6 ms·

Based on my own experience as both an employee (~10 years) and consultant (~5 years) in The Netherlands, I'd say in The Netherlands generally the more experienc

by wsc981 5y ago

Based on my own experience as both an employee (~10 years) and consultant (~5 years) in The Netherlands, I'd say in The Netherlands generally the more experienced, more skilled workers tend to go into consulting. Most consultants I worked with did deliver better results and seemed to be slacking less. I attribute this to the following with regards to work culture in The Netherlands: - developers mostly interested in job security or promoting into higher roles within a company stay employees - developers who feel that as an employee they are underpaid with regards to their skills and abilities, these developers tend to move into consulting as it gives them more control over their income, since as a consultant they choose their own rates - these kinds of developers are likely not interested into management roles as well (or they might opt into consulting as PM, SCRUM master perhaps)

jb1991 5y ago
From what I can tell, consulting rates in the Netherlands are significantly higher indeed compared to employees. At least 50% more on average.
- inediblePotato 5y ago
  Freelance consultant in NL here. The consulting-firm rates can be much higher, but usually freelance consulting is much cheaper than employees. One of the reasons I went into this is I was working in both academia and in companies at the level where I was hiring for projects, and the ridiculous money that just gets eaten by overhead and middle management is absurd. If you hire a PhD and pay them close to ~40keur/year (NL is comparatively higher salaries for PhD than other places), you need about ~100k per year for that person. University bench fees, or corporate overhead, computing resources, insurance, pension. If you go up from PhD for 1 FTE senior engineer in a company it gets worse, they get ~60k before income tax, it costs closer to ~200k for 1 FTE (this is a real recent example for a project I am involved in). On top of that you need to give them a contract, so if you hire a lemon (which will happen at some point), you are stuck with them at least for a year. For me, and I think for some experienced project leaders, it makes much more sense to hire someone as a contractor per month, if they keep delivering, then keep them, if not, don't. If you keep them, maybe you pay 80k for the year. Another aspect is that the cost of a external person is just a cost, like buying computing resources/equipment for a project, it can be easier/simpler to factor into a project (as its not a continuing cost commitment) and depending on the arrangement, can be deducted from the companies VAT. Freelance consultants do their own admin, handle their own expenses, work from home (though so does everyone at the moment) so the hiring company just pays directly for results. To a new manager/project leader, prospectively, it can seem like a higher cost up front but that's only if you compare 80k to 40k which isn't fair or what you will see when you look retrospectively at the project cost. Consulting firms lose most of this benefit because they still have all those extra costs/commitments involved. Business is strange.
  - mettamage 5y ago
    Can I ask you some questions about being a freelance consultant in NL? I'm a Dutchie myself. If you're up for having an online chat or IRL coffee [1] my email is in my profile. [1] I live in the Amsterdam area.
    - DonHopkins 5y ago
      I've been to a few of these "Hackers and Founders" meetups in Amsterdam before Coronavirus hit, and ran into interesting people who know about stuff like that. I love their strict anti-douchebag policy! Café De Doffer or the Hacker Building might be a good place to meet up, once that kind of stuff is happening again. But I don't know when that might be. https://hackersandfounders.nl/ https://hackersandfounders.nl/ https://hackerbuilding.nl/ https://hackerbuilding.nl/ >We were originally a group of friends who co-worked from different places across the city. We dreamt about getting our very own building so we could create our perfect work environment of likeminded people. So when the moment was right, we made that happen. >Our group is pretty tight-knit but very welcoming to newcomers too. We have a strict anti-douchebag policy, which means we only have friendly people here who are open and welcoming.
    - inediblePotato 5y ago
      Sounds good. Sent you a mail
  - Aeolun 5y ago
    > they get ~60k before income tax, it costs closer to ~200k for 1 FTE (this is a real recent example for a project I am involved in) That’s a pretty ridiculous overhead percentage. Even given all the taxes in the Netherlands, I have no idea how you could possibly arrive at that (given legally mandated stuff, obviously you can make it as crazy as you want).
