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I have seemed to be screwed over with contract work, vs less so as being a Permanent employee. I also noticed a similar experience with my colleagues. We had a Sr lead work with us for 3-4 years and left to take a "Contract to hire" job. After the contract was over, the project was canceled and everyone on that team was left without a job. Another Sr Software Engineer was working with us for 10 years and left for a contract job. They didn't convert him to full time due to "wrong culture fit", and didn't renew his contract either, and let him go too. Seems to be alot of risk there, but I've heard that others really like temping, so wondering what the consensus on city data was.
In my industry contract work pays more, but the tradeoff is you could be out of a job at the end of every contract.
I know some people who are social, they have strong networks, and are more than OK finding the next job, so they love the money. If you don't have the stomach for the risk, or if you're not the best at networking to find the next job, contract work might not be the best way to go.
The problem I have with contracting is the staffing agency. They essentially pocket half your earnings but really dont offer any benefit other than the placement. Seems like if your going to contract, its smart to go 1099.
Contracts have no benefits. They are short term. And you got to continually look for new jobs. Unemployment checks are your paid vacation. Employers see your resume and think you're a job hopper so no perm job for you, even if you want one.
And the rates are not usually higher than if one was a perm employment.
Contracts definitely pay more for $$ than employee roles... by quite a margin (nearly double), but you're on the hook for covering yourself for (additional taxes, healthcare, vacation time, retirement, etc.).
You get breaks inbetween contracts.. but that means that you need to budget well as well as look for new contracts.
The problem I have with contracting is the staffing agency. They essentially pocket half your earnings but really dont offer any benefit other than the placement. Seems like if your going to contract, its smart to go 1099.
No, it isn't. Because you are just creating a bunch of accounting work for yourself, and you have to invoice them and wait 30-60-90 days to get paid. Also, if you are unemployed, you can't collect unemployment benefits. You also have to take care of your own health plan. Also, you would need to carry insurances that are expensive just for you, that a staffing firm already does. Plus you'd have to meet the criteria to be put on the approved vendor list which isn't an easy thing.
I wouldn't worry so much about how much the staffing firm makes, and just be concerned with how much you make. They need to make money to pay their staff and overhead.
It depends very much on how the contract work is done. In my field there are a ton of small business that do contract work. Most start out as one or two person businesses and then grow by hiring providing more employees to do the actual work itself. In this case I'm talking about contracts as bodies who are doing the exact same work as permanent employees and work full time on the premises just like a permanent employee and supervised by the same supervisor as the permanent employee.
The contract employees get paid more and better benefits than permanent employees. Their risk of course is whether the contract lasts. While some of them have been here 10-15 years, there is a growing sentiment that the supposed benefits of outsourcing aren't there, and costs to outsource are much higher than hiring permanent employees so this may change in a couple of years.
Contract jobs in my profession typically pay a lot less than perm positions, have no or substandard benefits, and don't typically lead to permanent employment. They also tend to be with low quality employers that don't value their workers. In short employment of last resort.
I actually prefer contract work vs. FTE. I prefer long-term (1 year+) contracts on a W2 basis. My last two contracts have averaged 2 years. I'm typically not looking to join a firm on permanent basis after a contract ends. And I look forward to taking a couple of months off in between contracts. My skills are in demand. So getting the highest rate has not been an issue. In my field contract work has had higher pay.
I supplement my income in between contracts with savings that I specifically set aside for this reason and unemployment compensation compliments it. I replenish this pot of money when I start a new contract. Contract firms I've worked for have always offered a standard benefits package, including 401k (no matching though).
Contract work typically gets a bad rap. But, I haven't lost anything by doing it. The diversity of the companies and projects I've joined increased my value proposition. And most importantly I'm able to maintain a healthy degree of separation from some of the corporate politics. I value my down time in between contracts. And I'm always networking to find that next one. I'm an IT PM and there's always a ton of project-related work.
The main reason for contract work is freedom and ability to add value to yourself without depending on your employer. I often take training or leisurely read or watch videos then go talk to other pros to get some ideas to add some new skills. Whenever I'm in between projects, which can sometimes be from 2-10 weeks. If you get unemployment then you got a nice vacation until the next gig. I've had 3 months off one year during the summer and it was great. I went to several interviews and chose the best project and continued working for 18 months straight then I got another 5 months break afterwards. Still made more money than a lot of FT workers. Just make sure you pay into your own 401k.
Full-time employees typically are either too busy with their work or too pre-occuppied with their personal life they don't get to enhance their skills.
There are many FT job that pays $80-120k a year but the hours can be 35-60 hrs a week depending on what the projects are. If you're consulting you're most likely putting in only 35-45 hours and making about 20% more per hour than the FT workers. But you get paid every hour that you've worked.
The only major negative is health insurance costs a lot if you have a family. That's why I never give any discounts to clients.
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