They are apples and apples from the client's perspective though and as an independent consultant it's quite possible to consistently achieve 100% utilization.
Well, in the consulting engagements I have done (about half of my career has been as an independent), all of my clients were aware of an important distinction, and that was that I was 1) there for a short time 2) did not incur the large overhead that a full-time employee would.
To achieve 100% is moderately difficult and would involve a bit of luck, or some kind of compromise.
I have 2-3 clients that put me well over 100% utilization for a couple years going strong now. I have to routinely turn down work. Don't even really have to look for it, and this is in the Midwest!
The one key I have found is not to sell yourself as a freelance consultant. Form an LLC and pitch as a business. If you need to find a couple other guys to help out for a large project do it. But you can command much higher rates this way.
60 hours a week really isn't that stressful. You could probably get there with less total stress by outsourcing cooking, cleaning, etc and working in 3 hour chunks with 1 hour breaks in between.
Remember that 60 hours/wk is only about 50% of your waking hours.
edit: Sorry, I somehow didn't understand you were saying it was a supply problem rather than a stress problem. The answer to supply is much simpler: go to tech meetups in the bay area and sound smart.
Agreed. Also, the reason consulting rates are not high is not b/c of the benefits (that makes at most 20% of the diff between consulting and full time rates). The difference is uncertainty! If you freelance, you have no idea where your next gig will come from. If you are long term contractor, you are 1 step away from being the first cut in the budget
If you think that you're going to be 100% utilized, you are saying that not only do you have no uncertainty as to where your next engagement is going to be, but also that your clients have no uncertainty as to their schedules, and none of their engagements are every going to slip, change scope, or get cancelled.
We might be having an issue with the definition of the word consultant here or the Dutch market might just be different.
My contracts generally always come in 3 month stretches. In case I haven't received a signed 3-month extension 1 month before the end of a contract I would start looking for my next engagement.
I also make sure I always take calls from recruiters and let them know when my current contract is up for renewal, so that every three months all recruiters I know will call me asking if I'm already available.
I generally also have a decent number of ex-colleagues already lined up which would be interested in hiring me if I were to become available again.
Now of course I don't get 100% utilization, but in practice my holidays and illnesses have had a much bigger impact on that than availability of engagements has.
A 3 month contract is a huge engagement for us (but then, our bill rates are much higher than the one mentioned in this thread). So, yes, I think we're talking about two different concepts of contracting/consulting/freelancing. You're doing staff augmentation, we're doing consulting/freelancing.
We probably both agree that freelancing is a way to make more money than you would on a steady salaried job. But it also comes with markedly increased risk, which is why it pays more.
I was expecting you to tell me to raise my rates, since after reading my comment it seemed that what I was describing is what you'd expect to happen to an underpriced commodity with limited availability.
I agree with seeing freelancing as a way to avoid paying a third party for doing sales (marketing & negotiation) and finances (bookkeeping & buffering) for you. In many cases and for many people it's also better to outsource those tasks to your employer.
P.S. Do you think you would have trouble staying 100% utilized if you were charging $100/hr as originally mentioned?
Probably not, but since they bill "much higher" than that and get 80% utilization, they would probably be leaving loads of money on the table. I'd see 300% utilization for $10/hr as well.
