4 ms·

The contracting market is kind of odd though - people somehow find the money to pay people two to four times as much as their regular employees, on long time co

The contracting market is kind of odd though - people somehow find the money to pay people two to four times as much as their regular employees, on long time contracts, partly because they are not paying enough to get good people as employees. Its broken HR.

Nursie 12y ago
Yup. It is weird. One of the factors is that you have no hidden costs (NI, pensions etc) with a contractor. Another is that you can get rid of them whenever you like, in theory. A third one I've heard is that you can keep your company/department's official headcount low this way, which is sometimes good for accounting purposes for some reason, while you actually get to have more people. But yeah, it is weird.
- bshimmin 12y ago
  You also don't have to pay for their holidays, and often not for their equipment (IR35 even suggests that contractors should use their own computers, in fact), for their attendance at company events, expenses (in some cases), etc. In theory a contractor should be able to hit the ground running with no training required, too. Obviously in the harsh bitterness of reality that's often not the case...
  - justincormack 12y ago
    None of those factors make up the difference, which is usually around a factor of 3. Computers are cheap, you need to pay travel expenses if you send them anywhere, NI is not a huge cost... and in the UK laying people off is not actually that hard. I actually think it is an accidental steady state, because there is such a huge gap, the good people shift to freelance fast, and lots of not so good people do, and the only people left in the low paying permanent jobs are disgruntled and underpaid.
    - bshimmin 12y ago
      I'll give you a factor of two - three seems a bit much to me. (Perhaps we're not quite talking about the same thing though, I'm not sure.) I'm surprised you would say that laying off people in the UK is "not actually that hard", though - in my experience, at companies where the HR department actually insist that matters are handled correctly, it can be an extremely onerous and lengthy process, fraught with difficulties and complexities (like "constructive dismissal") at every turn. Firing contractors is easy - ask them not to come back in. If their contract stipulates some sort of notice period (rarely more than a fortnight), pay them not to come in for the remainder of it.

Nursie 12y ago

Yup. It is weird. One of the factors is that you have no hidden costs (NI, pensions etc) with a contractor. Another is that you can get rid of them whenever you like, in theory. A third one I've heard is that you can keep your company/department's official headcount low this way, which is sometimes good for accounting purposes for some reason, while you actually get to have more people. But yeah, it is weird.

bshimmin 12y ago
You also don't have to pay for their holidays, and often not for their equipment (IR35 even suggests that contractors should use their own computers, in fact), for their attendance at company events, expenses (in some cases), etc. In theory a contractor should be able to hit the ground running with no training required, too. Obviously in the harsh bitterness of reality that's often not the case...
- justincormack 12y ago
  None of those factors make up the difference, which is usually around a factor of 3. Computers are cheap, you need to pay travel expenses if you send them anywhere, NI is not a huge cost... and in the UK laying people off is not actually that hard. I actually think it is an accidental steady state, because there is such a huge gap, the good people shift to freelance fast, and lots of not so good people do, and the only people left in the low paying permanent jobs are disgruntled and underpaid.
  - bshimmin 12y ago
    I'll give you a factor of two - three seems a bit much to me. (Perhaps we're not quite talking about the same thing though, I'm not sure.) I'm surprised you would say that laying off people in the UK is "not actually that hard", though - in my experience, at companies where the HR department actually insist that matters are handled correctly, it can be an extremely onerous and lengthy process, fraught with difficulties and complexities (like "constructive dismissal") at every turn. Firing contractors is easy - ask them not to come back in. If their contract stipulates some sort of notice period (rarely more than a fortnight), pay them not to come in for the remainder of it.