

Don't Hire That Developer - bconway
http://itmanagement.earthweb.com/features/article.php/3897921/Dont-Hire-That-Developer.htm

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angrycoder
As someone who has been working as a contractor for the past two years, the
big thing I see missing from that list is 'the ability to say no'. That is my
primary motivator for staying independent, I get to pick the problems I work
on. That is the deciding factor when switching clients or picking up a new
task with an existing client, which one of them has the most interesting
problem.

The big negative that the article doesn't talk about is all the time you have
to spend maintaing a social and professional network. The interesting problems
aren't going to come knocking on your door.

Also, the comments about getting paid for 'all your time' are BS. Submitting
invoices for 60 hours a week is a great way to find yourself out of a contract
real quick. That extra billing is reserved for things like crunch in the last
few weeks of the project or when someone explicitly asks you to take on extra
work. Invoices over 40 hours maybe cool with the manager, but they send up red
flags in accounting and suddenly everyone is wondering why they are paying you
for 60 hours a week when they could hire 2 or 3 full time employees.

~~~
zepolen
I suppose you could split those 60 hours between 3 projects making it 20 hours
a piece which won't be as tragic for accounting.

~~~
philwelch
Or just do 40 hours of work every week. If you cut out some of the time-
wasting employees have to endure you might be able to get the work done in
that amount of time anyway.

~~~
notahacker
surely you have your own additional "timewasting" when it comes to looking for
opportunities, convincing employers you actually have the skills to do the
job, dealing with corporate departments who think you should be filling in the
same paperwork as the regular employees do at the start of their employment
for each individual project (the only part you might actually be able to say
no to...) and managing your own accounts.

~~~
davidw
You don't bill for that stuff, though.

------
sethg
The OP claims that employers don’t value the institutional knowledge that is
built up by employeees. I can refute this from my direct experience, which, as
I understand, is not atypical for a developer working at a startup.

I worked for five years for MetaCarta, which sold geographic search
technology, primarily to government agencies and oil companies. In April we
were aquired by Nokia, which runs its own search engine
(<http://maps.ovi.com/>) and wants to improve its local search capabilities.
Nokia hired all of the MetaCarta engineers, offering us retention bonuses. In
July, Nokia sold the government-and-oil end of MetaCarta’s business to Qbase,
a company in Ohio that I had never heard of before, licensing the technology
to Qbase and keeping the engineers.

If Nokia had considered the institutional knowledge of MetaCarta’s engineering
staff to be worthless, they would have just bought the IP and not given the
engineers any particular incentive to stay on.

~~~
mgkimsal
Some companies do, some don't. Glad you were in a camp that does. I've known
people who were at companies which didn't value that knowledge and would just
cut cut cut.

~~~
Tamerlin
I worked for one, but rather than constantly cutting, they have high turnover
and rely on golden handcuffs to keep people -- that they treat like slaves.
Their average turnover was 18 months, though in the seniors it was more like a
year (long enough to not have to pay back the signing bonus and relocation if
applicable).

And the management didn't seem to care; they would just hire more interns...
who they treated better than the seniors anyway.

And honestly, the work sucked. It was almost entirely a crapware maintenance
job, no engineering, and a staunch resistance to changing anything at all,
even the clumsy, buggy, and inefficient Perl-based "solution" that the company
relied on for around 70% of its catalog data.

------
alttab
Do not get distracted by the 2X+ times money he makes. Everyone has made the
point: no 401k, no health insurance.

What everyone seems to forget is you also have to pay a 15% self-employment
tax at the end of the year out of your pocket because you do not have a W-2.
The tax liability is higher as well.

So not only do you have to get independent insurance (which is very
expensive), you have no 401k or match and probably have to manage your own
Roth, you have increased tax liability and pretty much no control to push
back.

Now, I'm not saying you should be an employee vs. contractor - there's
benefits and downsides to both. But saying that a contractor makes even 90k
when an employee makes 45k isn't really saying much.

~~~
alanstorm
Good points for anyone if they're weighing the fulltime gig vs. contracting
vs. consulting. However

1\. The "Self Employment Tax" (in other words, FICA and Medicare) is closer to
7.5% extra for the self-employed. When you're an employee you pay 7.5% of
this, and your employer matches that. When you're self employed you pay the
entire thing.

2\. The FICA and medicare tax can be avoided if you're contracting through a
third party agency (and being paid W2 via that agency). This has its own set
of tradeoffs and rewards, but is another option worth considering.

3\. Remember that the 401k match has to vest, meaning that 4% match is closer
to 1.6% if you hold the job for only two years. (on the flip side, that 1.6%
is pre-tax)

The matching can also be a temporary benefit if your smaller company gets
bought out by a larger one.

4\. Paying your own health insurance is a burden, but it's a burden with a
fixed monthly cost. It's worth investigating self-insurance options and doing
a straight up dollars to dollars comparison.

Consulting and contracting aren't for everyone, but if there's parts of full-
time employment that frustrate you it's definitely a route worth considering.

