more crackdowns on contractors expected

Soldato
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Same here. I have always seen the need for the use of contractors in the various companies I have worked in but its always puzzled me why the rates are so high. When I have asked, I've always been told that's the market rate for somebody with those skills. Which is may be but all that says to me is that all these employers underpay their own permanent staff with the same skills.

I'm not trying to justify what some companies pay because I don't know what other companies pay, so I can only talk from my experience. The company I contract for worked out the rolled up cost of employing a permanent member of staff so they can cost up projects for tendering etc.

The rolled up cost per hour for a permanent member of staff was not that far off to a contractor despite the headline figures which most people seem fixated on. Obviously things will change from company to company depending on their policy.
 
Associate
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I'm not trying to justify what some companies pay because I don't know what other companies pay, so I can only talk from my experience. The company I contract for worked out the rolled up cost of employing a permanent member of staff so they can cost up projects for tendering etc.

The rolled up cost per hour for a permanent member of staff was not that far off to a contractor despite the headline figures which most people seem fixated on. Obviously things will change from company to company depending on their policy.

In my experience, this is about right. A simple rule of thumb I've seen is it costs about 2x the annual salary of an employee to actually employ them.
 
Soldato
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Yup, same here, contractors are a bit more expensive than permanent staff, but not by a lot.

Employers NI, holiday pay, sick pay, in-work benefits, pensions, share options, equipment, training allowances etc.. It all adds up.
 
Associate
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Contracting for me made sense because of my four previous permanent jobs I've never worked anywhere that offered any benefits.

I've never had a pension contribution from a company, never had health care, never had free food, never got free / subsides gym membership, never been on paid training, all I've ever had was paid holidays (minimum) and sick pay (very rarely used)

The North is full of SME types that offer little to no benefits and rock bottom salaries to staff. There is no job security being permanent either, I've been made redundant once in a staff reduction with a months notice and once when the company went bust with a weeks notice!

The alternative, live away and travel to contracts is my only choice if I want a reasonable wage and the ability to control my own work life. If there were more big employers in the North with lovely benefits I might think differently
 
Permabanned
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Benefits are way over rated. I moved to a new perm role with a list of benefits and it's nothing special. Most of them are merely a small percentage discount and not fully included or come with limits that make it worthless. Only things I got out of 10 on the list was private healthcare and life in death cover. Both could easily be taken out if contracting. The rest I don't use or they do not apply. I am going to move in to contracting within a few years and hopefully earn 20k extra per year.
 

alx

alx

Soldato
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Yup, same here, contractors are a bit more expensive than permanent staff, but not by a lot.

Employers NI, holiday pay, sick pay, in-work benefits, pensions, share options, equipment, training allowances etc.. It all adds up.

There's also more 'resources' required for permanent staff, e.g. things like organising annual performance reviews, training etc and the extra admin required for pension schemes, share schemes, bonuses etc.
If you had a purely contract based workforce I imagine there would be far less admin required. They turn up for work, you pay them a day rate - job done.
 
Caporegime
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In my experience, this is about right. A simple rule of thumb I've seen is it costs about 2x the annual salary of an employee to actually employ them.

That's ludicrous. One of the biggest companies in the world uses 40-50% max as the total long term cost of employment including redundancy, pensions, HR etc.
 
Soldato
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I know what you are saying, but as a for instance, in my example I live in Bucks and work in Scotland. Who in their right mind would work like that on a fixed term contract on permie wages for your minimum of 6 months?
You've made clear that they're not paying enough to attract someone to the permanent role, clearly they should be paying more and have a permanent employee. You are a terrible example of a contractor (not individually, but your situation) the time you've been employed at a significantly higher rate + expenses they should have increased the budget for recruiting a permanent employee. If you pay enough people will come, getting someone from the other end of the country is a crap reason to get a contractor in (unless it's short term obviously)
 
Soldato
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You've made clear that they're not paying enough to attract someone to the permanent role, clearly they should be paying more and have a permanent employee. You are a terrible example of a contractor (not individually, but your situation) the time you've been employed at a significantly higher rate + expenses they should have increased the budget for recruiting a permanent employee. If you pay enough people will come, getting someone from the other end of the country is a crap reason to get a contractor in (unless it's short term obviously)

It is a rediculous situation I admit but the job has a rather specific set of requirements, firstly the job requires a senior/principal RF and microwave engineer and there aren't a huge amount of them. Secondly you have to be a UK national and you have to be able to get SC clearance and lastly be willing to move to Scotland.

