Permanent or contract job

[asal]

Hi,If a candiate gets two offers at the same time:

1.Permanent job with 40k per annum in London
2.Six months contract job with 200gbp perday in london.

Which one would be the first choice to choose.Please advise.

thanks.

[bash]

According to me permanent is the best bet,
but still wait for the seniors to help u out...
all the best

[kenfrapin]

1.Permanent job with 40k per annum in London
2.Six months contract job with 200gbp perday in london.

Firstly both offers are really underpar for London standards. As I dont have info on your experience I am not sure how true it is in your case. Anyway, lets work the numbers

Six months at £200 per day comes to approx £26400 and nothing to look for after the contract's over. This actually translates to £52800 for the year but you need to either get an extension or ensure you continue working for another 6 months.

If the contract paid £400 to £600 a day I may have advised to take it up but its clearly a no brainer. Also note that contracting dramatically reduces your chances of permanent employment, its a killer. Employers dont prefer recruiting contractors as they know you will vanish at the next big contract that comes along. Plus contracting has no benefits like insurance, pension, discounts or paid leave. For the £40k job you work only 11 of 12 months whereas for £26k you have to work all 6 months. If you take a break for a month and contract again at £200 per day you end up getting a similar salary as a perm one.

So best to go for the permanent role in your case. £40k with decent benefits and yearly bonus/performance raise is above average for London but £200 a day contracting is very low

KP

[O_Relly]

Also note that contracting dramatically reduces your chances of permanent employment, its a killer. Employers dont prefer recruiting contractors as they know you will vanish at the next big contract that comes along.

Is this true ? I thought big consultancies like Accenture, Cognizant, do exactly that, ie., have employees in their permanent role but they are constantly consulting for clients ?

This is similar to what a contractor does right ? He is registered with his parent company or umbrella company and works for a client ?

So is it really difficult for a contractor to join a permanent job with companies like Accenture / Cognizant etc ?

[mulderpf]

O_Relly, I don't think Kenfrapin was talking about specific companies. I have had a few employment agents tell me about companies who will not even look at you if you have ANY contracting work on your CV. They actually have screening questions where they ask "have you ever worked in a contracting role?". They will not even consider you.

This was not Accenture, but then again, I wouldn't touch Accenture with a barge pole. I know just too many people who absolutely HATED that company.

[kenfrapin]

This is similar to what a contractor does right ? He is registered with his parent company or umbrella company and works for a client ?

The common mistake made is confusing contracting with consulting. What recruiters and the general market term as contracting is when you work on your own, as an individual company offering your services and responsible for your own well being.
Contractors using umbrella companies are the same except having the umbrella to help with tax calculations.

When it comes to Consulting as an Industry, candidates with good experience in Consulting do tend to get many offers in industry. The term 'working in Industry' refers to working outside of Consulting. So if one works for companies like Deloitte, Accenture, IBM etc you are working full time employed by well known brands, providing consulting expertise to 'their' clients delivering end to end solutions and at the same time working full time for 'a' company with a guaranteed career plan/growth etc rather than on your own changing jobs every 3/6 months. Umbrella companies are not held in the same light as a proper IT company

KP

[O_Relly]

Thanks kenfrapin and mulderpf for that.

@mulderpf:
It's scary to note that some companies really don't consider you if have done contract work in the past.

@kenfrapin:
Agree that consulting is different, and enticing especially with well known brand names with a guaranteed career growth plan etc. Let's say an employee gets promoted in his organisation, now does this change his role and responsibilities within the client organisation that he is deputed in ? except that it increases his pay and exposes him to a possible new / senior role in his next consulting assignment ?

Now in the case of a contractor with an umbrella company, (with obviously no promotion, as there is no employer to promote him) who is constantly updating his skills, can't he apply for a senior / better role with a better rate with the skills and learning he acquired from his previous contract ?

I am not trying to compare and say both are the same, but just trying to find out how different they really are ? Ofcourse, the credibility that comes with being represented by brand names such as Deloitte and such is something else.

It doesn't seem fair that they don't consider people with contract work on their resume for permanent employment, especially when they themselves are not very different from what 'umbrella companies' do, except that, they take the entire billing from the client and pay the employee a monthly salary in exchange for benefits such as annual vacation, pension contribution, training & certification. Of course, the trade-off is the security of bench-pay, and security of a job and salary during gap times between assignments.