~~~
pubbins
About 1 - This is why you pay yourself 40k and take the rest as profit
distributions. As long as your salary stays above 25% of total income you're
fine.

------
donaq
Speaking as someone who is currently a contractor dealing with arcane legacy
code without documentation (as is usually the case in my experience),
institutional knowledge matters.

~~~
bombs
To you or to management?

~~~
MJR
Both. First, Your job is harder if you have to turn over every rock in a
company looking for an answer, only to find the only people who had the answer
left last year.

Second, management's job is harder because no one ever has the answer. They
are constantly stuck training every employee on the most basic historical
project knowledge. I would wager that most projects are enhancement projects -
moving from one version of something to another and not replacement projects.
In enhancement projects historical knowledge is vital, in replacement projects
it isn't.

There are more than these two reasons - bottom line, it's important all
around.

------
felideon
_After all, I got an invitation to the company holiday party while Sam stayed
home counting his stack of contracting money._

Keep the holiday party, give me my check---I have a family to take out to a
nice holiday vacation.

------
ivenkys
I am not sure why this is not self-evident.

Practical Definitions: An Employee is part of the liability on a company's
balance-sheet, its a cost to be pruned when the going gets tough. IN any large
company worth its name he is just a number on the wrong side of the Balance
Sheet, how good/loyal he is almost completely irrelevant.

A Contractor is a resource and his cost comes from the Project's budget. A
manager's position is strengthened by managing ever larger(read costlier)
projects , it is in the manager's interest to have more resources(read
contractors). End Definitions.

Contractors by their very nature have no say in the corporate political power
game thereby not threatening a manager's position. If something doesn't work
out and its time for a scape-goat , contractors can very easily be dismissed ,
letting go of an employee is a much more onerous task.Given a choice a Manager
will almost always opt for a contractor and to top it all of Contractors earn
more cash.

Why would one want to be an employee in any large corporate entity ?

~~~
cookiecaper
"Given a choice a Manager will almost always opt for a contractor and to top
it all of Contractors earn more cash."

This hasn't been my experience at real-world medium-size companies around
here. I have friends in several, but almost everyone's IT department has a VP
or director that has a policy of "absolutely no contractors", so I can't get a
foot in the door at any of these places. If they want something done, they
_only_ do it internally. They will buy outside products, but they will not
outsource development work.

The other medium-big companies in the area have contracts with big groups like
RHT or EDS, which is really frustrating and annoying.

~~~
gaius
Well, the reasoning behind this is obvious. What is the value of a high tech
company? It's not "the brand", it's not that it owns a pile of servers in a
datacentre somewhere, it's not even in the code in its version control. It's
that it is a group of people able to identify and solve new and commercially
relevant problems, and that that group possesses a great deal of institutional
knowledge. A contractor has self-consciously decided to discount that kind of
knowledge; therefore what they can contribute in such an environment is only
what could be automated anyway.

------
llimllib
> If management builds a network of contractors, who are the best in the
> business, you bring on these true professionals who have one purpose – to
> get the job done. They will do it well because they want more work and a
> good reference.

Not necessarily true. A contractor's incentive is to work as much as possible,
and often she can find ways to increase the amount of work necessary.

An extreme example is that of Oracle consultants; I know several tales of the
one Oracle consultant being the foot in the door to a whole team of Oracle
consultants who get management's ear and tell them what they need.

I'm not saying all consultants do this; clearly not. However, the article
makes it seem as if contractors' incentives are more closely aligned to the
company's than they are.

~~~
ora600
Speaking as Oracle consultant, very often you have no clue how much work is
going to be there until you are there. We are very lucky if management
actually listens to what you need. Which is often very simple things such as
fix reoccuring errors, upgrade components that keep crashing, put decent
monitoring in place, make sure the backup strategy makes sense and test the
backups.

I've been in situations where I was contracted for 30 hours to "just help us
deploy X", discovered what the database looks like and have been able to
upgrade my contract to 300 hours of upgrades, monitors, automation, backup
verifications, etc.

I can see how this looks like a contractor trying to create lots of work, but
all this work did have good reasons behind it.

I have to sell my rationale for extra work to the customer and it is not
always trivial. Often it is easier to say "well, its your data, its not like
its my problem that your backups are untested", but I wouldn't be in this
business if I didn't care about data being safe.

I completely agree that contractors are more focused than employees on getting
the job done well.

Once I've overheard two developers talk about me: "Well, of course Gwen is
always cheerful and always happily does what we ask, she's a contractor -
thats how they do their marketing.". I'm proud of cheerfully and competently
doing my job. I'm always wondering why many full-time DBAs act like they are
doing you a favor when they create indexes, clone production to development
and generally do what they were hired to do.

------
ojbyrne
"but once you get let go as an employee it’s harder to find your next job
because you aren’t always in that job-seeking mode like a contractor is"

From an employee's point of view, the solution is simple. Always be in that
job-seeking mode.

