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Contract To Hire 3

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CTekMedia

Programmer
Oct 5, 2001
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The tech worker’s contract to nowhere
Agencies that promote contract-to-hire positions put everyone else at a disadvantage

By Tom Yager
June 28, 2006 E-mail Printer Friendly Version


An ugly truth about the IT job market is that opportunists too often dominate it. Honest employers and job candidates suffer because they’re forced to compete with cutthroats. Black hat employers see workers through the lens of the recession -- as property to be loaded, spent, and replaced like rounds in a Gatling gun. Black hat workers see themselves through the lens of the dot-com heyday -- demigods who could write their own tickets with junior college skills.

Plus, there’s one group that capitalizes on supplying these jackasses with the means to live out their fantasies: employment agencies. I’m not damning all of them, just the boiler-room operations where staff changes faster than the seasons and where the brass ring is churning candidates through as many positions in as short a time as possible.

A greedy agency doesn’t work for employers. It works for itself. When the ideal worker who was born to work for you applies for the job you’ve listed, he or she becomes real estate. If the agency decides that your prospect would be more profitable to rent than to sell, you might never know the worker put in for your position. Renting doesn’t mean contracting; that’s honest business. It means contract-to-hire.

Never heard of it? Well, you’re missing out on the most wonderful thing since child labor. Agencies and employers use the contract-to-hire scam to pull in top-rung permanent workers with the promise that if they prove themselves worthy during the contract period -- it’s described as a sort of probation -- there’s a good chance they’ll be hired. That good chance is next to no chance, but a worker who isn’t wise to the scheme will sweat blood, volunteer unpaid overtime, and carry a company-issued cell phone to earn that upgrade to permanence.

A contract extension is held out as being one giant step closer to full employment. It’s actually a sure sign that there is no permanent position, but so what? The employer managed to sidestep having to renegotiate the contract because, ho-ho, a contract-to-hire doesn’t realize he or she is a temp. Benefits? Taxes? Paid overtime? Contract pay scale? That’s for chumps.

If you’re an employer who’s not in the contract-to-hire game, bless you, but it affects you just the same. The best, most excited, and most hopeful talent in the workforce is getting siphoned out of the permanent job market and re-used until they get wise or burn out. Workers who can’t be churned, either because they’re wise to the scheme or they’re just not that good, get sent out for permanent interviews, and there are many times more of the latter than the former. Any agency that operates or has close ties with body shops (contract brokers) has a direct conflict of interest that works against employers.

Good people and good employers are out there in more than satisfactory numbers. If employers want those good people, the surest way to get them is to list and interview for positions themselves. Workers searching for work already know direct listings are preferable. Specialized agencies with low turnover are well worth their higher fees, but they’re not common.

An employer who uses boiler-room agencies to look for help misses out on prime prospects, and can end up with the agency’s dregs: joyless workers who came your way only after being run once too often through the agency’s soak cycle. But then, if you use contract-to-hire, you get what you deserve.


Cheers,

Bluetone
 
Hmm??

Interesting except it doesn't point to any statistics - just a lot of negative about "contract to hire" in the most general, worst case-terms. Having been on both sides of contract to hire positions, I can tell you, it led to great opportunities and full-time work - if I wanted it.

On the flip side, I can't imagine why an employer would not contract to hire first. Talent is a difficult and costly acquisition. You should have the opportunity to "kick the tires" as it were.

Before I hear the hue and cry of unfair, I consult, so my work has been 100% merit based for more than 10 years. I like the idea of trying an employer out too. It is a fair trade.

Are there unscrupulous employers, contract/placement agencies, etc.? Are there lazy and unscrupulous employees? Yes on both accounts. My admonishment to anyone - in either role - excel at what you do. Develop a full-suite of hard skills, soft skills, and business acumen. Do that and you will be in good shape - whether contract to hire, hired as a FTE, or entering the consulting market full-time.


Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro
 
I agree, although it is good to be aware this is a potential (and growing?) problem.

Cheers,

Bluetone
 
I worked contract-to-hire for a Fortune 400 company and was hired when my contract was expiring, and a coworker extended his contract another year before he accepted a full-time position.

I am at a Fortune 100 company now on contract-to-hire and over half the team was contract when they started there and then accepted a full-time position. One guy contracted for three years before going full-time.

Most large corps hire people as contract-to-hire and offer a job at the end of the contract. Their reason is they want experienced people who don't have to be trained to do the job that is being filled. Contract employees are usually highly-skilled and fill the needed niche.