    - inediblePotato 5y ago
      Absolutely ridiculous indeed. That example is from a month ago for a medium-sized, research-oriented child company of a much larger tech company. They get a lot of funding from grants and collaborations so one could argue it as a way of funneling money from grants back into the larger company's pocket. I have been trying to find/join/create a organization or group structure for research that would be more open/fair and less susceptible to corruption/waste but it's not visible enough of a problem to get support for it, and too new or odd sounding to get granting body to take a gamble on it. A non-profit with everyone's salary visible, who work on delayed-release but open-source projects, seems like a good start to me, after all most of the research grant money is public money, it should be visible where it's being spent. Bounties for researchers/the pubic to fix active bugs. And a mandate that the code (or other work) gets released after ~2years no matter what. Commercially-paid early access and support. Harder to make a business around for sure but the amount of projects I have worked on, that don't get released as they are not profitable or the company/university are too lazy to make a profitable license/product around and refuse to just release the IP. I had one project that was patented and then the company is just sitting on it (for almost 10years now) waiting for a competitor to release something similar so they can seek licensing from them. It's heart breaking seeing all that work/energy/money just get locked up in a private gitlab repo to die when some of it can literally save lives or kick a field into the next step.
- WelcomeShorty 5y ago
  Did both and consulting rates are indeed higher at face value but that is compensated by the risk. As an employee you will be paid if there is actual work or not, me as a consultant will be terminated the minute my work is done. So if you are good in a field where there is demand, and you actually like doing negotiations & finding opportunities, doing your own bookkeeping and not forgetting your pension funds: go for it!
strangetortoise 5y ago
Just to be clear, you're talking about freelance consulting in NL, correct? I can believe that. Based on my conversations with peers, the big consulting firms seem to be the exact opposite however: - Spending endless time on useless reports. - Technically ancient development practices. - Delivering "courses" or workshops to clients on topics they only themselves learned about 2 weeks earlier. - Extremely low starting salaries, with long working hours, and a ladder culture that's been described to me as very corps-like (dutch name for fraternities). As a relatively fresh FTE, the "big consulting shops" have given me the strong impression that it is where technical prowess goes to die.
- wsc981 5y ago
  Yes I meant freelance consulting. People working at big consulting firms are just employees.
  - dataflow 5y ago
    Employee vs. consultant aren't mutually exclusive right? Were you thinking of employee vs. contractor?
    - DonHopkins 5y ago
      Employee and contractor/consultant/freelancer aren't necessarily mutually exclusive -- they can be "layered". There are "management" companies that will employ you full time, and draw up contracts with other clients, who pay them directly, then they take a cut of their fees, withhold income tax, and pay you the rest. But they don't find clients for you, and it's nothing like working for a "big consulting company" (i.e. outsourcing shop): it's up to you to find the clients, and to agree with them on the work and the rate. Of course you need to have an agreeable client(s) before they will hire you: they won't help you look for work, and don't interact with your clients beyond drawing up contracts, sending them invoices, and taking their money. I've worked as a full time employee of the Dutch branches of a couple of international "payroll management" companies (Segment BV and TCP Solutions), in order to qualify for the Dutch "30% Ruling" for highly skilled migrants (which makes 30% of your gross income tax free, which is game changing especially in the higher brackets, and it has other benefits, which more than offset the management company's fees). 