ALC Consulting

March 11, 2009

What is a Contractor, Anyway?

Filed under: Contracting — Anne Cloward @ 11:45 pm

A long time ago, my brother-in-law invited us over to dinner. He didn’t work, and was always coming up with schemes to make money, “the easy way.” (with no real effort on his part). He proceeded to give us a sales pitch into becoming Amway distributors for him. He had it all planned; we would go out and sell soap for him, and he would sit back and watch the money roll in. With no real effort on his part, money would be coming in so fast, all he had to do was count it.

There are people out there who view contracting as an easy way to make money. All you have to do is sign a contract and show up and the money will be there with no real effort on your part. The real world is really quite different.

In the spring of 1998, I was working full time for a hardware manufacturing company writing training documentation for new hires .  I had been working as a tech writer and trainer for six years and had some good experience under my belt. I was approached by a recruiter who wanted to hire me for a year at a lot higher salary than I was making. It was working for a large non-profit whose mission I believed in. So I jumped on the consulting bandwagon. That’s pretty much been my work life since.

One of the purposes of this blog is to explore the world of contracting and share some of my experiences. If there is a mistake contractors make, I have probably made it in the past few years. I have learned a lot from these oopses and will gladly share my experiences, if it will help anyone learn from them.

Often you will hear of someone who worked for a company for a long time, and then was laid off, only to be rehired as a contractor making much more money. Seems like the company made a big mistake, didn’t they? Why didn’t they just keep the employee on their payroll?

Even though a contractor may be making more, he or she costs the client less money than a full time employee.

Why?

Because they don’t have to pay benefits to that person.

Contractors work under a different set of constraints that may make them more attractive to an employer, but the chief one is that they cost a company less.

Contractors can be let go with a minute’s notice and no severance pay. Contractors don’t cost a company in terms of overhead such as vacations, insurance, and retirement contributions. These costs can really add up. Just ask any of the big 3 automakers.

My definition of a contractor is anyone who works for a client on a temporary basis. My contracts have spanned two weeks to one year. Contractors are often used to perform tasks that no one in the company has the time or expertise to do. I am a technical writer and instructional designer and have found a niche most of the time doing documentation for IT shops.

If the company had someone who could do a job, they would not be hiring contractors.

What is the difference between a contractor and a consultant?

I honestly don’t know.

When I first started as a contractor, I thought that consultants were people who really knew their stuff and had all the answers. Contractors were lower down in the pecking order and had less experience. Lately, the difference between the two titles has blurred. I was stunned when kids fresh out of college on their first job called themselves consultants. 

In my world, contractors know their field well and know how to use their tools. They don’t get the luxury of OJT. They are supposed to hit the ground running. They do not get a three or six month window to learn the ropes. They are supposed to start producing from day one.

Contracting is a good way to go for those of us who have grey hair, grandchildren, life before television and home PCs, and even the Internet, and memories of the Beatles invading America. It’s no secret that many HR people freak at the sight of someone who might look like their parents and who could cost them money in added insurance costs. It may be illegal, but it still goes on. In the world of contracting, age is not an issue. You are valued for what you know and can do, not what you might do in five years.

Contracting is a great way to earn a living if you don’t want to work all year round and plan to take lots of vacations or tend to obligations that keep you from working for a time.

Disclaimer: I have grey hair, grandchildren, did not get a TV until I was 10, or a PC until I was 40, and remember the Beatles, and wore miniskirts the first time around.

Contractors are used in almost all industries, and while some do not even work in the US, I am going to focus mainly on the world that I know, contractors who work in the white collar world and have advanced skills and experience. 

Contractors are generally independent people who are flexible and willing to take on new assignments. they know that their livelihood depends on their being quick on their feet and being able to learn lots of new things in a hurry. They are often  restless risk takers who view a full time permanent job as they would a jail sentence.

My next post will discuss how to become a contractor. There is a bit more to being a contractor than printing up business cards and passing them out.

Stay tuned. . .

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