more crackdowns on contractors expected

[bloodiedathame]

It's all to do with flexibility for a business. Contractors can be dropped without much warning, but trying to get rid of a permanent member of staff is much more difficult (or so I'm led to believe). That's a risk you live with as a contractor, which is why the financial benefits of being a contractor are good.

 

[Stretch]

Yes it's not correct people billing only one company and working full time for them.

I'm on my own freelancing but I'm billing four or five clients a month.

And that's better because?

 

[Greebo]

It's all to do with flexibility for a business. Contractors can be dropped without much warning, but trying to get rid of a permanent member of staff is much more difficult (or so I'm led to believe). That's a risk you live with as a contractor, which is why the financial benefits of being a contractor are good.

Not really. Any employee can be got rid off in the first two years without reason. Only becomes messy if there were grounds for race, sex or disability discrimination which are the only things you can be taken to a tribunal for (which i do think will make employers think twice about employing ethnic minorities, women and disabled people on short term) and no redundancy is due either.

So really for any period under 2 years its just as easy to get rid of either. The contractor doesn't get sickness, pension or holiday pay though which should be the only major thing the contractor gets compensated for. However, it seems the majority of contractors in my experience get paid far in excess of this plus gain from lower overall taxation.

Yes it's not correct people billing only one company and working full time for them.

I'm on my own freelancing but I'm billing four or five clients a month.

If it's the same 4/5 clients then perhaps you should be all all their payroll and a tax code with the main one and BR with the other 4????

 

[jonneymendoza]

Not really. Any employee can be got rid off in the first two years without reason. Only becomes messy if there were grounds for race, sex or disability discrimination which are the only things you can be taken to a tribunal for (which i do think will make employers think twice about employing ethnic minorities, women and disabled people on short term) and no redundancy is due either.

So really for any period under 2 years its just as easy to get rid of either. The contractor doesn't get sickness, pension or holiday pay though which should be the only major thing the contractor gets compensated for. However, it seems the majority of contractors in my experience get paid far in excess of this plus gain from lower overall taxation.

yes but they get better notice period then a contractor.

 

[anything I don't mind]

I never understood the differences in pay. Companies seem perfectly fine paying £800 per day to a contractor but then pay 1/4 that for their permanent employees doing the same work.

 

[Greebo]

yes but they get better notice period then a contractor.

Really? Whats the typical notice period for a contractor? And if things do change like this then easier enough on short term employee contracts to have a short notice period though in general, in my industry (construction) is a week for the worker employees and a month for management.

In fact we have some contractors on longer notice periods than out permanent workforce.

 

[dr_volki]

Really? Whats the typical notice period for a contractor? And if things do change like this then easier enough on short term employee contracts to have a short notice period though in general, in my industry (construction) is a week for the worker employees and a month for management.

In fact we have some contractors on longer notice periods than out permanent workforce.

1week for me and for all contractors here. (UK/EU government research facility)
employees 3months+

 

[Greebo]

I never understood the differences in pay. Companies seem perfectly fine paying £800 per day to a contractor but then pay 1/4 that for their permanent employees doing the same work.

Same here. I have always seen the need for the use of contractors in the various companies I have worked in but its always puzzled me why the rates are so high. When I have asked, I've always been told that's the market rate for somebody with those skills. Which is may be but all that says to me is that all these employers underpay their own permanent staff with the same skills.

Gone are the old days when it could be argued that people had jobs for life so that made a difference between the certainty of a 40 year job and you might have periods of no work as a contractor. Nowadays people move from "permanent" jobs to "permanent" jobs on a regular basis.

I'm sat here reading through cvs as we speak and not one candidate out of 15 people has had less than 5 jobs in 10 years.............

Basically it looks highly likely that whichever candidate we employ we can only expect them to be with us for two years before moving onwards to another company.

 

[Greebo]

1week for me and for all contractors here. (UK/EU government research facility)
employees 3months+

That's your employer being generous to permanent staff. And it could be easily rectified that short term employees have a one week notice period and leave long term employees on 3 months anyway.

Would help justify the additional pay to the short term employee compared to the permanent people doing the same job.

 

[dr_volki]

snip

I'm sat here reading through cvs as we speak and not one candidate out of 15 people has had less than 5 jobs in 10 years.............

happily take a perm role with you then
been contracting for the same company over 5years

 

[anything I don't mind]

Until that massive differences in pay changes, people will always go in to contracting, the small amount of tax benefits, if any, is relatively insignificant when the pay is 2-4 times greater for doing the same work with the only real down side is no benefits and holidays.

I know of a guy doing 1st/2nd line legal support earning upwards of 60k contracting. same job would be £30k at most with perm position.

 

[Caged]

I'm sat here reading through cvs as we speak and not one candidate out of 15 people has had less than 5 jobs in 10 years.............

Basically it looks highly likely that whichever candidate we employ we can only expect them to be with us for two years before moving onwards to another company.

That's life now in IT work. When the average company sees no need to put staff through training and doesn't see fit to give a raise/promotion to people who up skill on their own time and out of their own pocket then changing jobs is the only way to advance. I'd be more wary of someone who had kept the same position for 5+ years than someone who can show clear progression with a string of two-year roles.