30% tax ruling in the Netherlands. Get to know the benefits of the 30% reimbursement ruling for highly skilled migrants and see if the tax advantage applies to you: https://www.iamsterdam.com/en/living/take-care-of-official-matters/highly-skilled-migrants/thirty-percent-ruling https://www.iamsterdam.com/en/living/take-care-of-official-m... >Are you eligible to apply for the 30% tax ruling? >The most important factors are: >The employee has to transfer or be recruited from abroad by a Dutch employer; >The employer and employee have to agree in writing that the 30% ruling is applicable; >The employee should have skills or expertise that is scarce in the Dutch job market; >The employee must meet a salary threshold (this is indexed annually). >Read more in-depth information about the 30% ruling, discover more benefits of the ruling, and find out whether you are eligible. https://www.iamsterdam.com/en/living/take-care-of-official-matters/highly-skilled-migrants/thirty-percent-ruling/30-percent-ruling-indepth https://www.iamsterdam.com/en/living/take-care-of-official-m... Segment BV: https://www.segmentbv.nl/ https://www.segmentbv.nl/ TCP Solutions: https://tcpsolutions.com/nl/ https://tcpsolutions.com/nl/ TCP Solutions bills themselves as doing payroll services, HR services, fast payout and pre-financing, and recruiting and working abroad, and they help out with compliance with Dutch laws, taxes, and regulations. I initially applied for a full time job at TomTom in Amsterdam, but since it's hard to fire of somebody with a full time contract in the Netherlands, they first hired me as a consultant through Segment BV for a three month trial period, to see if I was a good fit. After the trial period went well and they were happy with my work (which gave me a lot of leverage), they made me a decent offer for a full time employment contract, including relocation and hiring bonus and a good salary. Although the full time salary TomTom offered was great for the Netherlands, it was actually less than the net amount I was being paid through the management company as a consultant. However TomTom's relocation and hiring bonus and full time benefits and stability made up for that, something a management company doesn't give you. The key role the management company served was to hire me full time as an employee of their Dutch company, which qualified me for the 30% ruling (successfully applying for which requires some specialized governmental bureaucratic expertise that TomTom wasn't good at), so Segment BV handled applying for the 30% ruling, my residence permit, did my taxes, and other stuff like that. TomTom paid them directly, they took their fee from that, and payed me the rest. When TomTom finally hired me, the 30% ruling was smoothly transferred from Segment to TomTom, with their help. But then I left TomTom after a while, because I got an offer I couldn't refuse to work from home as a contractor for a US startup on an exciting project for more than TomTom was paying me, but I still wanted to stay in Amsterdam and benefit from the 30% ruling, so I still needed to be employed full time by a Dutch company. And I also wanted to work for another old client at the same time, who wanted me to work on some code I'd written for them years ago (and still am maintaining). So I found another management company in Amsterdam (TCP Solutions) like the one TomTom used to hire me, then they hired me and wrote up contracts with my new and old clients, transferred and handled the 30% ruling, and I worked directly for TCP as a full time salaried employee (and indirectly for several other clients) for many years, until the 30% ruling finally expired (after a decade, but it's shorter now). TCP Solutions required me to have one "main" client that payed me at least a certain amount of money regularly, and then I could have additional side contracts on top of that, so the salary varied over time depending on the number of contracts and the hours I worked. They did charge a hefty fee for drawing up each contract, though. But the 30% ruling made it worth it. There's nothing shady or sneaky about the arrangement -- just the opposite: they're a "compliance" service that makes sure I follow all the Dutch rules and regulations and pay my taxes. They operate in the sector of "organizational consultancy firms": https://drimble.nl/bedrijf/hilversum/6550436/segment-bv.html https://drimble.nl/bedrijf/hilversum/6550436/segment-bv.html >The activities of Segment BV (among others) take place in the sector: Organizational consultancy firms. The main category in the SBI subdivision that the Chamber of Commerce uses is: 'Consultancy, research and other specialist business services' and in this case is further subdivided into: 'Holdings (not financial), group services within own group and management advice', subcategory 'Consultancy in the field of management and business operations'. But at the point the 30% ruling expired after 10 years, I no longer needed to be employed full time by a Dutch company to qualify, so it made a lot more sense to start a Dutch Eenmanszaak (sole proprietorship) and actually work as a freelancer instead of a full time employee. Now I can deduct my business expenses, which I couldn't do as a full time employee, and I can draw up my own contracts, and have a lot more freedom and less overhead.

