Employee vs Private Contractor
It's a choice only you can make. Typically, employees and contractors perform the same job - same skills. Neither is a lifetime commitment, in fact one path may lead to the other. But you are selecting a lot more than a mere method of remuneration. Signing on as an employee brings the secure paycheck, social camaraderie, and mind-freeing benefits such as healthcare coverage. It also involves a certain grinding routine. The private contractor boasts the entrepreneurial thrill (and paperwork), freedom, and often more varied work environs.
One thing is sure. However similar the work, the Contractor and employee lead very different work lives. So consider the many points, and make sure youre stepping into the right role.
* The Price of Freedom. For almost all private contractor contributors freedom was at the top of their benefits list. I have the power to stop working and go on a vacation (although vacation means no pay), Christian noted. While Sharon echoed his sentiments with the freedom of working as a contractor and wearing several hats far outweighs the limitations of corporate life.
There is no doubt that the salaried emplpoyee, in addition to being held to a defined set of hours, can be required to take on an ever-changing set of duties. The contractor, conversely, can make very clear at the outset what she will and will not do.
But such freedom comes at a price - in both time and money. Financially, contractors more often tend to end up with a lower overall remuneration. While there is a general market price, most companies are not babes in the woods. They have fixed priced for people working as (wink, wink) private contractors. In most cases, they will swoop you up as a contractor to avoid paying you well deserved benefits. And odds are, the job candidate will not adequately price his benefits into his remuneration request. So before going in, figure our which benefits are deal breakers and which are merely nice perks. Then figure the cost of the deal breakers into your salary demands.
Personal Time is another asset which the contractor sacrifices in ample amounts. Simply put, as a contractor, you are a CEO and must run a company. As one contributor noted the biggest difference for me is that as a contractor, you are signing up to also be a salesperson and a business operations manager in addition whatever might be your marketable skill. Your spouse may help with the paperwork and even design those cunning little business cards. But it will be you out there hustling sales. Can you do that? Do you want to?
Industry to Industry. While many fields see contract labor as a method of cost cutting, others have long held contract work as a way of luring in high end talent. Generally, those fields which have traditionally hired outside contractors - like advertising, design work, writing, construction - do so, as you say, because they are in a time crunch or require top level expertise. Thus traveling farm laborers know where to be when the harvest is high and they can make $20 per hour. Salaried people in such fields are continually looking to step out on their own, handle the entrepreneurial hastle, and make the substantially bigger bucks.
If your skills, however, lie in one of those where the contract work is relatively new, take a little care. Industries like technology, research, pharmaceuticals, etc., for the most part see the average employee as "overhead," meaning they are employees who do not directly bring investors/clients--another words, "the money" to the firm, company, or agency. Therefore, "overhead" is considered expendable and interchangeable.
Of course, trends and traditions are not iron clad. Whether you are considering either a salaried or contracting position, carefully Inspect the companies you want to work for. Rememember, as a contractor you may need to take on a series of clients simultaneously. As Alberto Molina notes, often, there is not enough work to support a full time job in ones field of expertise. Designers, for example, may find that no one client can support them, so they have to find multiple clients.
* Preping and Pitching. While the numbers of contractors and breadth of fields accepting them have grown exponentially in the last decade, not every company welcomes both options. If you sense things spiraling downhill in th middle of your interview for a salaried, you can always switch plans and inquire about some sort of limited contract work. The reverse is also possible, but far less likely to land.
If you are pitching yourself as a private contractor to an existing firm, you may have to convince them that bringing you aboard complies with the Fair Labor Standards Act updates. This may entail showing them that you have other potential clients and the trappings of a business, e.g. address, business cards, etc.
Before you pitch yourself, do some homework. Sit down with (dont just browse or phone) a consultant in your field, and find out:
a) what the accepted fees are - are rates typically flat fee or hourly?
b) what are some of the advantages contractors offer over employees?
c) how do they handle the necessary benefits which the employer does not supply?
d) are there any special negotiating points to tip the scales in your favor?
Finally, beware of over-flexability. In offering an employer special services than employee cannot, be careful not to contort yourself into a bind.
Cash-strapped startups will almost invariably seek your services as a private contractor. Few have the enough funds to pay out a regular salary from the start, let alone spring for office space, work tools, healthcare and other expenses of keeping a person on site. Again, you want to plan your pitch, and convince this entrepreneur of:
a) the specific revenue enhancements that go with having you on the job all week long. (Show him the figures.)
b) the dollar value of loyalty. How you can bring in more business if your efforts are focused on his product alone, not on seeking the next consulting client.
BB