Also, I have friends who were contracting for the same bank for 3 years, but this was in the US, with a h1b where they are stuck to a single umbrella company (read body shopper) until they are smart enough to get into a perm position where the company sponsors their h1b. I am not aware of the contracting world in the UK though, but I am assuming that there are chances that contracts can go on for longer duration rather than being just for 3/6 months?

I have neither worked in contracting or consulting, I have worked in a permanent role with a product company all my life. This is entirely based on my understanding from reading and hearing from friends who have been there, done that.

[mulderpf]

No, I think your view on the "similarities" between contractors and consultants is very skewed.

As a contractor, you generally "own" the client - the umbrella company is simply a means of payment and really has nothing to do with your client (other than funneling payment to you and keeping some of it to themselves for "services provided to you"). If decide to change umbrella companies or start a limited company, you can normally do so (other than if the umbrella company in their contract with you prohibits it) and still continue working with "your" client. You are working with the "client" as a representative of yourself (not the umbrella company).

As a consultant, your employer "owns" the client - if you leave, you don't get to take your client with you - your employer will "keep" the client and replace you. You are working with the "client" as a representative of your consulting house (not yourself).

A consultant can be either a contractor or a permanent employee. But a contracting house is NOT an umbrella company and is by no means similar. Similarly, consultants and contractors are also two completely different concepts - I'm trying to see how you can even equate them, as really, you can't...

[O_Relly]

@mulderpf

Like I said earlier, my intention was not to equate them. I agree a contracting house is entirely different from a umbrella company. My only point was that it was not fair of companies (read contracting houses) not considering a person for permanent employment just because he has contracted (on this own) in the past.

[kenfrapin]

@mulderpf

Like I said earlier, my intention was not to equate them. I agree a contracting house is entirely different from a umbrella company. My only point was that it was not fair of companies (read contracting houses) not considering a person for permanent employment just because he has contracted (on this own) in the past.

So this has nothing to do with a person being a contractor or perm employee. The issue, from past experience is, those who have had a go at contracting and then come back can never be trusted. Again, this is from previous experience learnt the hard way.
There are many senior roles that contractors aim for because their day rates are so high, contracting for long and then moving to a perm role is a big wake up call when that first pay slip comes and when realization sets in you get half the pay for doing double the work - end result, many go back to contracting within a year or so.

Though not fair, this is how it goes - there may be genuine contractors wanting to go perm but companies are wary of providing mid to senior positions to contractors just because they are not sure when the next big contract will make them leave

And finally, contracting never expands your skill set. A contractor is paid so much because he/she is an expert in a single niche area/domain/technology. So in essence, a contractor comes in with expertise on a single topic, solves problems, delivers projects and leaves.....in essence, a contractor just fills a position, the same position, wherever he/she works - and gains more expertise in their area only

Consulting, as mulderpf said, is all about building and end to end solution and delivering value. So working in Consulting firms, small or big, gives you an experience of the overall view and opens up your skills to so many areas. This is why many youngsters get into these Consulting firms for 3 to 4 years and then easily move in to smaller niche companies where they have fixed work hours and a relaxed life

Contracting, unfortunately, makes one a one trick pony - excellent in something specific with years and years of experience. Nobody wants a contractor with a million skills, such contractors never get jobs!
Consulting, and that too proper consulting not bodyshopping, builds skills across domains and technologies and gives you the opportunity to have a view on real world problems - how what techies do behind the scenes affect the actual end user and profits - and that's where quality Consulting work opens so many doors once you have experience

KP

[cisco3181]

And finally, contracting never expands your skill set

contracting, unfortunately, makes one a one trick pony

So typical... I never thought KP will write this. you seemed like a reasonable guy to me but...

There will be many contractors who will prove you wrong anytime. They probably expand there skill set in a much better way than the permi guys as they have a reason and motivation unlike a permanent guy who doen't have to worry for his new job.

[kenfrapin]

trust me - I have friends who were contractors and have excellent high profile roles now BUT I was making a generic statement - and the generic market sentiment especially with most employers is to oversee an excellent contractor and instead take on a mediocre person who has never contracted.....that's the unfortunate truth...

