markcst

Contracting here (IT wise) is basically setting up your own business and getting your own clients. Ie running a proper business. You need connections to do this or you need to be prepared to have some kind of model (i.e starve to gain work) where you can get into a network and then take the opportunities that arise. Most independent companies (re: contractors) don't do that well unless you know people. Its that simple. I'd suggest taking a permie job and then look to go on your own after you understand the culture over here. Most people who do this are also close to retirement from what I have seen. (IT wise).

goatherder

6 weeks for me here in the US in Financial services - started on 20 - the problem is that my co-workers seem to think that 3 weeks out of the office is unusual!

MarylandNed

This has been my experience too.

I'm in IT as a permanent employee of a very large global company. My software development group writes in-house applications and has a large number of large software projects going on at any one time. We keep a large core staff of permanent employees for purposes of stability and holding on to knowledge. We supplement with outside contractors as needed (which over the past 10 years has been constantly) but these are usually permanent employees of other companies - "bodyshoppers" as you put it.

We do occasionally use some high-profile contractors who truly are self-employed. These people are industry experts. Some have written books in their areas of expertise.

The big difference between the UK and US in this regard is healthcare. The UK has universal healthcare through the NHS so it's easier to be an independent contractor as you are not dependent on an employer providing health insurance. In the US, most people need employer-provided health insurance to be able to afford healthcare.

mrken30

Did the 28 days include holidays and sick? I naively took a job with 25 days not realizing there was no EIB or extra sick time. I also have to use 7 days a year for compulsory holidays. My last job was more like the UK 3 weeks vacation+ 10 days sick, + 12 holidays. , but no rollover, it was a use it or lose it policy.

Steerpike

I'm confused; why are the tax benefits of being a contractor non-existent? Take a look at this article: To be or not to be a 1099 Contractor | 321GoProject
and this article: Currently on 1099, Should i start S Corp for my self?

For the lack of healthcare issue, now that we have the ACA, you can get your own healthcare at a predictable price. True, most companies pay this for you but it's all just numbers you need to compare.

I was a full-time (W-2) employee in the IT industry for over 30 years, making close to $200k/yr in the last years of full-time work. In 2013, I formed an S-Corp with a colleague and now work on projects 'by the hour'. I'm currently charging $125/hr, a number I'm learning is way lower than I could charge. But even at 125/hr, working 2080 hours a year, I'd receive $260k/hr. I pay $7k/yr for an ACA compliant health plan.

But the big advantage, financially, is not just the higher hourly rate, but the tax benefits as identified in those articles above. I write off all my mileage (driving to clients), my cell phone, my office 365 subscription; my laptop(s), and all my toys; I pay myself home-office rent (which does bite me back as personal income); etc. On the downside, I don't get stock options, or retirement contributions.

In my case, though, the biggest advantage is that I have great control over my schedule. I'm currently working only about 20-30 hrs/wk, by choice, and also setting my own daily schedule - nothing before 11am, and quite a bit of work in the evening (which I prefer). After 30 years of being a 'permie', I'm so happy not to have to deal with company bs ... meetings, policies, etc. I work; I get paid; it's that simple.

I was well-served by being a full-time employee; worked in some great companies, with great people, on great projects, and did well with stock options and benefits. But at this stage of my career, I just want to keep myself busy and work with people I like (I just fired my biggest client because they kept ignoring my advice ... it was great to have the freedom to tell them to go find someone else).

Steerpike

Pretty much describes my situation! I'm relying heavily on the contacts I made as a permie. I worked my butt off all my life and got a great reputation, so it's been easy to approach my 'network' and find work.

I will also add; I took 6 months off after my last full-time job, and now work a much reduced schedule. I never cared about the limited time off as a permie, since my work was always great. But now I'm making up for it!

kins

Sick pay was covered through a disability policy that the company paid for. If you were ill in the first year I think you had to take the first 5 days out of PTO but after that it was covered. I got 8 or 9 public holidays on top of the 28 days PTO. If I'd worked there a few more years I'd have been on 33 days PTO. You could roll over 5 days each year, and if you needed more time off for something that sick pay didn't cover then you could take it from a donated bank.

Steerpike

One other point I'd add about contracting / being self-employed; I recently applied for a home equity loan and found that they would not consider my income at all since I had less than 2 years of operating history as a corporation / self-employed. It didn't matter in my case because my g/f's income was sufficient to cover the requirements, but - had we been younger / earlier in our careers, this could have been a big issue. One more reason to be a full-time employee as you get started.

MarylandNed

I'll soon be on 28 days of Paid Time Off (PTO) based on years of service (that's the max that anyone in my company can have - including the CEO). I can also purchase an additional 5 days (which basically means I can have 33 days off if I take a slight pay cut). I do not have to use my PTO for the statutory holidays - I've never heard of salaried employees having to do that unless they are in jobs that require them to work some holidays (e.g. my wife has that issue as she is a nurse). I do have to use PTO days if I'm off sick. I've never had a job in the US or Canada that included free sick days. My last job in the UK had unlimited paid sick days and as long as you didn't abuse it, you were OK. I think I averaged about 12 sick days (i.e. bad hangovers) a year.

mrken30

That's exactly what I thought until I got a job in healthcare. I am an exempt employee and have to take public holidays out of my 25 days PTO. I work in IT. It has to be the worst benefits going. I just took the view it's safer than the HI Tech sector at the moment and my commute went from an hour to 15 mins.

username.exe

Do not undervalue time spent not commuting. It's making a huuuge difference to my quality of life, I love spending an extra couple of hours per day with my kids.

mrken30

Totally agree, I spent 7 years with 5-10 min commute, then they moved 60-90 minutes away, hence the change of job. Still sucks having less vacation. It was nice seeing my kids growing up, I could even come home for lunch.

MarylandNed

Absolutely. I have been telecommuting for about 10 years. It's not just the extra time with family that is a bonus. I'm available to walk the dog, take kids to doctor appts, etc. It means the house isn't empty should someone come by and think about breaking in. Not having to deal with the stress of a commute is good for my health (as is walking the dog). I save money on gas, wear and tear on the car and lunches. I can run errands when everyone else is at work. And I don't even have to shower every day!

ldollard

I've started contracting myself over the last 2 years, still working full time though. And i'll echo what everyone else has said. If you want to be a self-employed contractor, you have to know people, its that simple, you cant do it by yourself from scratch unless you get incredibly lucky.

Its better to work for a company build contacts, work on the side, be extremely reliable and nice (being nice is very important for IT people); and that way you'll build a network.

I had someone i worked with for 6 months, 2 years later they called me to ask to do project work for them and it started from there, guess I make an impression on them. Two years later, we are now talking about partnering up for our own web design/hosting company in the next few months.

anotherlimey

I'm interested in what field of IT your permanent job is and the contracting. I'm considering transitioning to contracting with a view to open a company; I would start by staying full-time and contracting part time.