In which I contemplate becoming an HTPC



  • Well, a C anyway; the HP part is debatable. I would prefer to be a normal, "permanent" employee, but contract jobs seem to be quite a bit more readily available than FTE, so in the interests of having a job at all, I'm open to being a consultant (again).

    I've read that the rule-of-thumb is that as a consultant, you should ask for an hourly rate equivalent to 1.5 * your annual salary as an employee1. I don't think I can get that. Indeed, the highest rate that has come up in conversation is 1.48x, and the highest anybody has offered2 is 1.39x.

    Yesterday, one company quoted, not an hourly rate, but an annual salary as a W2 employee of the agency, with benefits, of about $30000 more than I was making. On its face, this looks great, but it turns out it's equivalent to an hourly rate of only about 1.3x, and which is $5/hour less than what I was told by a recruiter for another agency is the standard rate for that client, in one of the highest cost of living areas in the country. And the benefits they offer — let's just say not all benefits are created equal.

    The benefits, themselves, are fine — standard high-deductible health insurance, dental, vision — almost, if not exactly, identical to my coverage through my previous employer. (Would-be commentors from countries with socialized national health care, don't bother. US health care is what it is, and what it should be is irrelevant to this rant.) However, the difference in cost — wow! (This is the first agency to provide me with benefit information, so I don't really know yet whether it's typical.) I knew my previous employer subsidized health insurance for employees, but I did not realize just how much — over $10000 per year. The same insurance that cost me about $51/week would now cost me $274/week.

    1I've also seen one web site that says 1.5x is too low; 2x is correct. I suspect that is applicable, if at all, to a consultant who is self-employed, not to one working through an agency, which I would be.

    2That is, "This is what we will pay, if the client likes you," not an actual offer of an actual job at that rate.



  • Over here we seem to pay contractors in IT way more than 1.5x what we pay FTEs.

    Seems to be 2-3x the equivalent FTE rate for most of the ones I've seen (or know about because that's what the company I work for pay).


  • Discourse touched me in a no-no place

    @HardwareGeek said:

    I knew my previous employer subsidized health insurance for employees, but I did not realize just how much — over $10000 per year. The same insurance that cost me about $51/week would now cost me $274/week.

    Yes, that happens. Some companies--mine included--will give a breakdown of costs every year. My company pays 80%, and I pay $2-300 per period (we get paid semimonthly, not biweekly.) I would have to log into our employee self service website to see the actual amount.

    Having said that I have a very good plan with a relatively low deductible.


  • I survived the hour long Uno hand

    @HardwareGeek said:

    The same insurance that cost me about $51/week would now cost me $274/week.

    Assuming you can get the same rate. Consumer-facing insurance policies cost more than the bulk plans companies buy, typically, in the US.

    Wait, are you looking at independant contacting or contracting via an agency? The guidelines are based on independent contracting, where you cover your own costs. Agencies use that number then take a cut from that, so you won't end up getting that much.



  • I'm looking at contracting via an agency vs. FTE. I don't have the desire nor self-promotion skill to beat the bushes trying to drum up business for myself as in independent contractor. In this scenario, I would be, in essence, a FTE of the agency (but only if and as long as the client wanted me). I was making a pretty much apples-to-apples comparison of the insurance cost to FTEs of my former employer vs. that offered by the prospective employer (agency).

    I'm well aware of the cut taken by the agencies. In my last contracting job, before the company hired me as a FTE, my manager (at the client) didn't specifically tell me what the agency was billing for me, but he did mention what they were billing for comparable contractors that were brought on board at the same time (presumably my rate was similar), and what the agency was paying me was less than half what they were billing the client for the coworkers. Even if I'm in a better bargaining position now (I'd been out of work for almost two years during the recession, and was desperate for any job I could get), I don't really want to deal with that particular agency again.