Another benefit of contracting is overtime. Regular employess have to do their job even if it requires nights and weekends. As a contract employee, I am paid for any time I work. If they call me at night or I have to do work on the weekend, I am paid for it, or the company will let me cut short on a Friday so I only work 40 hours/week. Plus my pay is higher than as a regular employee. Not too many FTE 1.0 are close to six-figures, which I would make if my employer let me do overtime instead of comp'ing me at 40 hours (which I don't mind.)

My last job I worked too many hour and was never compensated for them. I put in something like 6 weeks of work in 2 weeks and I got one day! off as compensation. 40 hours or pay me. If a company wants me to work 20 hour days for two weeks, I would have no problem whatsoever doing it on contract, but never on salary.

To each their own. If I could, I would work contract for the next 15 years until I retire.
 
As a side note on the experience note of contractors. Not to toot my own horn, however, when I started when I am now, one guy has been setting up a Linux management server that has taken months and couldn't get one piece to work. In a few days, I had it working. That part of the problem solved.

Another setup was network installation on AIX that wasn't working as they had hoped and the server was wiped clean and I was given the green light on it. Two days later it was up and running.

I've done it. I am the real deal. I come as advertised. I work for the company to produce results. I do that!
 
Khz,

I've read your post for the past several months and have always found your attitude positive and value-driven. You understand that the very thing that some complain about (a hyper-focus on production, results, and value) is what makes IT a great career.

I wrote in the intro to my book that IT is a great career for that type of person. It is a performance-based advancement enterprise. Contract-to-hire provides the opportunity to shine prove your value to a company.

If the company has no interest in bringing you on - as I stated in the past - you are not an indentured servant. Move on! Find the next engagement or deal.

Most companies are not "out to get you" or "keeping the man down." They are, as you should be, in a competitive environment. The Us versus Them attitude that some seem to advocate - watch out, they are out to get you - is an infection that any worker would do well to avoid.

You can spot the people with that illness pretty readily. If you work well with management, they will take you aside and tell you all the negatives about that person - under the guise of warning you. Then, when you don't listen, they will ostricize you claiming that you have sold out, are a brown-nose, a corporate shill.

And yet, in doing that, you will be the most indepedent of the group. It is not a new phenomenon. In Ben Franklin's autobiography he wrote about a man who visited him right after he started his printing business. The man explained that the entire economy of Philadelphia was a scam and ready to collapse. He told Ben of all the power conspiracies.

Ben Franklin said that he was actually depressed for some time but finally stopped allowing the man to talk to him. And, of course, his business thrived, he pioneered time management and self-improvement, and people still do so in Philadelphia and elsewhere to this day.

This is a long-winded way of saying thanks KHZ.

Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro
 
Thank you Matthew. I always enjoy reading your comments because of your knowledge, experience and competence. Your views are always insightful.

I try to have a positive attitude. The guy who is working on the Linux server and has problems after problems has told me he is basically ready to throw in the towel because it doesn't work.

My comment to him is that it works it just needs a different approach, something that I did when I got that one piece to work. He practically came unglued in front of the team (and manager) when I said that, but I stick to what I said. He continues to try the same thing over-and-over and it never works. To me if one way isn't working then try another, because usually there is more than one way to do it.

This morning I approached him with a new direction on his continued problem and he was very much irritated when I mentioned the possible way to do it. He said he is following the vendor's technical support and the way they have told him to do it (even though it isn't working, and he complains it may take a week to hear from them. Then they want him to run something and send the results, then waits a week to get a response.) To me if that isn't working, which obviously it isn't, then search for the solution and answers yourself.

That is what you are (should) being paid for. They can pay someone $10/hour to type in everything tech support says, then send the results via email, wait for the response and repeat the cycle. I am paid for thinking creatively, problem-solving, knowledge, reasoning, critical thinking. Anyone can read words in a book or manual that say do this, do that. My job is to understand what those commands do and how they interact with the system and what repurcussions could happen (my knowledge).

If they want a drone they can save a lot of money, because I am not, but I offer much, much more.
 
Just because this does not happen in all cases doesn't mean it isn't happening at all, after I read this I realized I've seen it happen many times.
 
The article is assuming that the contractor *wants* to go full-time. I think in most cases, that may be true. But it's also not true a fair amount of the time. In my case, I like being a contractor, as my relationship with the company is explicit -- I work, they pay me for it, end of story.

Chip H.


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If you want to get the best response to a question, please read FAQ222-2244 first
 
I dunno. I always feel like I'm missing the boat a little.....

I've been in the IT field for 20 years.... and I have yet to break $50K. But, I enjoy what I do.... I'd just enjoy it a little more if I could pay my bills a little easier. ;)



Just my 2¢

"In order to start solving a problem, one must first identify its owner." --Me
--Greg
 
gbaughma,

You have to have an income goal - get pretty specific. You also have to assess whether it is possible at your current job or in your current role.

