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Going Contracting

Discussion in 'Serious' started by Byron C, 22 Jun 2015.

  1. Byron C

    Byron C And now a word from our sponsor

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    I'm interested to hear experiences from people who have made the move from from permanent roles to contract.

    Background: I'm a SQL & VBA Developer.... of sorts. Actually my job title is senior BI/MI analyst, but I'm one of the few competent SQL & VBA people we've got on the team. This is blowing my own trumpet I know, but compared to my ~30 or so peers there are only a handful who could pull together the same code in the same space of time that I could, and I can't think of anyone who'd use classes and object-oriented approaches in Excel VBA code.

    I f'ing hate this job. On a practical day to day level and on a more philosophical/moral/ethical level. Our department is always asking more from an increasingly fewer number of people and the only way we get anywhere close to what we're asked to do is because an awful lot of people put in an awful lot of time - e.g. replying to emails at 2250 on weekends with their CrackBerrys and regularly working 10-12 hour days. Our approach to technology might as well be stated as "IT'S NEW AND IT'S SCARY AND I DON'T LIKE IT"; we're not a tech company, but let's put it this way: a lot of people would be f'ed if our core platforms fell over. And as I start to mellow and mature a little, I'm finding it harder and harder to morally justify working in financial services.

    Even if I could get over my moral objections, and if the working conditions were better then this would be easier, I have very little option for career progression unless I want to become a manager (that is, "people manager" type manager, not project manager). Suffice it to say that if I wanted to do that then I'd be doing it already. I can manage resource and projects, but I'm not a "personal development, HR, working patterns, sickness/absence/leave, etc" sort of person - tried it, failed miserably, hated every minute of it.

    I earn approximately £134 a day gross, including bonus & benefits (£112, if you exclude those). According to what I've read recently, the average daily rate for a SQL contractor is £370 per day; I've recently seen SQL roles in my area offering £270 and £300 per day. Either way I want to leave "that place" (although preferably I'd like to stick it out for another 6-9 months to get the annual bonus) and those rates are an *extremely* tempting prospect.

    I've been doing some reading and I know it's not an easy road: there are a lot of potential tax implications, IR35 sounds like it could be a nightmare, I'd need a specialist accountant, no work = no pay, etc. What I'm interested to hear is your experiences of contract work, for example:

    • How difficult did you find it to land your first contract? (I've often heard from contractors we've brought in that the first is the hardest)
    • Have you seen much personal benefit around flexibility of working?
    • Do you think it's a viable, stable, long-term prospect?
    • Would you go back to full-time work?
    • Did you build up any cash "reserve" before going contracting, or did you just jump straight in?
    • EDIT: Did you go with an umbrella company first, or did you go straight in and set yourself up as a limited company?

    This isn't meant to be an exhaustive list, this is more of a "starter for 10".
     
  2. saspro

    saspro IT monkey

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    I no particular order but here goes (I'm dual status so it's a bit different for me)

    Getting contracts is hard, you want to have some work scheduled before you even start.

    Flexibility goes out the window, if you don't work then you don't get paid. And the customer is always demanding.

    It's viable if you're good at it & can find time to actively look for work.

    You NEED a cash reserve. 3-6 months of cash minimum (including everything you have to spend).

    No point using an umbrella company at first if you're willing to do your own taxes.
     
  3. Tattysnuc

    Tattysnuc Thinking about which mod to do 1st.

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    I'm not a contractor, but someone who has engaged them in relation to Microsoft BI related work.

    *Contacts are key - get them first BEFORE you consider jumping ship.

    *Make sure you've got examples of work you've done (without compromising any of your current employers data) and some sort of portfolio - as an employer it makes our life easier to build rapport and understand what your technical levels are.

    *Everyone has got lists and lists of stuff on their CV - it's the practical stuff that counts as almost anyone can get a basic microsoft certificate in SQL - putting it into use will differentiate you and get a new hirer on side.

    I can;t iterate how important it is to get a network of contacts out there. Test the water while you're still in work and NOT after leaving - often one piece of work is a doorway to several others, but you've got to get that work first.

    Other than that SASPRO really does sum it up - be prepared for very dark and frustrating times - contractors get paid well but are expected to walk on water and deliver miracles. Contractors with good relationships get repeat work - you'll have to be a very self driven person to make this work long term, but if you do, you can make a great living at it.

    I would also add that a diverse toolset is often advantageous - if you can do 2 or 3 tasks for another employer rather than stick to a single very specialised skill set, then that'll make you a stronger proposition.
    Familiarity with ERPs and their data constructs is often a big hurdle so the more exposure and experience you can demonstrate, the wider you will cast your net....
     
  4. julianmartin

    julianmartin resident cyborg.