  • I survived the hour long Uno hand

    @HardwareGeek said:

    what the agency was paying me was less than half what they were billing the client

    That's pretty common. Agencies really kind of suck. They're still paying part of that insurance cost, probably, just as little as they can get away with. My insurance costs rose significantly when I went from the agency's insurance to insurance from the Exchange and plummeted when I became a FTE.

    Pretty much the upside is that you don't have to deal with the self-employment taxes and so on, as you're still an employee of someone, so they have to take care of that for you. So you can toss out all the advice you'll find about doing payroll taxes and social security and whatnot. The benefits will be utter crap though. I'd compare the total package with the total package you'd get for being an FTE -- is it higher enough to offset the shitty benefits and lack of job security?



  • @Yamikuronue said:

    That's pretty common.

    The only other previous contract where I knew how much the client was being billed, it was, IIRC, a 68:32 split; this agency was more like 40:60, with me getting the short end of the deal, and no benefits (pre-ACA; I went years with no medical insurance at all — shitty benefits don't bother me as much as ok benefits that cost more than I can afford).

    @Yamikuronue said:

    is it higher enough to offset the shitty benefits
    Yes. The benefits are nearly identical to what I had at my previous employer (and still have, through COBRA). They will cost me $11600 more, but the salary is almost $30000 more; it's just that the $11600 caught me by surprise.

    @Yamikuronue said:

    and lack of job security?
    This is an issue, but it doesn't worry me quite as much with this client as it would with others. Contracts with this client tend to be 12 – 24 months are are often renewed (but with a mandatory 90-day break in service after 24 months) or converted to FTE. It is (or appears to be) a lot more stable than my last contract, where the client kept me on board for over a year before hiring me as a FTE, but would not commit to more than 2 or 3 months at a time.


  • SockDev

    Took me a while to parse the TLAs so.... for the confused

    @HardwareGeek said:

    HPC

    @HardwareGeek said:

    FTE

    @HardwareGeek said:

    US

    @HardwareGeek said:

    COBRA


  • SockDev

    @HardwareGeek said:

    COBRA

    Please tell me the person who runs that is called Commander…



  • Nah, he was replaced by Serpentor.



  • Sorry, I assumed these would be familiar to most readers. I've seen the acronym HPC used here in tales of incompetent HPCs leaving behind huge piles of steaming WTFs for the FTEs to clean up (or not, if management remains convinced that the WTFs must be gold because they paid the HPCs so much for them).

    @accalia said:

    Consolidated Omnibus Budget Reconciliation Act... which apparently means 'the insurance you can buy when you are recently unemployed through your prior employer's coverage plan.... WTF congress?
    I always assumed the insurance provision was something snuck into the middle of one of those 1000-page "OMG, we have to pass this or the entire Federal government will shut down" budget bills the Congress always passes on the last day of every fiscal year. This is the lasting legacy of the 1985 version.



  • Hey, maybe type 584938754347y6543658736574365743 more words without defining what the holy fuck "HPC" even standards for, ass.



  • That acronym is not exactly unheard-of on TDWTF, and @accalia did just define it. However, since mobile users may have a hard time seeing her definition, here it is in plain text for the special snowflakes: Highly Paid Consultant.

    @blakeyrat said:

    "HPC" even standards for
    Unfortunately, there are no standards for who should be allowed to be an HPC.



  • Ok, but Captain Dingus? You gotta put the definition BEFORE you use the term 57348276432 times.

    Am I the only one here who graduated elementary school? Is that the problem?



  • How does anyone who's been a member here for longer than 18 microseconds not know what HPC means?


  • Discourse touched me in a no-no place

    @HardwareGeek said:

    but would not commit to more than 2 or 3 months at a time.

    Oh, man, I hate that. I worked for a client that would renew in 1-month increments once. Because of that I had to pay $2500/mo for a month-to-month corporate-lease furnished apartment.



  • With the power of aggressive illiteracy?