A few rules/ideas about earning more (let's say 6 figures as a goal):

Most people who earn more ask for more.

Most who earn more do not typically view that amount as overly significant.

Typically, once you do it once, it is easier to maintain - meaning, you cross a mental threshhold - making those value situations/opportunities more apparent and asking for that amount becomes easier.

Most who earn that, view obstacles, setbacks, and difficult people as par for the course - they happen but mean little in the overall scheme of things.

There is, as with all objectives decisions and sacrifices to make.

For instance, my wife and I were recently talking with a couple. The husband expressed an interest in earning more and asked me how he might do so. We did similar types of work.

However, in listening to him, he loves playing video games and has some TV programs he really likes. He also really doesn't like to get up early.

I explained that it is likely that he will have to sacrifice somewhere - at least to get things going. It was apparent to me that he was far less interested after that.

My question is how much is he paying to play video games or watch a TV show. He might say he is paying nothing after the cost of the equipment and game - perhaps online membership.

My view is that he is paying much more. If you can earn - even $20,000/year more (that is $83 a day - using a 20 day working month), what would it mean? If you invested it over 15 years what would it mean?

You would have made an extra: $300,000 over 15 years.
Invested at
- a meager 8% = $543,042.28
- 10% = $635,449.63

I have to ask whether those videogames or TV shows can bring half a million dollars of enjoyment.

That is some expensive fun.


Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro
 
Matthew:

I agree with what you're saying, but to be honest with you, I'm probably one of the harder working people you'll ever meet.

1) I work full-time as an IT professional.
2) I consult for a bank and a couple of businesses.
3) I run a Wi-Fi support answering service
4) I work part-time with a professional sound and lighting company

.... I must not be working smart enough, because I can't possibly work any harder than I do. :(



Just my 2¢

"In order to start solving a problem, one must first identify its owner." --Me
--Greg
 
I agree, hard work is not the deciding factor. I didn't mean to imply that. Just that you have to both sacrifice and then start looking for those opportunities where greater income can be generated.

I have no idea what type of work you do but after 20 years, if you have been making professional moves, your salary certainly should be close to 50-70k.

Of course, this is, again, unqualified, sight-unseen, no knowledge of where you live, what you do, etc.

Have been with the same employer during the bulk of that time?

What is your value to the organziation? Meaning, how does what you do impact their bottom-line?

How are your people skills?

Do you present yourself as an expert, delivery, and expect the corresponding recognition?

There is more that I really would ask but these are where I would start.



Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro
 
Depends on the area you're in too, cost of living varies widely from place to place, 50k may be pretty good in some places, where I am col is high so that would be a little low. It's not just what you take in, but what you retain after expenses.
 
to come back what bluetone posted; I see many similarities with the German job market, depending on the field you are working in. I used to work for the media industry (TV), the IT contarcts are most of the time permanent, there are about 10-20% contractors. Within the editorial staff about 90% are contractors with time limited contracts. Many people are offered an internship after finishing universities. Newspapers often talk about the "generation internship", no job, no income and some day no retirement pay.

Best Regards, Franz
--
UNIX System Manager from Munich, Germany
 
After reading the OP remarks I had only a few thoughts of my own personal experience over the years.

1) My company owes contract-to-hire systems to at least 3 individuals that come to mind that are viewed as mission critical associates.

2) I started with my company 13 years ago now on this very system.

So what! My views with tunnel vision of one company while setting my consulting aside is irrelevant (even knowing I was offered plenty of opportunities from those contracts)

just a lot of negative about "contract to hire" in the most general, worst case-terms.

Yes!!! Why does it seem to be hard to find proof in the forum lately with hardened allegations and loosely stated facts?

So I went out and I love Google. Sense I live in the USA I searched for those statistics and found an interesting line in a report from the American Staffing Association

STATISTICS:
72% of temporary employees obtain permanent jobs while working for a staffing company.
SOURCE: American Staffing Association

Interesting! I wish I would have looked this up months ago while looking for new employment. I turned down several contract-to-hire positions from agencies due to the missing insurance of a permanent position. Now I think it may have been a payday I lost possibly.

Another interesting fact from the American Staffing Association was only 9.3% of temporary and contract positions are held in the IT field. Doesn’t seem like much of a substantial percentage. I would however like to see consulting services some how added in that graph. Although that may not be relevant sense consulting in most cases means you have full-time employment and are out-sourced by that employer. It does have relevance when companies use that system instead of hiring an individual or hey, using contract-to-hire

References:


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