None of them are a big deal in isolation but it would seem the combination of it all is a problem.
 
Soldato
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It is a rediculous situation I admit but the job has a rather specific set of requirements, firstly the job requires a senior/principal RF and microwave engineer and there aren't a huge amount of them. Secondly you have to be a UK national and you have to be able to get SC clearance and lastly be willing to move to Scotland.

None of them are a big deal in isolation but it would seem the combination of it all is a problem.
It's understandable that they've got a contractor to fill the gap until they can recruit a perm, it's ridiculous that they've not recruited one yet.
 
Soldato
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It's understandable that they've got a contractor to fill the gap until they can recruit a perm, it's ridiculous that they've not recruited one yet.

Well if you are an RF and microwave engineer or and FPGA engineer then there are jobs waiting to be filled.

I guess it's part of a bigger problem of there being an engineering skills shortage in the UK hence the drive to encourage women into engineering.
 
Caporegime
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there are plenty of areas with skills shortages - whether people work on a perm of contractor basis isn't going to change the fact there are skills shortages
 
Soldato
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there are plenty of areas with skills shortages - whether people work on a perm of contractor basis isn't going to change the fact there are skills shortages

I wasn't aware I said it did. I said it was the reason for the drive to encourage women into engineering i.e. tap into 50% of the population that don't normally consider engineering as a career path.
 
Associate
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It's understandable that they've got a contractor to fill the gap until they can recruit a perm, it's ridiculous that they've not recruited one yet.

I'm fairly sure Bear works in the same place I do (but I'm a perm).

We have a really big problem in getting experienced folk in for RF engineering because there simply aren't that many of them. Salaries down south are probably better, but there used to be a much bigger pool of skills around here that has evaporated. FPGA engineers are a similar problem, but then we also have to compete with banks and IP houses for them which you can't do on customer rates. The nationality/SC issue is becoming more and more of a problem - there are a lot of talented folk from Europe that we just can't employ.

I think we are doing pretty well now at bringing in and developing grads, but we need senior and above grades to supervise them (and who have the right skillset for that). That's where the problem lies.

I've just filled in a contractor extension and it is all about specific work packages and how long they last etc - IR35 is well heeded. We also don't (intentionally) use contractors for the supervision of others because that's a perm job.

As Bear says, the experienced perms are part of a small national pool which has largely left Scotland and then you add in all the other requirements and it gets harder to do.
 
Caporegime
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I'm fairly sure Bear works in the same place I do (but I'm a perm).

We have a really big problem in getting experienced folk in for RF engineering because there simply aren't that many of them. Salaries down south are probably better, but there used to be a much bigger pool of skills around here that has evaporated. FPGA engineers are a similar problem, but then we also have to compete with banks and IP houses for them which you can't do on customer rates. The nationality/SC issue is becoming more and more of a problem - there are a lot of talented folk from Europe that we just can't employ.

I think we are doing pretty well now at bringing in and developing grads, but we need senior and above grades to supervise them (and who have the right skillset for that). That's where the problem lies.

I've just filled in a contractor extension and it is all about specific work packages and how long they last etc - IR35 is well heeded. We also don't (intentionally) use contractors for the supervision of others because that's a perm job.

As Bear says, the experienced perms are part of a small national pool which has largely left Scotland and then you add in all the other requirements and it gets harder to do.

But isnt the issue that Bear says that with the salary offered and location, you can't recruit a permie and he wouldn't travel/relocate for that money yet the same company is prepared to pay double/triple for a contractor to do that job for 6/7 years because they can't get a permie to which Bear is perfectly happy to travel each week?

Surely the solution is to pay the rate needed to recruit a permie?????
 

SPG

SPG

Soldato
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6 or 7 years is nothing. It would take a permie 2 years to fully move maybe, find a house, sell a old house, move the wife, get the kids out of school etc, 2 years work then he has to up sticks again.

Contractors keep engineering going in the UK now, simply down to lack of government incentives and thought of getting people into engineering. Until this changes long may we continue charging what the hell we like :)
 
Soldato
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Caporegime
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Contractors keep engineering going in the UK now, simply down to lack of government incentives and thought of getting people into engineering. Until this changes long may we continue charging what the hell we like :)
You can charge whatever the hell you like as far as I'm concerned, just write less off against tax :).

I guess it's part of a bigger problem of there being an engineering skills shortage in the UK hence the drive to encourage women into engineering.
Is the drive at women specifically not to redress the perceived gender pay gap? Rather than shortage of skills?
 
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