  • SockDev

    /me raises her hand

    took me about a minute to figure it out. then i posted the definition..... now blakey's yelling that HG didn't define it himself, even though i put myself in honest and blatant risk for a whoosh badge by posting the definitions...



  • my first tough was: why he wants to become a High Performance Computer?


  • Discourse touched me in a no-no place

    @blakeyrat said:

    Am I the only one here who graduated elementary school? Is that the problem?

    No, the problem is you not already knowing the term, after being such a long-time frequenter of this forum.

    BTW your other personality is much nicer, as seen on twenty-sided today.


  • SockDev

    @accalia said:

    /me raises her hand

    You're not the only one ;)

    Worked it out pretty quick though.
    @accalia said:

    i put myself in honest and blatant risk for a whoosh badge by posting the definitions

    Why would it be a whoosh?



  • @FrostCat said:

    I had to pay $2500/mo for a month-to-month corporate-lease furnished apartment.

    I wasn't quite that bad off; there were a number of apartment complexes around that would give a 3-month lease, but I paid extra for it, and the rent went up with every renewal (until a new owner bought the place; the next renewal, the new manager said, "You're already paying well over the market rate, so your rent won't be going up.").



  • It was somewhere in the recesses of my memory, but the first thing it brought up is high performance computing. Which is also what Google brings up almost exclusively.


  • I survived the hour long Uno hand

    @HardwareGeek said:

    Contracts with this client tend to be 12 – 24 months are are often renewed (but with a mandatory 90-day break in service after 24 months) or converted to FTE.

    If that's your aim, I wouldn't even think of it like being a HPC. That sort of contract is what I was taking before I got hired in, with the aim of getting hired in, and ultimately except for having shitty benefits and not being allowed a laptop I was basically just like any other employee.



  • @Yamikuronue said:

    not being allowed a laptop

    :wtf:

    @Yamikuronue said:

    I was basically just like any other employee.
    Mostly, but it did have certain advantages at my previous employer. I was exempt (maybe even unwelcome, but I never tried) from the mandatory all-employee meetings, but I could show up, grab some pizza, and leave before the meeting started. I was also exempt from some other stuff that is a WTF for another day.


  • I survived the hour long Uno hand

    @HardwareGeek said:

    I was exempt (maybe even unwelcome, but I never tried) from the mandatory all-employee meetings

    Ditto, but I never saw that as too much of a benefit, since it came with the drawback of scrambling for information about what was coming down the line.



  • Our company meetings, once I became an employee, were rarely interesting — mostly about financials and other stuff I don't want to talk about yet.



  • @HardwareGeek said:

    it's just that the $11600 caught me by surprise.

    USA-ians:

    It looks like you can find this (after the fact) out via box 12 on your W-2, coded DD:



  • @HardwareGeek said:

    However, since mobile users may have a hard time seeing her definition

    This has been a thing on mobile here for a while:



  • @HardwareGeek said:

    In my last contracting job, before the company hired me as a FTE, my manager (at the client) didn't specifically tell me what the agency was billing for me, but he did mention what they were billing for comparable contractors that were brought on board at the same time (presumably my rate was similar), and what the agency was paying me was less than half what they were billing the client for the coworkers.

    That's normal for contractors, period. I know my company's rate is typical 2-3x an employee's salary. Obviously, that covers other stuff, too: benefits, overhead (which includes stuff like PTO, budgets for new business generation, etc), profit. It's really just highlighting the other hidden costs of employing people.



  • @blakeyrat said:

    Am I the only one here who graduated elementary school? Is that the problem?

    Sort of. You should have continued your schooling after elementary.



  • I'm schooling you every day on this forum.



  • @boomzilla said:

    It's really just highlighting the other hidden costs of employing people.

    +1



  • @boomzilla said:

    Obviously, that covers other stuff, too: benefits, overhead (which includes stuff like PTO, budgets for new business generation, etc), profit.