 

[alx]

Not really. Any employee can be got rid off in the first two years without reason. Only becomes messy if there were grounds for race, sex or disability discrimination which are the only things you can be taken to a tribunal for (which i do think will make employers think twice about employing ethnic minorities, women and disabled people on short term) and no redundancy is due either.

So really for any period under 2 years its just as easy to get rid of either. The contractor doesn't get sickness, pension or holiday pay though which should be the only major thing the contractor gets compensated for. However, it seems the majority of contractors in my experience get paid far in excess of this plus gain from lower overall taxation.

I guess it depends on the industry, but where I work my notice period is 3 months and as a consequence my redundancy notice is also 3 months (this is common for the majority of staff).

In instances like this it's not particularly cheap to get rid of staff on a whim even if they have been working at the company for less than 2 years.

But I agree that the day rates for contractors do seem disproportionately high vs staff salaries everything being considered, but it's hard to put a price on effectively having no notice period. I guess it's just market forces at work, supply and demand etc.

One thing I would say is that if a company has good benefits (health care, share schemes, bonuses, car allowance etc) it's not difficult for the actual cost of an employee to the company to be 1.5x or more of their base salary.

 

[Bear]

But the issue is that if adjusting for pensions and holidays that the contractor doesnt get any more net pay than the permie then it would be the same.

What you are clearly saying is that with the extra wages and the generous tax situation you end up getting paid much more than a permie. But why should you?

Basically I can see rates of pay for temporary staff on the books will have to increase. Contractors will still lose out though as they will lose all their tax breaks.

I'm not arguing for the generous tax situation, I'm saying due to the enhanced pay, contracting allows people that wouldn't normally consider a position to take it, thus increasing flexibility to the work force

 

[alx]

Same here. I have always seen the need for the use of contractors in the various companies I have worked in but its always puzzled me why the rates are so high. When I have asked, I've always been told that's the market rate for somebody with those skills. Which is may be but all that says to me is that all these employers underpay their own permanent staff with the same skills.

Gone are the old days when it could be argued that people had jobs for life so that made a difference between the certainty of a 40 year job and you might have periods of no work as a contractor. Nowadays people move from "permanent" jobs to "permanent" jobs on a regular basis.

I'm sat here reading through cvs as we speak and not one candidate out of 15 people has had less than 5 jobs in 10 years.............

Basically it looks highly likely that whichever candidate we employ we can only expect them to be with us for two years before moving onwards to another company.

Just playing Devil's Advocate here, and I do see your view point, but companies often don't give very good pay rises unless you move into a more senior role so it's not surprising people move around to get better compensated for what they do. Obviously companies can't give out massive pay rise all the time but at the end of the day people work to live so I wouldn't blame them for playing the game.

 

[Greebo]

Just playing Devil's Advocate here, and I do see your view point, but companies often don't give very good pay rises unless you move into a more senior role so it's not surprising people move around to get better compensated for what they do. Obviously companies can't give out massive pay rise all the time but at the end of the day people work to live so I wouldn't blame them for playing the game.

Oh don;t get me wrong I'm not knocking it. Some of the people have moved jobs due to their choices, others have been laid/off made redundant/ company has gone bust.

Its the nature of the job market nowadays and pretty much standard hence my comment about all 15 are the same.

But gone are cv's like mine for my generation when my first job was 13 years and my second one was 11 years before coming to this one where I have been for two years so far and I expect it to be my last job before I retire.

Suppose im saying that for the vast majority of the employed workforce they are "temporary" and move jobs as often as contractors do anyway.

 

[Gilly]

But gone are cv's like mine for my generation when my first job was 13 years and my second one was 11 years before coming to this one where I have been for two years so far and I expect it to be my last job before I retire.

You change jobs more often than you change your underpants! I've been with the one company for 17 years

I have, on average, moved roles every 2 years internally mind.

 

[Greebo]

You change jobs more often than you change your underpants! I've been with the one company for 17 years

I have, on average, moved roles every 2 years internally mind.

Hee hee. And yeah I changed roles within the companies regularly. I know, only 13 years in one job, Im such a fly by night kind of guy

 

[Tunney]

The problem with staff retention in tech is that there's skill shortages in a lot of areas (due to a genuine need or a desire to follow the latest fad, e.g. DevOps). The market rates for roles often balloon far faster than any realistic pay raise. If you can earn 25%+ more elsewhere, you're going to leave.

 

[alx]

Oh don;t get me wrong I'm not knocking it. Some of the people have moved jobs due to their choices, others have been laid/off made redundant/ company has gone bust.

Its the nature of the job market nowadays and pretty much standard hence my comment about all 15 are the same.

But gone are cv's like mine for my generation when my first job was 13 years and my second one was 11 years before coming to this one where I have been for two years so far and I expect it to be my last job before I retire.

Suppose im saying that for the vast majority of the employed workforce they are "temporary" and move jobs as often as contractors do anyway.

Agreed, people move around a lot more these days then they used to.