4 ms·
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
by 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 agoThe 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 agoMany 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 agoTake 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 agoAlso bonuses. They can easily be salary in London.