3 ms·

I only know London, but senior people get more than £50k. It is slightly confused by finance, which pays much more, and people who contract - lots of companies

I only know London, but senior people get more than £50k. It is slightly confused by finance, which pays much more, and people who contract - lots of companies pay little for permanent staff but pay £500 a day for long term contractors, which makes no sense, as if they upped their permanent rates they could hire good people instead.

twic 12y ago
This is for established companies rather than startups, right? My experience here has been the same - as a good developer with several years experience, it wasn't hard finding offers at 65k from big tech firms (plus substantial but slow-vesting stock in one case). I spoke to a couple of startups, and they didn't want to pay that much, but I would guess that they could have done 55k. If I went contracting, I think I'd be looking for 550-600 a day.
nvarsj 12y ago
It makes some sense. Overhead of a permanent employee in UK is pretty high. I've heard estimates as high as 50% of base salary, maybe more. On top of that are the usual perks, 3 months notice, and an onerous process to get you fired. Once permie, you're basically guaranteed employment unless your company goes broke. Compare that to the contractor. There is virtually no overhead for the company. They claim VAT, and expense your rate. And it's very easy to get rid of you, or hire you. A company can ramp up and ramp down as the need arises for new projects - which has a lot of appeal. It's interesting for me coming from the U.S.. I think it's largely a result of the regulation. An at-will permanent employee system, like in the US, seems to benefit in-demand professions a lot more than the UK/EU regulated system.
- justincormack 12y ago
  The 50% is not direct per staff costs, it includes all overheads like office space. Direct costs are more like 15%. Almost all contracts are 1 month notice. Getting rid of people is not hard, have been through the process a few times, you just need to know what to do.
- ionwake 12y ago
  . An at-will permanent employee system Hi can you explain what you mean - great post but dont quite understand your last paragraph...
  - sentrote 12y ago
    Many Americans have almost no job security, you can be sacked at any time without a reason. I'm only aware of it through HN etc; so I'll just point you to Wikipedia: http://en.wikipedia.org/wiki/At-will_employment http://en.wikipedia.org/wiki/At-will_employment
- walshemj 12y ago
  Take it from me in the UK It's not hard to fire some one "for cause" don't believe all you read in the Daily Mail. And the NHS helps flexibility as there is no down side to working for a start up if you or your family have health issues. IR 35 really hit contractors hard in the It industry so you cant do most IT contracts as a personal company - you have to go for an Umbrella company
- illumen 12y ago
  Also bonuses. They can easily be salary in London.
laurencerowe 12y ago
There are several reasons contracting is a popular route in the UK for techies: 1. Tax advantages, the 13.8% employer's payroll tax is avoided by be being employed as a contractor and taking your income as a dividend. 2. Tech career ladders are pretty specific to the tech industry and London just doesn't have the medium and large tech companies you see in Silicon Valley. So you hit the ceiling pretty fast and in order to be valued for your skills you pretty much have to become a contractor. This is not so different to working in tech in a non-tech organisation in the US. 3. The National Health Service means you and your family are not reliant on your employer for health insurance. Individual health insurance is super expensive in the USA. Most people I know who contract in the US have health insurance through their spouse's employer. I ended up moving to CA because of the career opportunities. I'd probably be better off contracting in the finance world in London, but most of that work just isn't very interesting.

twic 12y ago

This is for established companies rather than startups, right? My experience here has been the same - as a good developer with several years experience, it wasn't hard finding offers at 65k from big tech firms (plus substantial but slow-vesting stock in one case). I spoke to a couple of startups, and they didn't want to pay that much, but I would guess that they could have done 55k. If I went contracting, I think I'd be looking for 550-600 a day.

nvarsj 12y ago

It makes some sense. Overhead of a permanent employee in UK is pretty high. I've heard estimates as high as 50% of base salary, maybe more. On top of that are the usual perks, 3 months notice, and an onerous process to get you fired. Once permie, you're basically guaranteed employment unless your company goes broke. Compare that to the contractor. There is virtually no overhead for the company. They claim VAT, and expense your rate. And it's very easy to get rid of you, or hire you. A company can ramp up and ramp down as the need arises for new projects - which has a lot of appeal. It's interesting for me coming from the U.S.. I think it's largely a result of the regulation. An at-will permanent employee system, like in the US, seems to benefit in-demand professions a lot more than the UK/EU regulated system.

justincormack 12y ago
The 50% is not direct per staff costs, it includes all overheads like office space. Direct costs are more like 15%. Almost all contracts are 1 month notice. Getting rid of people is not hard, have been through the process a few times, you just need to know what to do.
ionwake 12y ago
. An at-will permanent employee system Hi can you explain what you mean - great post but dont quite understand your last paragraph...
- sentrote 12y ago
  Many Americans have almost no job security, you can be sacked at any time without a reason. I'm only aware of it through HN etc; so I'll just point you to Wikipedia: http://en.wikipedia.org/wiki/At-will_employment http://en.wikipedia.org/wiki/At-will_employment
walshemj 12y ago
Take it from me in the UK It's not hard to fire some one "for cause" don't believe all you read in the Daily Mail. And the NHS helps flexibility as there is no down side to working for a start up if you or your family have health issues. IR 35 really hit contractors hard in the It industry so you cant do most IT contracts as a personal company - you have to go for an Umbrella company
illumen 12y ago
Also bonuses. They can easily be salary in London.

laurencerowe 12y ago

There are several reasons contracting is a popular route in the UK for techies: 1. Tax advantages, the 13.8% employer's payroll tax is avoided by be being employed as a contractor and taking your income as a dividend. 2. Tech career ladders are pretty specific to the tech industry and London just doesn't have the medium and large tech companies you see in Silicon Valley. So you hit the ceiling pretty fast and in order to be valued for your skills you pretty much have to become a contractor. This is not so different to working in tech in a non-tech organisation in the US. 3. The National Health Service means you and your family are not reliant on your employer for health insurance. Individual health insurance is super expensive in the USA. Most people I know who contract in the US have health insurance through their spouse's employer. I ended up moving to CA because of the career opportunities. I'd probably be better off contracting in the finance world in London, but most of that work just isn't very interesting.