OJ’s rants What would OJ do?

2Mar/1031

I’m so impressed I want to pay you less

Slave driverThe title of this post is a statement that I've heard a few times in the past while at work. The people who said it might not have used those exact words, but the intent is the same. Usually I hear it in the following form:

"We're very happy with the work you've done for us as a contractor. We want to keep you on, but would like you to take a job as a permanent employee and continue to work on the project."

Once they've made this point, they then feel the need to harp on about the good points of becoming a permanent employee. Things such as job security, sick/annual leave and better hours tend to get mentioned. All of them are complete bullshit of course.

There is no such thing as job security. Sick and/or annual isn't enough to make up for the difference in pay. Hours tend to always be worse when you're working for the man, because you're expected to do whatever needs to be done regardless of the hours. This is worse if you're working on mission-critical stuff.

Now I have no aversion to doing my fair share of extra work and mission-critical stuff is way more interesting. I often enjoy it. What I don't enjoy is the expectation for me to give away my free time to my employer for no reward. I don't get extra time off in lieu. I don't get overtime pay. I don't get ownership of the software. I don't get to see the result of the extra effort I put in. I'm just expected to do it. In other situations I'd be happy to do it, but 999 times out of 1000, the situation isn't right.

I've even worked for companies in the past who expect you to give up a lot of your personal time even if there isn't anything critical that needs to be done. I was expected to write small applications and create other assets that the company could use in future projects. At first this seemed like it could be fun. But the cold hard reality was that all of the effort was totally wasted, because none of the things that were created ever got used.

As a contractor, the view from the perspective of the client is different, especially if you're on an hourly rate. Everything boils down to a financial cost. You're more likely to get a fair deal as a contractor than you are as a permy (at least here in the Brisbane market) because you're entitled to make them pay for the time and effort you put in.

Slave of the monthI realise that this makes me sound rather mercenary. In all honesty, I'm not mercenary. I love technology. I love building software. I don't go to work just so that I can get paid. In many ways I would work for less pay if the conditions were right. Unfortunately, I am yet to come across a job where those conditions are right. I've certainly given it a shot in the past. I took a substantial pay-cut to work for Electronic Arts back in 2005 so that I could work on something that I really wanted to work on. I thoroughly enjoyed it. As far as the technology and the challenges are concerned, it's the most fun I've ever had at work. Unfortunately, the experience I had there led me to believe that the lifestyle isn't sustainable (at least not for me and my family).

Would I do the same again for another job? Definitely. But the only company I would do it for would be Basho and my Erlang-fu is not yet up to scratch so I wouldn't be considered. Outside of Basho I'm not aware of any other company or work that excites me as much. So for now I will probably remain a contractor, and try to move around and add as much value as I can on a variety of projects, keeping up to speed on many different types of technology.

So if you're reading this, give me a few good reasons as to why permanent work is better than contract work. Why should I consider it? Would you consider it? If you're a permy, are you looking to go contracting, and why?

Feedback and comments are appreciated :)

  • OJ
    Some would say yes :) I don't mind being asked, so long as you don't mind if I don't answer! :)

    You can find out the going rates for contracting in Brisbane by looking at a variety of job sites. Bear in mind that they will vary depending on technology, skill level, experience, etc.
  • Maybe it's rude to ask, but what sort of rates can an IT contractor expect to get in Brisbane?
  • OJ
    It doesn't happen every time (eg. Gov agencies tend not to do it) but it does happen often :)
  • Amanda Leach
    hence the cycle keeps repeating. The permy offer sounds so predictable and must have you rolling your eyes a lot.
  • OJ
    Long time no see Kel :) How are ya mate?

