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1. Cheaper
2. Contracting company skims overhead and some profit
3. The employee is paid an amount understood to be less than full time employees, given #1 and #2, which may consist of only pay, or pay + benefits, that cannot possibly be as good or better than FTE
So in a nutshell, contractors sitting in roles alongside FTE doing the same job will either enjoy less pay, less benefits, or both. Not hard to figure out.
Since the dot com crash, tech roles tend to be C2H - but the H part rarely comes. Contracting is the only way to make ends meet in many tech roles (except developers)
That's right. Contracting and gigs are the way to go. That kind of work will be expanding steadily as it offers employers clear advantages. As for workers, no, only disadvantages.
That's why I'm very hesitant to jump now, even though I'm not exactly happy. I'm full-time with decent to above average benefits. I'm top 10% locally.
I want to move to a Raleigh, etc., but I'd want at least a 20% raise in an FTE position. That can be tough to dig up.
... and nearly all the US is at-will, meaning it's no harder to fire a permanent employee than a contract one.
That's true at small firms and many mid-size firms, but not true at Fortune 500-ish companies (after a probationary period - typically 6 months or 1 year).
At large corporations, HR departments have policies and procedures that must be followed to terminate someone, and failure to follow those procedures is grounds for the terminated employee to sue the corporation for failing to follow its own rules.
Those internal rules -- typically not required by law, mind you, but required by the corporation -- usually include a lengthy process of documenting specific employee behaviours and shortcomings and the business impact thereof. It typically includes multiple steps of progressive discipline ultimately resulting in a PIP -- "Performance Improvement Plan." That PIP is just more arduous documentation. The PIP will list key objectives and measurable deliverables ranging from strategic to things that are assumed to be part of the work environment and don't need to be written down (e.g., dress appropriately, begin work at 8:00, etc). The manager spends a ton of time documenting everything from the time the employee arrives at her desk to specific job performance metrics.
By then it is a game of "gotcha."
Every manager who has terminated an employee one time learns it is a ton of work, and for the most part just isn't worth the effort. After all, the manager isn't going to get brownie points for having spent so much of her time dealing with the problem employee, thereby missing her own strategic objectives. The end result: the manager learns it is far easier to encourage the poor employee to transfer elsewhere in the company so they can "get a fresh start" in a position that might be a "better fit" and allow the employee a "chance to succeed." Even the complete and total losers who have fatal flaws.
As with all things, there are specific exceptions - such as IP theft, bringing a firearm into the office, etc for which an employee can be immediately be fired - but even then the manager cannot do it, only HR can.
Corporations put these internal rules in place to prevent rogue managers from capricious actions that can bite the corporation in the rear end through wrongful termination litigation.
Of course, you know all this; you've just strategically ignored it.
Of course, you know all this; you've just strategically ignored it.
And you know that contract employees, no matter how long their tenure, have nowhere near the job stability of permanent hires. Which was the point you ignored.
And you know that contract employees, no matter how long their tenure, have nowhere near the job stability of permanent hires. Which was the point you ignored.
That used to be the big deal with FTE but from my long term view of employment. I rather be a consultant than FTE because there's no such thing as job security anymore. When a company goes through changes they get rid of productive workers without knowledge.
I rather have working knowledge or more value as a SME than a FTE that just shows up and not perform any work other than email and attend meetings. If you look at 80% of office workers including IT at large corps. Majority of them just email and attend meetings. Their goal is to pushback work to other depts and forces management to outsource or bring in consultants to fill the gap.
Our government relies on consultants heavily to get things done. Too many lifers just do nothing but show up and attend meetings only when asked and disappear and wait for that pension. Job security only exists at government jobs.
That used to be the big deal with FTE but from my long term view of employment. I rather be a consultant than FTE because there's no such thing as job security anymore.
The reasons company hire contract employees are entirely for their benefit. No matter how equivalent contract/FT-at-will employment may be from the work chair, they are substantially different to the company and contract adds not a shred of benefit for the employee. It's just a sophisticated version of how factories used to pick the day's workers from the crowd at the gate.
I suspect that all the problems of age discrimination are multiplied for "contract" workers as well. Maybe not in those fields where twenty years of niche experience is required, but almost certainly for any slot with broader qualifications.
People who prefer to be contractors do it for good pay, the variety, and the fast pace. And if you want to take a couple of weeks or months off without pay you can delay the start of your next contract. My experience was that most contractors preferred it to working directly for a company. The company is paying a premium for contractors so they generally treat them well. You are a professional, not just another employee dependent on a company for your livlihood.
Oddly enough, my own observations have often been that companies treat contractors better and more respectfully than their own employees. They know that contractors are more used to moving around and know what kind of environment to walk away from.
Oddly enough, my own observations have often been that companies treat contractors better and more respectfully than their own employees. They know that contractors are more used to moving around and know what kind of environment to walk away from.
I would tend to disagree, but it depends on what level of contractor you are referring to. For some high end developers or sys admins or network engineers that may be true and pay is probably just as good if not better than FTE employment for those folks.
But at the lower end with help desk and desktop support staff, the pay is quite a bit lower than the same position as an FTE in a given organization, and they are not treated well as contractors- they are considered disposable. It is why anywhere I have worked in those roles, the contract techs are working hard to angle themselves in for an FTE conversion- to get the better pay, benefits, and more security/stability.
That's true at small firms and many mid-size firms, but not true at Fortune 500-ish companies (after a probationary period - typically 6 months or 1 year).
At large corporations, HR departments have policies and procedures that must be followed to terminate someone, and failure to follow those procedures is grounds for the terminated employee to sue the corporation for failing to follow its own rules.
Those internal rules -- typically not required by law, mind you, but required by the corporation -- usually include a lengthy process of documenting specific employee behaviours and shortcomings and the business impact thereof. It typically includes multiple steps of progressive discipline ultimately resulting in a PIP -- "Performance Improvement Plan." That PIP is just more arduous documentation. The PIP will list key objectives and measurable deliverables ranging from strategic to things that are assumed to be part of the work environment and don't need to be written down (e.g., dress appropriately, begin work at 8:00, etc). The manager spends a ton of time documenting everything from the time the employee arrives at her desk to specific job performance metrics.
By then it is a game of "gotcha."
Every manager who has terminated an employee one time learns it is a ton of work, and for the most part just isn't worth the effort. After all, the manager isn't going to get brownie points for having spent so much of her time dealing with the problem employee, thereby missing her own strategic objectives. The end result: the manager learns it is far easier to encourage the poor employee to transfer elsewhere in the company so they can "get a fresh start" in a position that might be a "better fit" and allow the employee a "chance to succeed." Even the complete and total losers who have fatal flaws.
As with all things, there are specific exceptions - such as IP theft, bringing a firearm into the office, etc for which an employee can be immediately be fired - but even then the manager cannot do it, only HR can.
Corporations put these internal rules in place to prevent rogue managers from capricious actions that can bite the corporation in the rear end through wrongful termination litigation.
Of course, you know all this; you've just strategically ignored it.
This is kind of why I am hesitant despite low job satisfaction at the moment to leave my F500 for a non-F500. I know that in general arbitrary termination is not going to happen without extensive documentation. But it still doesn't make my role immune to a layoff due to revenue loss (a result of poor business decisions at the management level). So my role is still not 100% safe.
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