Also - there are contractors who know how to manage their career, expand their skillsets, grow out and cover wide areas within technology and business - and examples of this are the high flying Consultants who come in and manage multi million dollar budgets - but considering the entire contracting market, they are a small minority.....so a generic statement that most contractors are good at what they do is true...and the 'one trick pony' was not derogatory, it meant to imply they are best at exactly what they do rather than have expertise in a handful of areas - and once again, thats the truth because companies and agencies looking for contractors toss away CVs that detail experience in many areas - all they look for is a history of experience in one single technology/product to validate paying such high day rates -

most contractors dont get £1000 a day with 10yrs experience working working across many areas, well they can can have it but chances of bagging that amazing contract will be ever more impossible

I knew one guy in his 50s making £1500 a day (for about 2 years I may add) and he got that after a stiff competition - what helped him? The fact that he worked on this specific IBM product for about 12 years!!!

EDIT - May I add this post was comparing Consultants v/s Contractors which is entirely different from Permanent v/s Contracting. Consulting in the UK is the real stuff especially if its not body shopping and managing end to end solution delivery. Permie jobs in industry is a cake walk - 9 to 5 without the constant pressure

KP

[Idea]

I am a contractor and would I agree with the 'one trick pony' statement ?- no. again based on my experience, I don’t find a big difference in the role contractors and
permie perform, except the managerial stuff which the employer wants limit to staff people as co. policy. again saying staff are more reliabilty is arguable…as I have come across
staff people move earlier than contractors.

I have not come across consultants to make any comment…only contractors with high level of experience in a field performing a consulting role (hence higher rates)

Consulting by definition is providing a specialised service. I don’t know how one can be a consultant without being a specialist (with lot of experience) in one field.

[kenfrapin]

Consulting by definition is providing a specialised service. I don’t know how one can be a consultant without being a specialist (with lot of experience) in one field.

Quite a grey area really but
1. Consulting usually refers to overall involvement across products and technology more so with delivering end to end solutions. For example, an Operations Release Manager, IT Environments Lead, Solutions Architect, Product Manager etc

2. Contracting, again I am being very specific to IT and Consulting, tends to get best rates and good roles when the person works on a specific task - Project Management, Product SME etc

The joke is many Consulting companies hire contractors as Consultants
And finally - Consultants find it difficult bagging contracting roles, permies trying to get into contracting find it difficult getting their first contract and contractors find it difficult getting back into permie roles - a vicious circle of life is what it is!!!

KP

[Idea]

I'm reminded of my boss (just so I don’t use any other title) early in my career while discussing about my job promotion, he said …"you can call yourself a manager if you want, I don’t mind, but will it make you one ?"

End of the day all job titles and classifications does not mean much as they are all relative…

[gainvidya]

permies trying to get into contracting find it difficult getting their first contract
KP

Would you expand on that.

[kenfrapin]

permies trying to get into contracting find it difficult getting their first contract
KP

Would you expand on that.

As simple as a fresh grad trying for an experienced job role - to get a contract role all agencies/companies want people with prior contracting experience else one cannot get the role or may be low balled into a terrible day rate which makes no sense.

Its well known that securing your first contract for a decent day rate is difficult but once thats out of the way then depending on how one builds their network, contracting brings in a lot of money and financial bliss - with the caveat that you keep contracting without too many breaks in between

KP

[O_Relly]

@kenfrapin

delivering end to end solutions

Did you notice that you have used that 4 times in your previous posts in this page. You must be an accounts manager pitching for bringing in new clients to your employer

[kenfrapin]

Oh how I wish I was
I have worked across organisations building solutions over 8 years which is why I repeat the words. I'm in IT but not attached to technology side, more a tech/biz solutions guy ensuring others get my work done...lol

KP

[MarcusB]

I have had a few employment agents tell me about companies who will not even look at you if you have ANY contracting work on your CV. They actually have screening questions where they ask "have you ever worked in a contracting role?". They will not even consider you.

I'm amazed by this. In my experience employers were happy if they could lure a former contractor into permanent work.

[mulderpf]

I have had a few employment agents tell me about companies who will not even look at you if you have ANY contracting work on your CV. They actually have screening questions where they ask "have you ever worked in a contracting role?". They will not even consider you.

I'm amazed by this. In my experience employers were happy if they could lure a former contractor into permanent work.

Note that it's not all, I said a few. There were many who were not too phased by it, but I've had one really nasty incident and a couple of interesting discussions with agents on this point. I'm simply pointing out that it can make your life much more difficult if you intend on shifting from the one to the other later.

[harsha7kp]

I have been working as a contractor for 5 years, and never ever have I faced/heard issues wherein the job agency has refused a CV because the person worked as a contractor. On the contrary, the companies are keen to get contractors to become perm employees. This is true atleast in financial\investment banking Industry.
Infact one of the companies that I worked for 2 years previously, pestered me to go perm so much that I had to finally look for another contract role elsewhere.

Also, generally I dont find any much difference between Contracting and perm in terms of skill sets improvement. The major difference for IT guys is that perm IT guys try to learn more about the busienss side of things and we Contracting IT guys try to learn and improve on our technical skill sets.

Also, who/what gets paid £1500/day for 2 years? An exotics trader??
I dont think anyone will be paid ridiculous amount like £1500/day unless the contract role is just for 1 or 2 months and that too for niche skillsets.
Yes, have seen technical architects and business analysts(and not managers) charge upto £1k/day which is honestly top end of the contracting market.
Had seen a couple of Tibco BE contractors charge £900/day.
But most of the contractors, even in the high paying Oil&gas or Inv banking industry, get paid anywhere between £400 to £700/day. I would say, £550 is actually the average rate if you consider both BAs, Quants and IT guys in this industry.

I guess there are a lot of guys in this forum from India(especially techies) who would agree that going contracting is way much better than perm, especially if you dont plan to settle in this country and dont have a career progression plan here.
For Indian techies, the best deal would be to do contracting, have a limited company(and know all the tax saving techniques), save and invest back in India(probably in commercial properties), and return back to India in 8-10 years by which time you would have accumulated so much income generating property that your contracting rates will be more or less equivalent to the earnings from your property back in India.

Have seen quite a few smart chaps do that already...

[kenfrapin]

I have been working as a contractor for 5 years, and never ever have I faced/heard issues wherein the job agency has refused a CV because the person worked as a contractor. On the contrary, the companies are keen to get contractors to become perm employees. This is true atleast in financial\investment banking Industry.

This is after you contract with that company, they pester you to go perm - different from what we have been discussing where you apply for a perm role with a company after contracting for a few years

Infact one of the companies that I worked for 2 years previously, pestered me to go perm so much that I had to finally look for another contract role elsewhere.

And you proved my previous point. My friends are being pestered everyday because they like their work and want to get away by paying a lower monthly salary.

Also, generally I dont find any much difference between Contracting and perm in terms of skill sets improvement. The major difference for IT guys is that perm IT guys try to learn more about the busienss side of things and we Contracting IT guys try to learn and improve on our technical skill sets.

Yup, I agree completely with what you have said. Also, perms have a lot of opportunities to scale up and move into management so career wise, being perm has a lot more going for you.

Also, who/what gets paid £1500/day for 2 years? An exotics trader??
I dont think anyone will be paid ridiculous amount like £1500/day unless the contract role is just for 1 or 2 months and that too for niche skillsets.
Yes, have seen technical architects and business analysts(and not managers) charge upto £1k/day which is honestly top end of the contracting market.
Had seen a couple of Tibco BE contractors charge £900/day.
But most of the contractors, even in the high paying Oil&gas or Inv banking industry, get paid anywhere between £400 to £700/day. I would say, £550 is actually the average rate if you consider both BAs, Quants and IT guys in this industry.

While I agree the average is £500/day thats only true in London and bigger cities. I believe the average is much lower around £300/day. I know of people in the industry and from here where the rates are as low as £180/day. On the higher side trust me, I dont have a lot of experience but have gone into interviews paying £700/day but never had the guts to go for it (wish I had). I know of people who earn close to £1k/day and crazy as it may sound, it is very true.

save and invest back in India(probably in commercial properties), and return back to India in 8-10 years

I would definitely not advice anyone of such a move. The world today is changing so fast you are not sure what will life be in any county in 10years time.
Also, I dont believe in spending 10 years in a country just to save up and then go back. Life is precious and 10 years is a long time to not settle down and build roots in your community. I would not want to lose 8 or 10years just working to build my nest egg and then go back to India and start from scratch again. Also,you not only lose 10years but you also lose the friends you have made, your family(which most of us will have in those 10years) lose the bonds they have built where they have lived and even India will feel alien when you go back and settle down after 10years. If you have a family its very unfair to your child/ren, if born here and schooling are more British than Indian and taking them back when they are above 5 years is something I wont advice.

Many people think its all about money and saving now to then returning home and settling down for good. I have seen this happen as a widespread practice in the early 90s with people working in the Middle East - must say, its never proven successful because 10 years is just too long a time frame not to live your life and enjoy your younger years.

You end up saving and saving and telling yourself you will go back and when you finally do, you will be in your mid-40s with a nice big belly, hardly any friends left, the place being a lot different from what you remember 10 years back, habits more English than Indian and quietly regretting you did not make more of the time you lost thinking of the future and silently, every day, wish you had spent a little more time enjoying your younger days with the money you earned

KP

[harsha7kp]

I would definitely not advice anyone of such a move. The world today is changing so fast you are not sure what will life be in any county in 10years time.
Also, I dont believe in spending 10 years in a country just to save up and then go back. Life is precious and 10 years is a long time to not settle down and build roots in your community. I would not want to lose 8 or 10years just working to build my nest egg and then go back to India and start from scratch again. Also,you not only lose 10years but you also lose the friends you have made, your family(which most of us will have in those 10years) lose the bonds they have built where they have lived and even India will feel alien when you go back and settle down after 10years. If you have a family its very unfair to your child/ren, if born here and schooling are more British than Indian and taking them back when they are above 5 years is something I wont advice.

Many people think its all about money and saving now to then returning home and settling down for good. I have seen this happen as a widespread practice in the early 90s with people working in the Middle East - must say, its never proven successful because 10 years is just too long a time frame not to live your life and enjoy your younger years.

You end up saving and saving and telling yourself you will go back and when you finally do, you will be in your mid-40s with a nice big belly, hardly any friends left, the place being a lot different from what you remember 10 years back, habits more English than Indian and quietly regretting you did not make more of the time you lost thinking of the future and silently, every day, wish you had spent a little more time enjoying your younger days with the money you earned

Dude, Investment strategies are left to an individuals choice and only time can tell if the decision was right or wrong. Yes times do change fast, and thats the very reason why NRIs should invest in india before its too late:p
I'm not saying you don't enjoy your life here, you just need to plan it out very well. Don't compare 1990s to this present day. In early 1990s, india was bankrupt and had to pledge it's gold to Bank Of England to raise money, and today the tables have turned. Times do change fast eh?;)
These days a lot of people make it a habit to visit India atleast one or twice. And their relatives and friends visit them here in UK atleast once a year. These are not 1980s where Indians only used to hardly see their relatives and friends back home. Besides you get to enjoy your prime years in a beautiful country like UK, enjoy all the fun that this country has to offer and at the same time earn in pounds and invest in rupees. If you are 25 and start earning £500/day for the next 10 years and keep investing In India, then by the time you are 35 your investments in India itself would be giving you returns equivalent to your contract rates. Because your contract rates hardly changes here YoY isnt it. But in India, you have a capital appreciation + high rental yield+opportunities to save on tax(could include black money as well).
Even in the most conservative estimate, your high risk investment here may fail to match the returns on the most stable investments.
Thats the whole point. I will be surprised if anyone earning a good living here in UK does not have investments at all in India.
Indians having pot belly - Stereotypes of 1990s again?
I think the confusion of being British or Indian, to follow this culture or the native culture will be more inherent in the people who would settle here rather than people who go back.

You really had an offer of £700/day and you did'nt take it, eh? Hmm...

I guess there are other benefits to being a contractor - you can save a lot on tax.

[kenfrapin]

I hate to admit it but what you have said is all but true.........visiting and being in touch with family is so much more easier today and yes, I dont think even 10 years down the line will make a difference

I was just contradicting what you had mentioned on not planning for career progression, making money and then going back but your further post shows you do have a plan

And trust me, not a day goes by where I dont think why I should not step into contracting....I work in a specialized field so getting contracts over £500/day is easy....I think I need to build the confidence and guts to do that....lol...

All the best....BTW, I too believe in investing in Asia.....over the long term it is emerging countries that will pay best dividends...but a portfolio of only property Im not too sure about that....spreading your bets across China, India, South Americas and South East Asia sounds better....but hell, this is from a guy who still hasnt gone contracting so I do need to first sort that out and take a step towards financial bliss....

One thing I definitely disagree with you....most Indians, once married or over 30, whichever comes first, develop a lovely full rounded belly.....there are very few of us who have finally got in control and maintain a healthy physique.....it may just be you and me but still, almost all are out of shape and the lovely food couple with being a potato couch will never help their case!!!

KP