    Variety is indeed one of the big wins for me too. I need to work on exciting software if I'm going to be with it long term, and 99.9% of perm jobs just don't have that. At least with contracts you can get a variety of crap gigs instead of one single crap gig ;)

    I agree with your point regarding control. I feel a bit more empowered as a contractor with regards to the work I can do. Having said that, I think part of the reason I didn't feel that as a permie was because of the companies I worked for. I think that experience would vary a lot from employer to employer!
  • kellpittock
    Since I've been contracting, I haven't looked back! Although sometimes I have wondered about my decision <<one particular company we have in common mate ;) >>

    I think that if you are confident in what you're doing and build up a great reputation as a trusted resource in your given field, then the scary thought of "What if I don't get work?" when deciding to contract or newly contracting disappears and is replaced with "Why didn't I do this sooner?" Keeping a professional attitude also guarantees repeat business and helps develop your network - you never know where you're next opportunity is going to come from!

    The greatest thing about contracting for me is the variety - industries, systems, languages, business processes - and even though some places are great and other places not-so-great, I usually come away with having learnt something new.

    I think contracting gives some control back to the individual. I usually approach interviews with the viewpoint that I am also interviewing them - there has to be a mutual interest, not just a one-sided approach.

    Permanency has it's place for some types of people, but certainly not for everyone!
  • jonathanconway
    It's not necessarily about being a good software engineer, and definitely not about being a generalist. The best paid seem to be the ones who have extremely good competency in a narrow specialization for which there's high industry demand.

    And it has to be the kind of industry where you can either charge a few customers high rates or get a *lot* of customers on lower rates. A junior game developer won't make much of a salary, but if he develops a game himself or assembles his own team, he can make a small fortune, as some of the million-download iPhone games have proven.

    At the end of the day, it's best to learn about your industry, find where the high-paying specialties are, and develop those skills. Being a generalist doesn't work.
  • OJ
    Nice comment Jonathan. I think you're right, the "vested interest" in IT from the business's perspective does indeed have an impact. That is, if the core business isn't technology related, then the upper management team tends to consider IT a support role and should be extremely cheap to run, even when building software packages that support the core business.

    The exception that you're talking about is the case of businesses which have a core business that is made up primarily of software development. They certianly do treat their devs better than in other enterprises, but that doesn't necessarily translate directly to a higher pay rate. Games development is a classic example. Most salaries in the game development world are shockingly bad, even if the developers are standout champions at their game (pun intended).

    I know of only a few people in dev roles that earn that kind of money here in Australia. I'm not earning anywhere near that. Yes they are extremely good at their job. Do I think they're better than me? Nope :) I certainly do devote the better part of my life to software engineering because I love it. Unfortunately for me it doesn't translate to the rate you've mentioned.

    I guess it could be because I'm not "damned good at my game" :) But I'm too ignorant to admit it :-P
  • jonathanconway
    I've been contracting for years and overall enjoyed it more than perm roles.

    I think the problems with perm work in IT have a lot to do with the "separation" of software problems from business problems. There have been many efforts by businesses to bring technology closer to core business operations, but it doesn't always work out right.

    Thus, you'll often find massive companies with an IT department that's treated more as an appendage/necessary evil than as a strategic advantage.

    One exception to all these rules is those small, tight-knit, well run software houses that treat their developers as first rate citizens. I know of some developers in small consulting companies making well more than my contract rates - e.g above 200k p.a

    Of course to get the above you'd have to be damn good at your game, and devote the better part of your life to software engineering.
  • OJ
    See Dan, this is why you should comment more often :) Very insightful stuff.

    The only thing I can comment on is the issue of holidays/sickness etc. When I quote my rate I always take into account that I would work a worse-case of 220 days a year. That's taking out weekends, public holidays, 2 weeks sick leave and 4 weeks annual leave. If I work more than that, it's just a bonus. But that means you're actually taking permanent perks into consideration.

    It's all about what you negotiate really!
  • djmci
    @MononcQc - im in the same boat as you. I'm a full-time employee charging on an hourly basis - if I work more than the minimum, I get paid. I also have the flexibility to do a small amount of contract work (if I want to) if it doesn't interfere or clash with any work clients or deadlines, and I can start and finish early when practical, which gives me the opportunity to teach at my local university a couple of times a week.