    New business generation and profit I'll give you, but there were no benefits or PTO. Not billable to the client? No $ for you.

    Even the stuff they did do, billing the client and processing our payroll, they didn't do correctly. The client issued a PO for $X where X is hourly rate * 40 *, say, 13 weeks (3 months), then when almost that much had been billed, they issued a new PO for the next 3 months; however, the agency would continue to invoice against the old PO. Nor did they do payroll right; I moved from CA to WA for the job, but they withheld CA state taxes.



  • @HardwareGeek said:

    New business generation and profit I'll give you, but there were no benefits or PTO. Not billable to the client? No $ for you.

    Sure...I was talking about my company, where the split between me and my company (salary-wise) is probably about 33-67. Include benefits and I'm probably up to somewhere around 40%.


  • Grade A Premium Asshole

    @HardwareGeek said:

    I've read that the rule-of-thumb is that as a consultant, you should ask for an hourly rate equivalent to 1.5 * your annual salary as an employee1

    That is a very rough rule of thumb. If you are going to be a 40-hour per week contract employee, you basically take your expected total comp (health insurance, vacations, perks, etc.) and divide by 2000 to get an hourly rate and then add in whatever "windage" you deem necessary. You will obviously have an end date that you will need to anticipate, and if you anticipate some unemployment in the period between your end of contract and your next gainful employment you should add that in to the figure also so that you feel comfortable. Another point, depending upon where you are in the US, as a contract employee you may or may not be exempt from overtime rates. This is something else to consider when coming up with a number.

    As you alluded to in your point #1, the 2x multiplier is more for freelancers. Most freelancers set their rates far too low as they only take total comp and divide by 2000 without realizing that they will never have 2000 billable hours in a year. There is a hell of a lot of unbillable time for freelancers and that has to be accounted for in the equation. I have always felt that a multiplier was never the right way to arrive at a figure for freelance work. In all reality you should estimate your billable hours per year, subtract a few more from the figure as you are most likely going to be optimistic in your estimate. You have to account for job estimation, invoicing, general fucking time wasters like phone calls with idiots, etc. You also have to account for risk. As a freelancer, you have risk. Anytime there is risk, there has to be more reward or you are a fool.

    In all reality, the 2x multiplier is probably pretty damned correct on average, but it completely misses how you end up at that figure so it leaves a strong possibility at arriving at the wrong number in lots of cases. Just because the number will be correct on average, does not mean it will be correct for you. Also, fuck average. Be exceptional and charge exceptional rates.

    @HardwareGeek said:

    the highest rate that has come up in conversation is 1.48x

    That is close enough to the 1.5x, if that is the correct number for your situation. We are talking about ~1%.

    @HardwareGeek said:

    the highest anybody has offered2 is 1.39x.

    Go back to the first paragraph I wrote and see if this is close to what you would come up with. Also, see if you can pull statistics on contract rates for similar job positions as yours in that area. That is the real number anyway. The price that will be paid for labor is what the market will bear. It is up to you to decide if that is enough, or if you would feel more comfortable with a FTE position.

    @HardwareGeek said:

    I knew my previous employer subsidized health insurance for employees, but I did not realize just how much — over $10000 per year.

    That sounds about right. My wife works for a medium-sized enterprise with ~1,500 employees and the company spends $170M/year on health insurance. When you know the real costs, it is truly staggering.


  • Grade A Premium Asshole

    @HardwareGeek said:

    what the agency was paying me was less than half what they were billing the client for the coworkers.

    Well, they have costs also. In business, as an extremely rough rule of thumb, you need to bill people out at 3X what you pay them in order to turn a steady profit.


  • Discourse touched me in a no-no place

    @Polygeekery said:

    That sounds about right. My wife works for a medium-sized enterprise with ~1,500 employees and the company spends $170M/year on health insurance. When you know the real costs, it is truly staggering.

    We need another "where does all the $$$$$$ go?" thread.


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