How is being hired as a consultant better than being hired full-time permanent?

[leeroysphitz]

I had an important job interview this Friday afternoon with the VP of a pretty large promotional display company.
When we got around to discussing compensation he first asked if I was interested in being a consultant rather than full-time/ permanent. I told him that I was looking for full-time / permanent.

He said OK but that consulting would be to my benefit. We moved on to talk money and he didn't elaborate.

So my question is this: Was he full of shit or am I missing something about consultancy?


What do YOU think?

[charlie and algernon]

1. shouldn't you be able to name your own price as a consultant?

The consultants my company hired gave us a price sheet of what each of their services cost and we picked which we wanted.

[leeroysphitz]

4. But don't I have to take care of health and taxes my self?

That would suck.


BTW your sig line is the coolest thing I have ever seen.

[charlie and algernon]

5. haha those owls are pretty popular here

people complained when I attempted to change it to something else, lol, and the owls had to come back.

Yes, you would have to provide your own health care and taxes. That could be the other side of it. A fancy way of saying your just an independent contrator. that means all they need to do is give you your check with nothing taken out and no benefits. Some states actually have legislation on that. in those states, if an employeer knowningly classifies you as an independent contractor but treats you as a regular employeee, meaning you have no control, they can be fined and shut down. It's different in different states, check to see what your state has on misclassification.

[kath]

12. Misclassification of workers is rampant, and it's WRONG.

Depending on the working conditions of the job, either the position is one of employee or of independent contractor - it's one or the other, it CAN'T be both, ie where you get to "choose which one". Employers like to list you as an ind. contractor, that way they don't have to pay you any benefits, nor do they have to pay workers' comp. or unemployment insurance on you. (charlie and algernon, it's not just a state-by-state thing, it's federal law.)

Microsoft lost MILLIONS of dollars in a court case back in the 90s for misclassifying workers as independent contractors. see Vizcaino et. al. v. Microsoft.

When Obama was a Senator, misclassification of workers was something he was supposedly trying to crack down on. It's way past time for this to happen.

Ironically, the Social Security Administration itself misclassifies most of the workers it has doing medical/psychological review of disability applications as independent contractors, when they are in fact employees - a government agency breaking the govt's (IRS and SSA) own rules. Lovely, eh?

[CaliforniaPeggy]

2. My dear leeroysphitz...

It's my understanding that consultants make more money.

Plus, they can look the company over without being employed there...

You might be better able to see the company for everything it is, both good and bad...

:shrug:

Good luck!

[midnight armadillo]

3. you get to pay your own taxes?

Or, if you're an Accenture consultant, you'll get paid 10x what the perm employees do and be expected to deliver 1/10th of what they do. Good racket they got going on there.

[Cant trust em]

6. As a consultant you take on more than one client at a time.

We are paying a consultant $4500 a month right now and she has at minimum one additional client.

That being said, in "this economy" I'd prefer the stable, regular paycheck.

[no name no slogan]

7. That's the trade-off

As an employee, you have certain rights and privileges. Like Unemployment Insurance if you get laid off, and possibly severance pay, and the benefit of advanced notice of termination.

As a consultant/independent contractor, you don't get that. They can toss your ass out on the street for any reason, at any time. And because technically you're self-employed, you don't qualify for Unemployment.

In this economy, I'd go for the employee option. If it were ten years ago, I'd have gone for the contractor.

[grace0418]

9. No one I know (including myself) who was laid off in the last year got any advance

notice of termination. And the people who are still at my old job are constantly worried about being next. In Illinois, you can be tossed out on the street at any time for any reason no matter how long you've worked somewhere or how valuable you were to the company. I was one of the top designers at my company. The day I got laid off, I was working on 5 different projects that had all been purchased by major retailers. We had a feeling there were going to be layoffs, but everyone in my department kept telling me that for sure I was safe because I had so much on my plate and so many of my designs were being purchased. Guess everyone was wrong.

You have a point with the unemployment insurance, but everything else really depends on the field. Of the 9 people who were laid off the same day I was last December, I'm doing the best because I am not looking for full-time work. I'm freelancing and getting tons of work that way. But there *are* no full-time jobs in the design field. Firms are laying people off left and right, then they panic when they realize they have no one to finish their projects. That's where I come in. Unemployment runs out pretty quick for people looking for full-time work, but as a freelancer I haven't gone more than a week without a project.

[grace0418]

8. Well, I'm a freelance designer who used to work full-time at one company.

It's not exactly the same but, in my case, freelancing is sooooo much better. You have a lot more freedom and you get paid for your time. The salaried employees at my client's office work super long hours and never get paid a dime more. I help out with the things they can't finish and I get paid for every hour I work. And when there isn't work for me, I don't have to sit behind a desk and look busy. So when a project gets changed a million times (as happens very often), they're super annoyed and I'm thrilled to help out because it means more money for me.

Basically, if I can average 20-25 hours a week of billable time, I will be making as much as I was at my old job where worked 40 hours a week at minimum.

[Amerigo Vespucci]

10. Glass half empty. glass half full

Same thing happened to me about 12 years ago. O had an interview at Pac Bell for a Project Management position. Found out it was contract, not permanent. Turned it down. The person who set it up encouraged me to reconsider, for a number of reasons. I did. Turns out that 12 years later, my former boss remains one of my best friends, and he's provided valuable feedback (and connections) for my business.

The other thing is that because this was an internet-based project at the enterprise level, it added major street cred to my qualifications when I sought large clients in my own business. Pac Bell was, and is, an impressive name to drop.

I'd encourage you to do the "Ben Franklin Close," a procedure near and dear to the heart of salespeople everywhere.

Take a piece of paper, draw a line down the middle, and on one side, list all of the reasons for taking the contract position. On the other, all of the reasons for not taking it. Take your time, list them all. There could very well be some long-term benefits that you've overlooked. Maybe not, but it's worth going through the process.

I didn't know it then, but if I'd stuck by my original decision 12 years ago, I would have made a major mistake.

[NMDemDist2]

11. consultants should charge at least 40% more than an employee

cuz (like you mentioned) you have to cover your own SSI, insurance etc AND you can't collect unemployment if the work drys up

it's to his benefit more than yours.......

[leeroysphitz]

14. That's what I always thought. The company benefits more than I do in my particular circumstances.

[bridgit]

13. I see parts of the econ turning round but some firms aren't *jumping* back in...

They're moving a bit slower going forward, and we're seeing another level of these republican/corporate; maybe even dem/corp nuance-esque alterations forming out there where consultants are able to be sometimes/simply not listened to for whatever reasons which are theirs, the firm's, to determine i.e. a further movement away from work being thought of as "full-time/permanent" and into an IC driven data base full of neo-consultants (I guess) competing for access to firms that mostly want to hear precious opinions about the precious things they do

It seemed round Reagan's time but payroll departments went to Human Resources...and that's exactly how they feel about it we're just a resource to them but now?

If you are to be positioned into a role as consultant then I say hang your own shingle, get a view on the areas where you feel your skill sets best applied and do it for yourself. Interesting that he wouldn't elaborate on the monetary side, or maybe predictable; but until you flesh out whether you'll be compensated for your product, and not just whether they accept it or not...you may as well imo operate as an IC

[NewJeffCT]

15. A consultant usually makes more on a per hour basis.... but

they lose out in benefits like health insurance, dental, vision, LTD, STD, paid holidays, paid vacations, 401k matches (if companies still do that...)