    I think it's the best of both worlds but a world that rarely exists for most workers out there. The company I work for is fairly successful, but we aren't a big team - maybe that allows my boss some freedom when it comes to accommodating his full-time team... im not sure.

    But I think it's more than that. I think for an arrangement of ours to exist, management and directors really need to want the same as the workers. Ie - if the boss only cares about the money, the workers will never get a good option - perm OR contract.

    Ive been both perm and contract exclusively in my life, and last time I was contracting, my super was paid for me ON TOP of my contract amount - and that was about as close to being a perm employee as you can get without receiving holidays :)

    As I write this, I realise I've been spoiled for choice, so if I was to ever look for another job, I think it would need to be as flexible as what I currently have, and that would probably mean i'd need to look at contracting again. And while it's true that contracting can offer a higher hourly rate compared to full-time, you need to do your maths, and see if you really will be better off at the end of a year. Do you intend to take holidays, Do you get sick, do you need to pay your own super, how long would your contract be fore - would there be spaces between contracts, will you be working more than one contract ata a time...

    In the end, it really depends on what offer you get right? There's no way i'd swap from contract to full-time if the offer I saw was less (on-balance) than what my contract offered. And like you point out @oj, while there ARE some companies you'd gladly take a pay cut for, they are few and far between :)
  • OJ
    I'm no sure that the stage of life is something that would affect my view on whether to go perm or continue contracting. If I were a stagnant old man who was living in the past, I would probably look to find something permanent in the hope that I'd settle in for an easy run to retirement ;) I'm not yet at that point. That to me isn't a stage of life, but more of a state of mind.

    It's also really different depending on where you live in the world. Right now in Australia I'd have to be offered something pretty darned amazing to consider perm right now. As a colleague of mine said recently: I'd consider going perm, so long as it the deal involved a private jet, and having everyone else change their names to "Ivana Tinkle".

    Good luck on the new gig mate. I'm sorry I haven't written back to your email yet. I will soon though! Enjoy the frozen north ;)
  • OJ
    Thanks for the comment Jason. I know exactly how you feel about putting the effort in for an employer and going the extra mile only to have them take the piss and go as far as to make life worse for you. I'm sorry to hear that your experience involved a redundancy, that's pretty messed up. The times that it's happened to me I've been lucky enough to find something else and have been able to jump ship before being totally left in the lurch.

    I'm the same with you now as far as the contracting thing is concerned. I'm quite happy for it to stay that way for a while too!
  • OJ
    "Come work for me"... says the man who is currently contracting ;)

    I would consider the Erlang production system, but I think you're pulling my leg!
  • OJ
    As much as it's annoying when that happens, it makes some sense (in a way). Contractors are hired as domain experts. Bring a contractor in who is expensive and wears a shiny suit, and for some reason everyone starts to listen.

    Go figure :)
  • Jason
    Well put mate, if it wasn't a better deal for the company they wouldn't ask you to go permanent.
    Having just started my first full time position it's probably a bit too early to comment, also the fact that the role is in Canada is another major reason I can't compare the two.
    I must say tho, that in Ontario the contractor rates are about half what they are in Brisbane, I was lucky to get a 3/4 decent rate as an employee.
    One great deal they have for employees here is the health benefits, it's not just for you but your whole family.
    For me the debate comes down to what stage of life I'm at, right now I'd much prefer to work my fingers to the bone for 60+ hours a week and get directly financially compensated to set myself up a bit. I'm sure in a few year (and I mean quite a few...) I'll have a family and I'll be keen to have all my young families medical bills paid for by my employer.
    However right now, beggers can't be choosers so when a full time job came up at a company that appears exciting I was pretty excited, especially after getting offered numerous positions that pay less than an Australian graduate.
    I may end up eating my words in a few months but until then I'll continue to show up as the eager beaver (no pun intended with their national animal).
  • Great article Oliver - I couldn't agree more with you.