~~~
Vitaly
This is much more of a problem. You can't switch jobs every few months and
expect people to continue hiring you. Contractor can and usually does take on
new projects all the time. So as a contractor when I hear 'Can you do X for
us', the answer is usually yes, if it comes within our expertise area, but as
an employee, especially freshly hired, you can't respond to every job
interview request unless you really really intend to leave.

~~~
ojbyrne
It really depends on the job you're leaving and the job you're going to. I
often respond to interview requests, though I basically start the conversation
with "I'm not really looking, but I don't mind talking to you." I'm not really
an entry level employee, though.

------
MJR
He got paid more and he has more expenses. No health coverage - he'll be lucky
to find a group policy with an organization or professional association. No
matching 401K, no tuition reimbursement, and on and on. It's not a valid
comparison. Line up the employee's benefits and income against the
contractor's expenses and income and then see where you come out.

Then realize you've only looked at one piece of the equation and you can start
weighing the pros and cons of continued employment, opportunities for career
advancement, etc.

~~~
stuff4ben
He said he was getting paid more than twice the amount his fried was. Are you
saying that your benefits equal your salary? Highly doubtful unless your
salary is artificially low (I assume you're a developer-type). Benefits aren't
that high for contractors, usually it's just the healthcare that gets you. But
even if you pay a non-group, family rate, it's only 15-20K a year which is
chump change if you're charging $100+ an hour. Then you get into tax
deductions that you just don't get as a full time employee.

~~~
mgkimsal
20k per year? Wow. Even the most expensive family plans I've seen for family
with pre-existing conditions was around $1100/month - $13k. I feel like I'm
getting ripped off and we only pay around $300/month!

------
nevinera
Fictional conversations in which one person picks apart another's argument are
a farcical way to present a point. It's a way for a writer to avoid having to
let an argument stand on its merits - we as humans are not particularly good
at divorcing an argument from the arguer.

Time after time, this author presents one character as surprised and
incredulous, and the other as collected and confident. While it's a great way
to convince people of something, it's underhanded and rude.

I don't appreciate being subjected to this crap.

------
e40
I'm surprised no one has said this: this is illegal in most of the US
(definitely in CA). Contractors cannot do the same job as employees. It is
skirting the labor by doing this, and circumventing employment taxes.

In the economic hard times, many states (WA, CA, MA) are going after companies
that do this. Yes, auditing and fines.

You might think they won't find you. Well, here's how they will: contractor
Joe has been working for you for 3 years. You decide you don't want him
anymore (for a variety of reasons). He files for unemployment, even though
he's not supposed to. He figures, hey, I'm an employee so I deserve it. In CA,
the EDD will use this red flag to audit, likely find that Joe was an employee,
fine the company _and_ give Joe his unemployment insurance.

I'm not passing judgement here, just stating the facts.

~~~
hnal943
It's obviously not illegal to hire contractors to work on a specific projects.

The scheme you're suggesting where an employer hires people and calls them
"independent contractors" to dodge taxes is not at all what's being discussed
in the article.

------
Revisor
Let me turn that around: What is a better course for an employer, say an
internet startup or a small software / webdesign company? To hire contractors
or employees?

My first thought would since software/web is the core activity, employ them
(bind them closer).

What do you think?

~~~
sdh
Binding a 120k software developer to a desk is expensive when you only need
them for a few months out of the year. The rest of the time a 50k developer
would do just fine.

------
davidw
Looks like a rehash of "The Nature of the Firm"

<http://en.wikipedia.org/wiki/The_Nature_of_the_Firm>

That's the theory underlying the differences between the two.

------
bombs
There have been times where my longer term contractings jobs were normal jobs,
except I had to pay for my own benefits. I think the government now frowns
upon this practice though.

~~~
jrockway
Indeed. I was a contractor for the last year or so. Now I am an associate at
the same company. I sit at the same desk and do the same work. Except now my
salary is higher, I get a month of vacation, I get 401(k) matching, I get
vision/medical/dental insurance, and so on. And I still don't wake up for the
"rah rah" meetings :)

I worked with people exactly like the contractor in the article. This kind of
person cares only about one thing; money. The project? Secondary. Coming to
work regularly? Secondary. Finding every last tax deduction? Critical.

(I take it as a compliment that someone I work with told me, "wow, you're a
contractor? I had no idea".)

~~~
jasonkester
Sounds like you weren't ever actually a contractor.

There are two types of position that employers describe as "Contractor". The
first is the type described in the article, where you bring in a guy for a
short term and pay him roughly double what you'd pay a regular dev. The second
type is where you bring in a guy, pay him the equivilent of a regular dev
salary, but as an hourly rate, and don't give him any benefits.

This second type has a more common name: "Being taken advangage of."

Sounds like that's the type of "contracting" you were doing. Congrats on
getting out of it.

------
GBond
One of the issues I had as a contractor was amount of energy I spent chasing
invoices. Not being paid on time (or at all) was a big headache for me. I know
this is less of a concern for gov't contracts but some of the mid-size corps
would place me last on the totem pole when prioritizing their vendors, knowing
I was a 1 man shop.

