7 ms·

Worked at an MSP. Company charged $165 an hour for my work. I was being paid $16 an hour. This is sysadmin/IT Infrastructure work.

nmfisher 6y ago
I'm not defending consultancies here - working at one would be my own personal hell on earth. But when charge-out rates are so much higher than salaries, this is because their value is in the customer relationships and sales pipeline, not technical competence. It's far, far easier to replace technical talent than to replace customers.
- DangitBobby 6y ago
  Just because you can make exorbitant profits off of your workers doesn't mean you necessarily should. I'll never understand why someone would you want to own a company that treats its people like shit and sucks to work for.
  - ImaCake 6y ago
    Middle management can run distraction on the owners so that they don't see the misery of the operations people who actually keep the buisness going.
    - ardy42 6y ago
      >> Just because you can make exorbitant profits off of your workers doesn't mean you necessarily should. I'll never understand why someone would you want to own a company that treats its people like shit and sucks to work for. > Middle management can run distraction on the owners so that they don't see the misery of the operations people who actually keep the buisness going. More likely, the owner is greedy and just doesn't care about how miserable the employees are as long as the cash keeps coming in. Some people just plain lack the regular moral compass and feelings of empathy, and others have gotten good at holding on to BS justifications to assuage any guilt they feel.
    - thisisnico 6y ago
      Ownership was fully aware and encouraged.
  - Aeolun 6y ago
    Why would they care? They’re running a company, not a charity. Of course I don’t necessarily see it like that, but I can see how people would. Especially if they’re already competitive.
    - hetspookjee 6y ago
      Why not necessarily on topic, I do wonder when this ruthless mindset will become viewed as a negative. Currently its perfectly normal to defend your dislikeable choices as business choices; because we are running a business. I've had a couple ideas in the past for businesses that I always openly share with others in the nearest detail hoping someone would pick it up, with the thought that I don't wanna make money of it, I just want to have that product or service, simply because it's not there yet. I'm sure this mindset exists but I am unsure what a formal term might be. Utilitarian comes to mind but not quite.
      - p_l 6y ago
        It was seen as a negative hundreds of years ago, with the idea that workers aren't charities for their bosses. But you need to actually have strong negotiating positions for workers in the first place :/
- thisisnico 6y ago
  This was the attitude 100%. Especially in Tech consulting, sales is everything, absolutely everything.
  - dlhavema 6y ago
    And sales commissions can be crazy high too. They are not just paying the IT people.. admins, HR, etc all need to get paid too.. not trying to defend crazy high rates...
singlow 6y ago
This is a very skewed view of billing and profit. I have worked at consulting agencies as an engineer most of my career, in management for a few years, and have seen the numbers. There are quite a few overhead considerations you need to take into account. Just in payroll, a $16/hr employee is a lot more expensive than that number. Closer to $30-$50/hr with taxes, healthcare, and other per-person costs. Then add office space, equipment, sales and marketing cost, management, HR. Some management hours are billable but not most. Then consider that most employees don't bill 100% of hours. If we paid an employee for 40 hours, I would be impressed if the billable hours were more than 35 on a good week. (We did not bill for stand-ups, breaks, and other events that were not directly project-related.) Additionally consider the risk factor, that some clients end up not paying for one reason or another, or we comp time due to mistakes, going over budget, etc. We still pay the employee.

nmfisher 6y ago

I'm not defending consultancies here - working at one would be my own personal hell on earth. But when charge-out rates are so much higher than salaries, this is because their value is in the customer relationships and sales pipeline, not technical competence. It's far, far easier to replace technical talent than to replace customers.

DangitBobby 6y ago
Just because you can make exorbitant profits off of your workers doesn't mean you necessarily should. I'll never understand why someone would you want to own a company that treats its people like shit and sucks to work for.
- ImaCake 6y ago
  Middle management can run distraction on the owners so that they don't see the misery of the operations people who actually keep the buisness going.
  - ardy42 6y ago
    >> Just because you can make exorbitant profits off of your workers doesn't mean you necessarily should. I'll never understand why someone would you want to own a company that treats its people like shit and sucks to work for. > Middle management can run distraction on the owners so that they don't see the misery of the operations people who actually keep the buisness going. More likely, the owner is greedy and just doesn't care about how miserable the employees are as long as the cash keeps coming in. Some people just plain lack the regular moral compass and feelings of empathy, and others have gotten good at holding on to BS justifications to assuage any guilt they feel.
  - thisisnico 6y ago
    Ownership was fully aware and encouraged.
- Aeolun 6y ago
  Why would they care? They’re running a company, not a charity. Of course I don’t necessarily see it like that, but I can see how people would. Especially if they’re already competitive.
  - hetspookjee 6y ago
    Why not necessarily on topic, I do wonder when this ruthless mindset will become viewed as a negative. Currently its perfectly normal to defend your dislikeable choices as business choices; because we are running a business. I've had a couple ideas in the past for businesses that I always openly share with others in the nearest detail hoping someone would pick it up, with the thought that I don't wanna make money of it, I just want to have that product or service, simply because it's not there yet. I'm sure this mindset exists but I am unsure what a formal term might be. Utilitarian comes to mind but not quite.
    - p_l 6y ago
      It was seen as a negative hundreds of years ago, with the idea that workers aren't charities for their bosses. But you need to actually have strong negotiating positions for workers in the first place :/
thisisnico 6y ago
This was the attitude 100%. Especially in Tech consulting, sales is everything, absolutely everything.
- dlhavema 6y ago
  And sales commissions can be crazy high too. They are not just paying the IT people.. admins, HR, etc all need to get paid too.. not trying to defend crazy high rates...

singlow 6y ago

This is a very skewed view of billing and profit. I have worked at consulting agencies as an engineer most of my career, in management for a few years, and have seen the numbers. There are quite a few overhead considerations you need to take into account. Just in payroll, a $16/hr employee is a lot more expensive than that number. Closer to $30-$50/hr with taxes, healthcare, and other per-person costs. Then add office space, equipment, sales and marketing cost, management, HR. Some management hours are billable but not most. Then consider that most employees don't bill 100% of hours. If we paid an employee for 40 hours, I would be impressed if the billable hours were more than 35 on a good week. (We did not bill for stand-ups, breaks, and other events that were not directly project-related.) Additionally consider the risk factor, that some clients end up not paying for one reason or another, or we comp time due to mistakes, going over budget, etc. We still pay the employee.