    I've been through the same experience on a number of perm jobs. Excessive overtime, mental burnout and eventual sickness when I finally stopped. All for... what? Not even a thankyou at the end of the day (quite literally).

    I went through one period of working a month solid doing overtime and weekends as a "favour" to the company owner, got sick at the end, never heard a single thankyou then was made redundant a few months later. That was an eye-opener.

    My approach as a contractor is now very different and I think it suits both parties well. I still have people trying to push me back to permanent work but I'm stilling to my guns now and staying on contract. It's a better life all round.
  • Spot on OJ - great post!

    Now when are you going to kick all this contracting malarky to the curb and come and work for me for less than half the pay? I promise to also offer the job benefit/perk of being able to dream writing Erlang for a production system :)

    Oh, and did I mention we also have a very generous 3 month notice period! You'll love it - because I say so... ;-)
  • Michael
    The aspect of contracting I've always liked, is the more you get paid, the more your opinion counts. I love how a permie can give an opinion for years, that is ignored by management. Then an outsider comes in and gives the same opinion and it's adopted as the official line and all hands on deck. Been a contractor - got lots of change accepted, went permie - suddenly nothing! WTF!
  • OJ
    Ah bonuses. I think my (almost) 11 years of working, I've had one bonus. After tax was taken, it was enough to buy a nice meal for me and my wife. Bonuses are so rare down here, they're hardly worth considering as part of the deal.

    PHP? You poor sod.

    And before anyone else jumps on me: Yes I'm aware that the software that powers this very blog was written in PHP. It doesn't make it any less of an abomination. At least I didn't have to write it!
  • Yeah, my tech is crappy PHP that won't go anywhere. It's a bittersweet jig. They're cutting stuff, the work is boring, but the team is good and the conditions are alright.

    Speaking of not having control, we've just got the announcement that we won't have bonuses this year or in the following ones ;)
  • OJ
    Other than the mind-numbing maintenance, that does sound like a pretty good gig. You haven't mentioned which tech you work with either :)

    You've highlighted another issue with permanent work: changing conditions that you don't have control over. Those kinds of things can easily be dealt with as a contractor, unless they're not in the contract of course ;)
  • I'm a permanent worker, paid by the hour. I'm sometimes considering going for contracts (problem is my region is pretty underdeveloped for technology and I'm probably as far as I can go without moving.)

    I'd have to say my hours are great: 40h/week max, after that it's paid in overtime -- time and a half. I've got flexible schedules, a great boss (ex developer), large sites to work on. I also have health insurance (although I got one from the state), a dental plan, life insurance and a medical expenses account for about $14 off every paycheck. I got the 401k equivalent where my employer adds 50% to what I invest.

    Great conditions overall, except for one thing: mind numbing maintenance, meetings that never end, decisions made by non-technical people, etc. The company is also going down: they used to pay for University, have free snacks and whatnot; they no longer do. They even stopped paying for tissue boxes, which was a small but nice thing to have.

    Still, I think I have pretty good conditions that I would not have were I a contractor. Oh and I never have to deal with customers.
  • OJ
    Basho are exactly the kind of company I would love to work for, even though they are based in the USA.

    Of course, I don't want to relocate to the USA, I would aim to work from here in Australia. That could well count me out, even if my lack of Erlang skills don't ;)

    Thanks for the comment!
  • The contractor vs perm is clear, when you can afford some uncertainty then contracting gives you much more flexibility. Of course also more responsibilities for pension, social security, insurances etc.

    Regarding work, Basho is indeed the company I would try to work for. That is if they wouldn't be in the USA... that makes me reconsider a couple of times before approaching them.
  • OJ
    Great comment mate :) Fab point regarding the interviewing style of perm vs contractor. You're right. I've found the interviews for contract positions substantially less gruelling than those for perm positions. It is a bit odd!

