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New Post 7/22/2008 2:18 PM
User is offline Irene
31 posts
9th Level Poster

Contractor vs. Permanent positions 
I heard my co-workers talking about the differences between contractor positions and permanent positions. Except the obvious financial difference, I am wondering if a contractor will actually have a good career future if s/he is not that experienced and well-known in industry yet. I want to know how senior managers look at contractors who work in the same team.
New Post 7/23/2008 5:39 AM
User is offline Tony Markos
493 posts
5th Level Poster

Re: Contractor vs. Permanent positions 


I have extensivie contractor experience.   I am not much for candy-coating my thoughts, so here goes.   How does management think about contractors working on the same team?   In a word: differently.   Basically, often I am called upon to do what others can not or will not do - the tough stuff, especially integration of the work of others    At the same time managements willingness to engage me interpersonnally (a contractor)  is  often significantly less than with permanent employees.   That is, I experience alot less of the informal relationship building with management than do the perms. 

So contracting often requires a person to work exceptionally hard under exceptionally difficult relationship conditions.   This, of course, can cause alot of stress.   On my current assignment, they had to let another contractor go because the person buckled under the conditions that I mentioned.   She was imagining angery voices goating her at work.   It rattled me just observing her.

On the pulse side, most managers know that a good contractor has to be an exceptionally strong person, and this of course will lead to significant rewards for the individual, whether he/she remains in contracting or becomes an employee.





At the same time

New Post 7/23/2008 8:49 AM
User is offline Irene
31 posts
9th Level Poster

Re: Contractor vs. Permanent positions 
Modified By Irene  on 7/23/2008 3:32:50 PM)
Thank you, Tony for sharing your experience and feeling on this!
First, may I ask you what made you choose to be a contractor, despite the down side?
Looking at the environment, I found that the managers do not engage contractors in general team/company meetings unless they are directly related to the topic, not even mentioning the team/company events. Normally contactors are doing low level and tedious work. Most contractors hardly get the chance to touch the tough stuff unless s/he is at very senior level already. If this is the normal situation, I wonder how a contractor can improve him/herself to get to a senior position. So Tony (or anybody who is interested in this topic), could you also share your experience or lessens learned for self-improvement to get to this senior level?
More specifically, since a BA/BSA needs to interact with people and get very familiar with the company structure, would it be better for a BA/BSA stay in one place for at least several years to get proper training, gain strong domain knowledge before s/he goes independently (be a contractor)?  
Thanks again!
New Post 7/23/2008 8:50 PM
User is offline Jarett Hailes
155 posts
6th Level Poster

Re: Contractor vs. Permanent positions 

Hi Irene,

It really depends on the environment.  In most places I've been, contractors are viewed: a) suspiciously ("they have not loyalty to the company"), b) with disdain (apparently because we are supposed to make so much more money), c) expendable.  That said, in my current position the employer has treated me very respectfully and as part of the team.  Typically no differentiation is made, except of course when employee specific items of interest come up (training, wages, vacation times, etc.). 

In most places, knowledge-based contractors (as opposed to temp workers or administrative contractors) are brought in on an as-needed basis to fill a void due to lack of talent within the employee pool.  As such, they are paid a premium and are expected to be able to perform as good or better than an equivalent employee, and most often with little or no orientation time (one of my BA instructors is fond of saying that when he hires a contractor, if they don't produce anything by the end of week 1 they aren't around for week 2).  I agree with Tony that in some places they can be dumped on/pressured even more, although that is not always the case.

Why do I do it?  Money is definitely a factor - I make about 50% more as a contractor (right now), although after factoring unpaid vacation, sick days, insurance, payroll taxes, paying for my own training etc. it's probably down to about 15-20%.  But for me, I love the flexibility of moving between projects and companies, which in turn gives me a greater breadth of experience and knowledge base.  I also enjoy the challenge of having people with high expectations of me.  I am more likely to be able to take off longer periods of time so I can travel (not simply 'vacation') while I am still young, and later on I see benefits of being able to take off more time to be with my family.  I am also looking to go overseas for at least one contract before I have children, something that would be very difficult to do if I was looking for a permanent position (6 months would be perfect for me). 

In most places in the world, a contractor is expected to be able to leverage their expertise and get up and running quicker and always produce high quality results.  As such, I would wait until you have at least a couple solid years of experience in a chosen profession before venturing out.  I did break this rule though - my first full-time BA job was as a contractor.  The reason I made the jump early was the opportunity presented itself and my locale's job market is extremely hot right now, so the timing was right.

New Post 7/23/2008 9:44 PM
User is offline Adrian M.
755 posts
3rd Level Poster

Re: Contractor vs. Permanent positions 

Hi Irene,

I agree with both Larimar & Tony...

You need to ask yourself why you want to be a contractor... is it the money, the flexibility, getting a job, etc.?

I have personally managed many contractors in the past and I make a point not to differentiate between the contractors and the full timers when it comes to how they are treated, the types of tasks they get, etc.  However, the reality is that contractors will be looked at differently then employees and for good reasons... they fill a specific need within a team.

Why do companies hire contractors?

  • To augment the existing talent in an organization (aka bring fresh ideas, train existing staff, etc.),
  • To work on a complex issue/problem which may be one of  a kind and not so common within the given project/company,
  • To quickly increase the size of the team when a new project is approved without having to commit to a full time employee,
  • Even though a contractor may get a higher hourly rate than an employee, they may cost the company less in the long run since the company generally does not pay for vacation time, sick days, 401k, medical/dental benefits, training, etc.

Pros of being a contractor:

  • Generally, make more money than a regular employee,
  • More flexible schedule,
  • Gain lots of experience fast,
  • Work on a wide variety of projects/tasks.

Cons of being a contractor:

  • Probably you'll put in longer hours than regular employees,
  • You may be let go at any moment without notice or reason,
  • Most likely you will not get opportunities to lead teams and move up the management chain,
  • Probably you will not get regular feedback (reviews) on how you're doing.

I would also like to point out a subtle, but real, difference between a contractor and a consultant.  Many companies use contractors which have similar skill sets as the general business analysis population aka some are good, some are OK, some are excellent and some are not so good.  These contractors are generally used to perform business analysis activities under the same type of supervision as an employee.

A consultant, on the other hand, implies a significant amount of experience and expertise in business systems analysis.  There's no such thing as junior consultant... If one is junior, it can't really be a consultant.  Consultants are generally used when a business has a specific need which cannot be filled by the average skilled analyst and, therefore, they bring a consultant on board.  Consultants may be used when a project needs to be executed very fast and a very senior/experienced resource is need who can work without supervision and direction.  Consultants may also be used when an organization is looking to setup standard business analysis methods and practices and, therefore, may be bring in a consultant to help setup a new BA team and train employees and contractors.  Consultants tend to make a lot more money than regular contractors.

Hope this helps!

- Adrian

Adrian Marchis
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