by wsc981 5y ago

jb1991 5y ago

From what I can tell, consulting rates in the Netherlands are significantly higher indeed compared to employees. At least 50% more on average.

inediblePotato 5y ago
Freelance consultant in NL here. The consulting-firm rates can be much higher, but usually freelance consulting is much cheaper than employees. One of the reasons I went into this is I was working in both academia and in companies at the level where I was hiring for projects, and the ridiculous money that just gets eaten by overhead and middle management is absurd. If you hire a PhD and pay them close to ~40keur/year (NL is comparatively higher salaries for PhD than other places), you need about ~100k per year for that person. University bench fees, or corporate overhead, computing resources, insurance, pension. If you go up from PhD for 1 FTE senior engineer in a company it gets worse, they get ~60k before income tax, it costs closer to ~200k for 1 FTE (this is a real recent example for a project I am involved in). On top of that you need to give them a contract, so if you hire a lemon (which will happen at some point), you are stuck with them at least for a year. For me, and I think for some experienced project leaders, it makes much more sense to hire someone as a contractor per month, if they keep delivering, then keep them, if not, don't. If you keep them, maybe you pay 80k for the year. Another aspect is that the cost of a external person is just a cost, like buying computing resources/equipment for a project, it can be easier/simpler to factor into a project (as its not a continuing cost commitment) and depending on the arrangement, can be deducted from the companies VAT. Freelance consultants do their own admin, handle their own expenses, work from home (though so does everyone at the moment) so the hiring company just pays directly for results. To a new manager/project leader, prospectively, it can seem like a higher cost up front but that's only if you compare 80k to 40k which isn't fair or what you will see when you look retrospectively at the project cost. Consulting firms lose most of this benefit because they still have all those extra costs/commitments involved. Business is strange.
- mettamage 5y ago
  Can I ask you some questions about being a freelance consultant in NL? I'm a Dutchie myself. If you're up for having an online chat or IRL coffee [1] my email is in my profile. [1] I live in the Amsterdam area.
  - DonHopkins 5y ago
    I've been to a few of these "Hackers and Founders" meetups in Amsterdam before Coronavirus hit, and ran into interesting people who know about stuff like that. I love their strict anti-douchebag policy! Café De Doffer or the Hacker Building might be a good place to meet up, once that kind of stuff is happening again. But I don't know when that might be. https://hackersandfounders.nl/ https://hackersandfounders.nl/ https://hackerbuilding.nl/ https://hackerbuilding.nl/ >We were originally a group of friends who co-worked from different places across the city. We dreamt about getting our very own building so we could create our perfect work environment of likeminded people. So when the moment was right, we made that happen. >Our group is pretty tight-knit but very welcoming to newcomers too. We have a strict anti-douchebag policy, which means we only have friendly people here who are open and welcoming.
  - inediblePotato 5y ago
    Sounds good. Sent you a mail
- Aeolun 5y ago
  > they get ~60k before income tax, it costs closer to ~200k for 1 FTE (this is a real recent example for a project I am involved in) That’s a pretty ridiculous overhead percentage. Even given all the taxes in the Netherlands, I have no idea how you could possibly arrive at that (given legally mandated stuff, obviously you can make it as crazy as you want).
  - inediblePotato 5y ago
    Absolutely ridiculous indeed. That example is from a month ago for a medium-sized, research-oriented child company of a much larger tech company. They get a lot of funding from grants and collaborations so one could argue it as a way of funneling money from grants back into the larger company's pocket. I have been trying to find/join/create a organization or group structure for research that would be more open/fair and less susceptible to corruption/waste but it's not visible enough of a problem to get support for it, and too new or odd sounding to get granting body to take a gamble on it. A non-profit with everyone's salary visible, who work on delayed-release but open-source projects, seems like a good start to me, after all most of the research grant money is public money, it should be visible where it's being spent. Bounties for researchers/the pubic to fix active bugs. And a mandate that the code (or other work) gets released after ~2years no matter what. Commercially-paid early access and support. Harder to make a business around for sure but the amount of projects I have worked on, that don't get released as they are not profitable or the company/university are too lazy to make a profitable license/product around and refuse to just release the IP. I had one project that was patented and then the company is just sitting on it (for almost 10years now) waiting for a competitor to release something similar so they can seek licensing from them. It's heart breaking seeing all that work/energy/money just get locked up in a private gitlab repo to die when some of it can literally save lives or kick a field into the next step.
WelcomeShorty 5y ago
Did both and consulting rates are indeed higher at face value but that is compensated by the risk. As an employee you will be paid if there is actual work or not, me as a consultant will be terminated the minute my work is done. So if you are good in a field where there is demand, and you actually like doing negotiations & finding opportunities, doing your own bookkeeping and not forgetting your pension funds: go for it!

strangetortoise 5y ago

Just to be clear, you're talking about freelance consulting in NL, correct? I can believe that. Based on my conversations with peers, the big consulting firms seem to be the exact opposite however: - Spending endless time on useless reports. - Technically ancient development practices. - Delivering "courses" or workshops to clients on topics they only themselves learned about 2 weeks earlier. - Extremely low starting salaries, with long working hours, and a ladder culture that's been described to me as very corps-like (dutch name for fraternities). As a relatively fresh FTE, the "big consulting shops" have given me the strong impression that it is where technical prowess goes to die.

