a function and contractors are not allowed to go?
Money wise it is great but every other single aspect is st I am afraid.
I think that depends on the company. I've been invited to every social event my team has arranged since I join. The only difference is I have to pay my own way.Money wise it is great but every other single aspect is s
t I am afraid.S9JTO said:
But I appreciate your points, I know it isn't as simple as a large pay rise, there's a lot of related stresses involved. However, I still think that if it wasn't worth doing then all of the best wouldn't be doing it!
The other thing to bear in mind is that you are now responsible for your learning and career progression. With only three years experience I would be worried about getting left being as technology moves on so you would have to ensure you spend some time and money keeping yourself up to date with the industry and the appropriate qualifications.S9JTO said:
How do you know when it's time to make the jump from perm to contractor?
You are not ready.It requires using your own initiative, you appear to not have thought of searching and reading the other hundred similar threads that have been created on here for your generic question. Employee material I am afraid.
Edited by hyphen on Monday 12th March 10:02
hyphen said:
S9JTO said:
How do you know when it's time to make the jump from perm to contractor?
You are not ready.It requires using your own initiative, you appear to not have thought of searching and reading the other hundred similar threads that have been created on here for your generic question. Employee material I am afraid.
Edited by hyphen on Monday 12th March 10:02
AndStilliRise said:
Define boss?
Do you mean as a contractor you are treated as lowest of the low, when the employees go to the pub you are not invited or when there is a function and contractors are not allowed to go?
Money wise it is great but every other single aspect is st I am afraid.
That's definitely not the case in the companies I have worked. In my current company it's almost the reverse.Do you mean as a contractor you are treated as lowest of the low, when the employees go to the pub you are not invited or when there is a function and contractors are not allowed to go?
Money wise it is great but every other single aspect is s
t I am afraid.hyphen said:
You are not ready.
It requires using your own initiative, you appear to not have thought of searching and reading the other hundred similar threads that have been created on here for your generic question. Employee material I am afraid.
I've not once said that I am ready? My whole question is asking when do you "know"?It requires using your own initiative, you appear to not have thought of searching and reading the other hundred similar threads that have been created on here for your generic question. Employee material I am afraid.
Edited by hyphen on Monday 12th March 10:02
For the record I have done my own research, probably not enough as I'm not intending on doing so in the near future. I just thought it'd be useful to gain the insight of some seasoned IT professionals aside from former contractor colleagues.
I thought about going IT contracting, I even bought a diesel car as was expecting to travel a lot. Some of the partners I work with earn £700-£1000 per day doing whay I do. However I realised due to having 2 young children at the time that my spare time was more valuable to me than the extra money was. Being a permanant employee does mean I get the perfect work/life balance. I would suggest you experience other areas of IT first, see if you can get yourself on a secondment and see how areas outside of devops work.
Where I work, IT contractors are made to feel like part of the company, they get invited to the xmas doo but have to pay.
Some IT contractors are cowboys though, if you can talk bks but have no IT experience, you can still be a IT contractor!
Where I work, IT contractors are made to feel like part of the company, they get invited to the xmas doo but have to pay.
Some IT contractors are cowboys though, if you can talk b
ks but have no IT experience, you can still be a IT contractor!S9JTO said:
I have worked out that a mid-level DevOps contract is £400-£500 where I live, using https://www.sjdaccountancy.com/contractor_calculat... says I'd be taking home £6619 - £8519 per month respectively or anywhere in between which I can safely say is more than I'm earning now, even with my generous pension/holidays package.
I have been a contractor for over 20 years - I remember putting down figures such as you have done before I started - If you are on a 4-500 a day contract you wouldn't be taking home 8.5K a month - (I also wouldn't touch SJD with a barge pole - although thats my personal opinion).You do not get paid on bank holidays and you will need holidays. You also do get sick. Some contracts also have furlows - which means you may be forced to take time off.
Contract fees go up and down all the time -
Contracting works for me, I wouldn't do anything else - some people cannot deal with the uncertainty - (notice periods are sometimes 2 weeks - your contract can finish at any time)
If you are in a position to try it out go for it - If you don't like it you can always get another permi job.
For my first contract I was lucky in that I rang a guy who recently left and asked for some tips on requesting his old permie job.
He was my mentor in the development (mostly coding) skillset I had when I joined some 18 months earlier ( i did have 12 years experience in being a developer in other areas). He said to me the current contract role he had was looking for two more people and why not take the plunge, he was willing to vouch for me and be help out if really stuck.
After a night deliberating i asked for a career break for six years and applied for the role. 3 week later I started. If he hadn't have been able to explain what the client expectations were, how easy the work was and how similar to my permie role it was I prob wouldn't have left for another 18 months.
If you can find a known quantity who is able to explain to you the differences between what he does working for your current employer and the expectations of going elsewhere it may help you identify the gaps you need to fill.
He was my mentor in the development (mostly coding) skillset I had when I joined some 18 months earlier ( i did have 12 years experience in being a developer in other areas). He said to me the current contract role he had was looking for two more people and why not take the plunge, he was willing to vouch for me and be help out if really stuck.
After a night deliberating i asked for a career break for six years and applied for the role. 3 week later I started. If he hadn't have been able to explain what the client expectations were, how easy the work was and how similar to my permie role it was I prob wouldn't have left for another 18 months.
If you can find a known quantity who is able to explain to you the differences between what he does working for your current employer and the expectations of going elsewhere it may help you identify the gaps you need to fill.
I've been contracting 7 years.
I echo whats been said above especially about the number crunching. Do not assume you can just deduct tax and work from there. You need to account for holidays, pension, health etc. Then you need to make sure you can survive for months if you were out of work tomorrow. Its not uncommon to be a few months between contracts, especially around Christmas.
Also be very aware of IR35, this could have a huge impact on contracting in the next few years. Expect to pay much more then a permie in tax, and have none of the benefits.
I would not make the jump without being sure you can get a contract. I tested the water by applying for a few and getting an interview. Once i knew i could get that far i knew I would secure a contract. In reality when I made the jump it was harder than I thought. It took me 2 months of applying for about 5-10 roles a day before I got my first role. Since then its been good and I've only had very short periods between contracts.
I'm finishing my current contact mid April so will start the search for a new role very soon.....anyone need a good Business Analyst
I echo whats been said above especially about the number crunching. Do not assume you can just deduct tax and work from there. You need to account for holidays, pension, health etc. Then you need to make sure you can survive for months if you were out of work tomorrow. Its not uncommon to be a few months between contracts, especially around Christmas.
Also be very aware of IR35, this could have a huge impact on contracting in the next few years. Expect to pay much more then a permie in tax, and have none of the benefits.
I would not make the jump without being sure you can get a contract. I tested the water by applying for a few and getting an interview. Once i knew i could get that far i knew I would secure a contract. In reality when I made the jump it was harder than I thought. It took me 2 months of applying for about 5-10 roles a day before I got my first role. Since then its been good and I've only had very short periods between contracts.
I'm finishing my current contact mid April so will start the search for a new role very soon.....anyone need a good Business Analyst
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff