Large companies with huge teams of full-time employed software programmers will often hire contractors to fill gaps. These contractors are typically contractors-in-name-only: they work under exactly the same conditions as full-time employees but with a worse tax situation, without access to benefits, and without eligibility to receive equity or cash bonuses. They are often contracted through intermediaries who take a large cut. These contractors can be fired more easily than their full-time employed colleagues, and they may often work on time-limited contracts that cannot be renewed. (They often do not count against a manager's allotted "head count.")
These contractors are typically in this position, because cannot get hired as full-time employees. They often jump between contracting jobs until someone gives them a chance or until they manage to get a client to "convert" them to full-time.
Staffing firms are in on this. If a recruiter sends you to interview for a contract role at some large company, it means they don't think you could get a job as a full-time employee. Hiring managers also know this. If they see you've only ever worked as a contractor, then they will assume you don't have what it takes to get a job as a full-time employee.
(This is not right, and this is not fair.)
I've worked for Fortune 500 companies around here. The senior full time employees have been working at the same place forever, so their skills are often outdated. They get paid a lot less, but they are often fine with that, because the place gives them the one thing they want: status. Changing jobs means you might not get that status. In comparison, the top contractors get far better pay, have worked in more than one or two places in their career, and are the guys you want to hire.
It's probably different in the bay, where big tech companies have little trouble paying 200K+ compensation packages, but around here, just contractors do.
Why do the contractors get paid more? Because they can get paid without talking to HR, or meeting any pay bands. Last year, I worked with other three contractors, whose names anyone in the Scala community would recognize. 200-300K a year range. The best full timer they had (which just quit, after being told how silly he had been by being full time), made 110K.
Being well known means that switching to work for TrendyCo isn't difficult though.
- non-technical degree from a local state school
- 35+ years old
- only have a couple of years of professional software development experience and most of it as a contractor/consultant
- not white
- most of my work is back end bug-fixing, maintenance, being in an on-call rotation, and occasionally integrating some system to some enterprise database
- buzzwords in my resume (Java, Borg, RPC, Hibernate, SQL, XML, Eclipse IDE, DAO, DTO, etc) probably scares off the young devs because apparently anything remotely related to J2EE or enterprise is evil
- my real employer is one of those Indian staffing firms
Then both of us were disappointed when none of the startups were interested. The auction period came and went. I had zero offers to chat on the phone despite dozens of views. She was nice enough to give me another auction round and I went for it. Only a half dozen new views on my profile that time but at least I got one phone interview out of it. The talent advocate was a bit confused by the whole thing and couldn't understand why most of the startups didn't even want to speak to me. She did offer to personally reach out to some of the startups on my behalf but I knew what happened so I politely bowed out of the auction.
So I guess I have this stigma now and I know it's only going to get tougher the older I get. I want to fix this and hopefully move to a full-time product development role before it is too late. Should I quit my job and go back to school? Join a coding bootcamp or "hacker community"? Continue working as a contractor and keep applying to startups on the side?
We also still have a very very strong consultant labor force making 2-3x what W2 full-time employees can pull in. These consultants generally work through smaller consulting firms that take smaller cuts for the placement/handling billing and invoicing.
Perm - Mid level benefits + Pay (maybe options in a startup)
Contractor - Individual with their own Ltd company, pays less tax and much higher take home pay but without any benefits.
Consultant - On-site via a supplier on a framework of some kind, however, often a permanent employee of the supplier with the supplier cashing in the margin.
At least 50% of the tech workforce in companies I work with or where peers are at in London are made up of contractors, especially in Banking.
It's also my experience that you get what you pay for, contractors in the whole tend to have a much wider breadth of knowledge from various sectors and hit the ground running whereas I don't tend to see the same appetite from Permanent employees (in most cases!).
I took the job a year ago with the hope its name recognition would be helpful in the future but I had no idea there was such a stigma around contracting. I'm starting to look around again, so I guess I'll see how it effects me.
Breadth of experience counts and you can't get that without having 'been around'.
On the other hand, if you're hiring a contractor who has had lots of very short contracts, that should raise a warning flag.
Quite simply tho, why would any good contractor want to go permie? the attraction for me is simple... I get paid twice what I would otherwise get in a permie position.
Its not necessarily the length, but the lack of extensions that is a warning sign. Most projects do not last a short time so a lack of extensions indicates a problem.
I am really biased towards short, "solvable" projects :)
Graduates and junior developers will burn themselves to hell and back trying to impress their employer because they don't know any better. That includes people who have never worked for a proper business (i.e. not a VC backed startup).
Recruiters are often paid a commission for every one of their successful hires and that commission is often split between an immediate payment and a payment (or payments) when the hire hits specific milestones (6mo, 1 yr, etc). Recruiters don't like trying to fit contractors into non-contract roles because they're worried about the contractor leaving before the recruiter's remaining commission is paid. If that happens, the recruiter puts in just as much work and gets paid less. They'd rather discard those resumes that they consider to be riskier and focus all their time on people with a history of staying at least 2 years in every one of their jobs.
As for me, after co was acquired, I was a FTE for one day, with great benefits. But, the lawyers wouldn't clarify a claus in the FTE contract that would exempt my IP. Was I assigning it or excluding it? Their answer was "either". Before that, I was working for 4 days per week for the startup and 1 day per week on my own projects (at 4/5ths the pay).
I know plenty of indy developers that are absolutely brilliant. Sometimes they take on side projects as contractors.
Many contractors are really installers, and are great at bootstrapping a product or service. But... they know little or nothing about the actual running of the thing they setup. They don't get how to integrate their product's magic with your ITSM system, or what metrics to monitor, etc.
On the developer side, I've seen more than my share of consultants who are high-priests of whatever methodology/language/framework religion they preach, but have a hard time delivering value.
Or it could mean, someone that a company took on with a day-rate because they needed a warm body, but didn't want to actually hire them either, in case someone better came along.
Or anything in between.
Where does this come from? I actually see a contractor as someone who had experienced way more "war stories" than the guy who has been sitting in the same chair for 10/20 years. As a contractor, you are exposed to more technologies, more business sectors, different working cultures.