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    All good commentary IMO. Just wanted to add something about umbrella companies - **** is really changing for them so it's probably best to steer clear for the time being, it's about to get very complex and no doubt lots of people will get hurt by being in the wrong place at the wrong time.

    But yeah:

    1. Cash reserve is key
    2. Test the water before you quit
    3. You'll probably have to take a hit to start with to get some experience, I'd imagine it'll be at your current day rate or so.
    4. Contracting does add more flexibility to those who can be responsible and disciplined with their work. I don't think it suits people who struggle to keep control of finances and timekeeping etc.
    5. Be prepared to work autonomously and figure stuff out on your own - contractors are rarely handheld or walked through what's needed.
    6. A decent accountant will be very useful but get a plan from them before you commit. IR35 is a bugger, multiple co-existing contracts with different clients is the easiest solution but hard to maintain. Don't be tempted to get too involved in office culture - that's a big red flag for HMRC. They will look at social media and so on. The most effective contractors I meet really separate work from personal, almost militantly.
     
  5. RTT

    RTT #parp

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    This. I have no time to walk you almost anything at all given your day-rate premium; figure stuff out and get **** done or you're outta here faster than you arrived ;)
     
  6. Byron C

    Byron C And now a word from our sponsor

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    Thanks for the replies so far; there's no real substitute for advice/information from people who have first hand experience.

    I'll admit the really big draw - aside from getting away from my current employer - really is the money; however I'm all too aware of the risk and challenges involved in becoming a contractor.

    To be quite frank if you asked me what my long-term aspirations are then I haven't a clue. About a year ago I started wondering what it is I really want to do: if I could get paid for doing something that would make me look forward to going to work each morning then what would that be. Figure that out and then work towards it.

    I still don't have an answer, and I don't think I'm any closer to finding one. Maybe I just need to get away from where I am, I've worked for this lot for nearly 12 years now.

    Happy for anyone else to chime in with any more of their experience(s).
     
  7. julianmartin

    julianmartin resident cyborg.

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    I mean to emphasise RTT's point, contractors get paid so much more generally because they are so good. Yes you get the duds, but generally the ones who absolutely kill it are worth their weight in gold. I wouldn't be tempted by this unless you know you're close to the top, you'll have a rough time of it otherwise.

    saspro is a pretty good example - he's evidently contracting as he said, but having watched his commentary on BT over the years, it's pretty clear he's light years ahead of most people in his sector. I tend to find the same with most that I come across. The ones who aren't are on a blag and tend to be unreliable. Speaking of reliability, that is another very, very important one.
     
  8. Byron C

    Byron C And now a word from our sponsor

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    I've never worked with any SQL contractors before, but I have worked with a fair few change management contractors (project managers, business analysts, etc) and yeah: they command a high day rate because they're very damn good at what they do.

    We had a contractor/consultant in a few years ago who was a European expert in one of the enterprise platforms we're using, and he really was worth his weight in gold. A project asked for a pretty tricky/awkward piece of functionality and our IT people (who are also contractors...) wanted at least three months and an awful lot of funding to even tell us whether it was possible or not. This guy knocked up a prototype in about half an hour that did exactly what the users needed, and that's why we paid him a four figure daily rate.
     
  9. Ljs

    Ljs Well-Known Member

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    Try and find an agency (preferably a few) who deal with freelancers and work hard to get in good with them. So much easier than doing all the legwork yourself and you'll nearly always have an income.
     
  10. Scroome

    Scroome Well-Known Member

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    This.

    If you get in good with contracting, you'll find that your stock soon increases.

    Pay scales rise much faster for us, than Perm workers.

    They can also fall too, depending on market need.
     
  11. GMC

    GMC Well-Known Member

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    If you go agency, be more wary of ir35.
    HMRC introduced new reporting requirements in April and my guess, it is to identify the low hanging fruit for the ir35 team. (There arent that many of them)
    I'm in a different field from you but all the advice stands as a consultant/contractor.

    One thing I would add is that you should work out your operating costs upfront and know how many days you need to work and at what rate to keep yourself comfortable, knowing how you will get money out of the business.

    The day rate you charge won't go in your pocket (take 20% off right away for corporation tax.)
    Work out your operating costs for accountant, accounting software, payroll, professional insurances, company formation, bank account fees, website and hosting, business cards, email, laptop, software, contract reviews, (obviously delete if you can do yourself but remember if you're doing it, you're not getting paid or having time off) and make sure that you can survive no less than 3 months (if you have an immediate client, more if not) of this cost base, plus travel and hotel type expenses before you need real money out of the business - to cover late payments and building enough profit to take a legal dividend.
    Put all this together in a plan, define why the customer would pick you instead of the competition, and what your customers and perfect contract should look like. See how achievable you think it all is.