    Couldn't agree more with the points about office politics, the quality of work, the lack of meetings, etc. All wins if you ask me! And yes, I think being the first off a sinking ship is the way to go, especially if the market is going to be flooded.

    I'm sounding like a scratched record, but I agree again with the point regarding the ethos. When you find a company that gives a shit, that tries to do things right, that makes you feel like you're not just a resource that's disposable, it becomes way more than the cash. Unfortunately, such companies are rare.

    Thanks for the comment mate!
  • OJ
    Thanks for the clarification Liam. I had a feeling that there was something different about 401k to super.

    Hours are indeed worse given that there's a minimum but no maximum. I don't mind doing overtime, but the motivation and rewards must be right. They don't have to be financial, they just have to be right.
  • Bryce, that 401K issue does not exist in Australia.

    OJ, hours are worse for permanent employees because the employer does not have to pay overtime. Overtime is free, thus the two parties interests are misaligned.
  • I think you've got it right. There is no such thing as "job security". At least as a contractor you know when your contract runs out. You also know when to start looking for another contract. If you hate the job you can choose not to renew your contract. Funnily enough a company that has a rigorous applicant criteria for permies usually have a straightforward single interview-style criteria for contractors! What gives?

    Permanent employees are lulled into a false sense of security thinking that their jobs are "permanent". In reality their employment is as "fragile" as that of a contractor...maybe more so since they don't get the wages a contractor would or heads up about their contract running out.

    Recently I had the option of working for a company I had a contracted @ for a number of years before. Unfortunately the job was permanent and I didn't even want to apply Why? As a contractor it had been great working there.....I got to work on all the "good" technical stuff while I saw the poor permies dumped with all the day-to-day housekeeping that they didn't want contractors to do. Good for me bad for the permies. Also you get left out of office politics, restructures, unnecessary meetings and general wastes-of-time. All in all being a contractor is great! :) One down side would be that if money is tight, contractors are the first to go. Better to be first off a sinking ship....

    Something else you need to be aware of is that some companies make contractors permies for lower salaries as one last big effort to get some piece of work done before they run out of money. I have seen this happen in other companies. So getting the permy job may not give you the stability you seek.

    I do agree that if you do find a company that is truly exceptional and that have the same ethos that you have, then being a permy seems like the right move...as it's not about money anymore....it's about something bigger.
  • OJ
    Long time no see my friend ;) Thanks for commenting!

    Here in Australia we have superannuation funds. It's mandated that either 9% or 10% of your salary goes into this fund so it's there for your retirement. I'm not sure if this is the same as the 401K thing you're talking about in the US.

    So the thing to point out is that as a contractor you put 10% of your income into your super fund yourself. Even with this 10% taken out, you're still way ahead of standard permanent rates. At least here in Australia, the superannuation thing isn't enough to make me want to go perm.

    I've been permy many times in the past too. I still prefer the contracting game for a few reasons -- variety being one of them!

    I do think that your situation in the US is still slightlyd different to how it is here in Oz. It's a perfectly valid point though!

    Cheers for the feedback mate.
  • To get all biases on the table, I'm a permy. But I've been a contractor before, so I'm aware of the pro's & con's of both sides. Being a contractor is certainly good for the money making aspect. And your time has a direct correlation to the company's pocket book, so they are less likely to ask for overtime. This is a definite plus. Us permy get shafted on this one.

    However, I would like to give an advantage for a permy over a contractor. (At least in the US) there are company matched 401K's. Granted its only up to a (usually single digit) percentage of your annual salary. But in essence, its a (for example) 6% raise towards your retirement. As a contractor you have to save up for your retirement yourself. Not a bad thing, but just a different side of the coin.

    Again, both have their advantages & disadvantages, and depending on the person you are, you should pick the one that works best for you and your position in life.
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