I earn $10k/mo contracting 20 hours per week. Personally, this extra income helped me maximize my day job benefits (401k and ESPP) and provided liquidity during the home buying process.
Maybe you can answer a question that is nagging me.
I recently moved to the US, and ever since I keep getting messages on LinkedIn offering contract/freelance jobs.
However the hourly rate is so poor that it would pay less that my current job base pay (not counting stocks and bonuses).
In Europe the rule of thumb is that contract job should pay 2x your full time job rate. This is based on the associated overhead plus lack of benefits (e.g. you need to pay your own pension contribution).
This made me think, is anyone taking these contract jobs? I see several possibilities:
a) Contract work in the US is not attractive.
b) People reaching out in LinkedIn are the bottom of the barrel. There are better rates out there.
c) People run several contracts in parallel, or with a full time job.
In the US, there are (at least) two competing views of contractors.
One side believes that contractors are cheap, disposable labor that costs less than hiring an employee with benefits.
Another side believes that contractors are a way to access temporarily needed expertise they lack in-house and cost more than hiring an employee with benefits.
Some firms' views depend on the skillset. Other firms have the same view no matter what.
In my experience, the more general a position, the more likely it is to be put in the "cheaper" group. The more specialized a position, the more likely it is to be put in the "expensive" group. Neither of these categorizations necessarily is correct, just how the firm is viewing things.
I have a friend that has literally only done contracts for the last 8 years. To put bluntly, he is bad at coding and could never last in a full time job. He once bragged to me that he took a Microsoft Azure cert after failing the test 5x.
There are high paying contracting jobs, but they are only available to people that know people that offer good contracts. A friend of a friend has a 6mo contract with a Fintech company paying $500k.
Two people I worked with, left and ended up landing a $150/hr consulting gig for the last 4 months. Neither had more than 6 yers of professional developer experience but they are AWESOME devs. 100% remote. They were just informed their contracts were extended for 12 months. Each are approved for 40-50 hours per week. Current project: MEAN stack. Next project looks like MERN or JAVA. Large company primarily in/around healthcare related services.
I know at least one tier 3 public tech company is paying $300k/yr usd ($200k base + 15% bonus + 70k in stock) for people with less than 4 years of experience + full benefits (401k, 18 days pto, etc.)
The 2x calculation is similar in the US. I've also seen "3x your hourly rate as an employee" if you're relying on the contracting income. It's important to account for the time you'll spend doing sales and misc. non-billable business building.
There are lowball contracting offers all over the internet and people sometimes accept these for various reasons. A higher tier of sustainable contracting does exist though, with most of the higher paying work sourced via networking, not via job boards.
In the UK we have Temp jobs, ECM (ie/ inside IR35) Fixed term contract (FTC) too, not just contract (outside IR35).
a) There are not as many outside IR35 jobs in US (1099 is the term they use)
b) yes, once a recruiter randomly contacts you, they are outside of their usual placements which usually means their contacts have all declined it.
I'd wager it's for the same company for over 3 months or more and its for people you've worked with or for in the past that trust you for a domain specific issue that doesn't need 100% of your time. Like a cloud infra engineer for a less than 20 person startup or something like that.
What I meant by side gigs was the more typical model of finding small gigs with flexible (read: resource constrained) buyers.
I recently moved to the US, and ever since I keep getting messages on LinkedIn offering contract/freelance jobs.
However the hourly rate is so poor that it would pay less that my current job base pay (not counting stocks and bonuses).
In Europe the rule of thumb is that contract job should pay 2x your full time job rate. This is based on the associated overhead plus lack of benefits (e.g. you need to pay your own pension contribution).
This made me think, is anyone taking these contract jobs? I see several possibilities:
a) Contract work in the US is not attractive.
b) People reaching out in LinkedIn are the bottom of the barrel. There are better rates out there.
c) People run several contracts in parallel, or with a full time job.
Is any of these true or am I missing something?