    Finally; do you interview well? It's a critical skill for a contractor. The customer has to trust you quickly.

    If you can hit all that, then go for it. Over a year in for me and the best decision I ever made. I would say that the premium is partly quality, but it's also because your income could disappear tomorrow. Notice periods are for employees or the person paying the invoice, not for the independent.
    If you do decide to take the plunge, drop me a pm and I'm happy to offer some practical advice on setting up.
     
  12. Landy_Ed

    Landy_Ed Combat Novice

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    I agree with this, but not it being a "Finally" part. If you interview like a statue, you're stuffed no matter how good a sql dev you are.

    While it *should* be the case that sql contractors are gurus, it is not always the case. I've seen many who interviewed well enough to get past people who don't know SQL dev that well.

    Different roles require subtly different skillsets, it's not always enough to know your full outer join from your cross join. It's difficult as a sql dev to not get bracketed with the DBA team by employers who have prodops separate to devops, and DBA responsibilities are quite different. If you're a BI guy, don't try to sell yourself to an OLTP sql dev role, you may be surprised just how different these jobs are. Going in the other direction is equally trap-laden. PRODOPS dbas have an extremely difficult job, assuming they are doing it right.

    I went contracting, and am no longer a contractor as I was given enough incentive to go back perm. Parked my company for a few years then decided to dissolve it - that's a whole battle in itself.
    Top Tip s- don't spend a single penny that is not yours, and keep a good 30% reserve of what you think actually *is* yours.

    Treat every day onsite as if it is your last, and treat your work as if it's something you will inherit in 2 years time with no supporting info (remarks and verbose naming conventions are your friends here of course)

    I am often asked why I don't go back contracting, as £500 a day would be easily achievable in London, and even outside it £350 is the norm for a good sql dev. But I hit a serious medical issue recently that makes me rather grateful for the healthcare trust fund my employer operates. All those insurances and staff benefits, they need to be part of your equation.
     
  13. Byron C

    Byron C And now a word from our sponsor

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    Thanks all, I appreciate people taking the time to reply. Financing is probably the biggest concern; I knew there would be a lot of costs involved, but clearly there's an awful lot I haven't factored it. My immediate priority is to pay down some debt, and we're doing quite well with that at the moment.

    I think perhaps it might be good to get some experience in other companies, as I'm very much aware that I am quite blinkered at the moment. Good practice is good practice, but I'm very used to how things work at my current employer.

    Cheers for the offer, I may well take you up on it if that's the road I decide to go down.

    Your first paragraph is very much a key consideration. I am most definitely not a DBA or an OLTP dev: I wouldn't have the first frakking clue how to build a responsive data model to support a high volume system such as an online store, but given adequate context/background I could knock up a data mart and start cranking reports/analysis out of it in relatively short order.

    Benefits, pension, bonus, etc, are most definitely things I'm accounting for. All those extras add around ~6k to my salary on their own. That's part of the reason I'm willing to wait: if I stick it out until the early part of next year then I'll be eligible for an annual bonus.
     
  14. GMC

    GMC Well-Known Member

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    Remember that the actual costs of salary, pensions etc independently, are not the same as the net or gross rates you see as an employee. e.g. if you pay salary above the threshold, you have to make employer NI contributions on top of gross pay.
    To make an effective comparison you'll need to work out how you'll pay yourself and how best to replicate your current benefits on a tax efficient basis.
     
  15. littlepuppi

    littlepuppi Currently playing MWO and loving it

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    I was shocked at how easy it is to contract.. I recently left my perm role and within 48 hours had 3 offers, not all were contract, of which I am now working on one of them... Very easy to do and tbh fell like I was very well trained by my previous company and should have made the move some time ago.

    The situation you are describing, if you cut away the fat is basically one of confidence. Have faith in yourself and make the leap, you are worrying about nothing but bureaucracy.. If you can do a job that the market is looking for the rest is simple.
     
  16. julianmartin

    julianmartin resident cyborg.

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    Yeah I agree with this to be honest - the mechanism of having the LTD company in the background and stuff really isn't that complicated. If that's a roadblock, don't do it, you'll find way harder stuff in the role itself to deal with.
     
  17. isaac12345

    isaac12345 New Member

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    Why dont you ask a few successful contractors here for an assignment or two to test out whether you are good enough or not? I am sure they would be willing to offer you blunt and honest opinions.

    Also, I think you sound like you would be better off simply switching companies(that too a different sector) rather than going contracting. It sounds like what you need is a change of environment and work that jives with your moral concerns about working for financial services rather than more pay. Are you willing to move out into another city in the UK, or outside of the UK?
     

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