wsc981 5y ago
Yes I meant freelance consulting. People working at big consulting firms are just employees.
- dataflow 5y ago
  Employee vs. consultant aren't mutually exclusive right? Were you thinking of employee vs. contractor?
  - DonHopkins 5y ago
    Employee and contractor/consultant/freelancer aren't necessarily mutually exclusive -- they can be "layered". There are "management" companies that will employ you full time, and draw up contracts with other clients, who pay them directly, then they take a cut of their fees, withhold income tax, and pay you the rest. But they don't find clients for you, and it's nothing like working for a "big consulting company" (i.e. outsourcing shop): it's up to you to find the clients, and to agree with them on the work and the rate. Of course you need to have an agreeable client(s) before they will hire you: they won't help you look for work, and don't interact with your clients beyond drawing up contracts, sending them invoices, and taking their money. I've worked as a full time employee of the Dutch branches of a couple of international "payroll management" companies (Segment BV and TCP Solutions), in order to qualify for the Dutch "30% Ruling" for highly skilled migrants (which makes 30% of your gross income tax free, which is game changing especially in the higher brackets, and it has other benefits, which more than offset the management company's fees). 30% tax ruling in the Netherlands. Get to know the benefits of the 30% reimbursement ruling for highly skilled migrants and see if the tax advantage applies to you: https://www.iamsterdam.com/en/living/take-care-of-official-matters/highly-skilled-migrants/thirty-percent-ruling https://www.iamsterdam.com/en/living/take-care-of-official-m... >Are you eligible to apply for the 30% tax ruling? >The most important factors are: >The employee has to transfer or be recruited from abroad by a Dutch employer; >The employer and employee have to agree in writing that the 30% ruling is applicable; >The employee should have skills or expertise that is scarce in the Dutch job market; >The employee must meet a salary threshold (this is indexed annually). >Read more in-depth information about the 30% ruling, discover more benefits of the ruling, and find out whether you are eligible. https://www.iamsterdam.com/en/living/take-care-of-official-matters/highly-skilled-migrants/thirty-percent-ruling/30-percent-ruling-indepth https://www.iamsterdam.com/en/living/take-care-of-official-m... Segment BV: https://www.segmentbv.nl/ https://www.segmentbv.nl/ TCP Solutions: https://tcpsolutions.com/nl/ https://tcpsolutions.com/nl/ TCP Solutions bills themselves as doing payroll services, HR services, fast payout and pre-financing, and recruiting and working abroad, and they help out with compliance with Dutch laws, taxes, and regulations. I initially applied for a full time job at TomTom in Amsterdam, but since it's hard to fire of somebody with a full time contract in the Netherlands, they first hired me as a consultant through Segment BV for a three month trial period, to see if I was a good fit. After the trial period went well and they were happy with my work (which gave me a lot of leverage), they made me a decent offer for a full time employment contract, including relocation and hiring bonus and a good salary. Although the full time salary TomTom offered was great for the Netherlands, it was actually less than the net amount I was being paid through the management company as a consultant. However TomTom's relocation and hiring bonus and full time benefits and stability made up for that, something a management company doesn't give you. The key role the management company served was to hire me full time as an employee of their Dutch company, which qualified me for the 30% ruling (successfully applying for which requires some specialized governmental bureaucratic expertise that TomTom wasn't good at), so Segment BV handled applying for the 30% ruling, my residence permit, did my taxes, and other stuff like that. TomTom paid them directly, they took their fee from that, and payed me the rest. When TomTom finally hired me, the 30% ruling was smoothly transferred from Segment to TomTom, with their help. But then I left TomTom after a while, because I got an offer I couldn't refuse to work from home as a contractor for a US startup on an exciting project for more than TomTom was paying me, but I still wanted to stay in Amsterdam and benefit from the 30% ruling, so I still needed to be employed full time by a Dutch company. And I also wanted to work for another old client at the same time, who wanted me to work on some code I'd written for them years ago (and still am maintaining). So I found another management company in Amsterdam (TCP Solutions) like the one TomTom used to hire me, then they hired me and wrote up contracts with my new and old clients, transferred and handled the 30% ruling, and I worked directly for TCP as a full time salaried employee (and indirectly for several other clients) for many years, until the 30% ruling finally expired (after a decade, but it's shorter now). TCP Solutions required me to have one "main" client that payed me at least a certain amount of money regularly, and then I could have additional side contracts on top of that, so the salary varied over time depending on the number of contracts and the hours I worked. They did charge a hefty fee for drawing up each contract, though. But the 30% ruling made it worth it. There's nothing shady or sneaky about the arrangement -- just the opposite: they're a "compliance" service that makes sure I follow all the Dutch rules and regulations and pay my taxes. They operate in the sector of "organizational consultancy firms": https://drimble.nl/bedrijf/hilversum/6550436/segment-bv.html https://drimble.nl/bedrijf/hilversum/6550436/segment-bv.html >The activities of Segment BV (among others) take place in the sector: Organizational consultancy firms. The main category in the SBI subdivision that the Chamber of Commerce uses is: 'Consultancy, research and other specialist business services' and in this case is further subdivided into: 'Holdings (not financial), group services within own group and management advice', subcategory 'Consultancy in the field of management and business operations'. But at the point the 30% ruling expired after 10 years, I no longer needed to be employed full time by a Dutch company to qualify, so it made a lot more sense to start a Dutch Eenmanszaak (sole proprietorship) and actually work as a freelancer instead of a full time employee. Now I can deduct my business expenses, which I couldn't do as a full time employee, and I can draw up my own contracts, and have a lot more freedom and less overhead.