It’s been a quiet start to 2016 for me, even though there have been some things going on for me “behind the curtain”. I wasn’t ready to share just yet, but I think I am now, since things have settled down for the moment.
My contract as a knowledge management specialist ended early. The projects that they kept saying to me, “They are coming…we’re waiting for approval…” fell through. Two of them. They also didn’t have any other work for me to do, so understandably, they cut the contract short. Unlike some other jobs, I was greatly relieved to be released. I did not feel that this particular position and company was a great fit. Even though I truly tried to give it a chance, I remember not having good feeling about the place from my first day of work there, and my gut instincts were right. It wasn’t a good match in the end, and the fact that they didn’t plan well for my presence there proved that.
In the meantime, I had two events that changed the picture rather quickly.
First, I was invited to be a panelist/presenter for a meeting that combined the Philadelphia Area New Media Association (PANMA) and the STC-Philadelphia Metro Chapter memberships. The meeting was about freelancing and contracting. Each group contributed two speakers, and I was one of the two representing the STC (the other was my friend, David Calloway). I was the last one to present or speak, and to be honest, I came completely unprepared. I thought it’d be a quick introduction thing, and then moderators would ask questions based on our experiences and background. (I guess I’ve been watching too many American political debates lately.) I was glad that I went last of the four presenters. Although the other three presenters covered much of what I would’ve said, I still had a few things to contribute. David and I took the stance of being contractors rather than freelancers. And as you might remember, several months ago I started my own freelancing company, but it hasn’t quite taken off yet.
But I will admit, listening to the others, I had a big realization of my own that night. I’ve been a contractor for several years, but not of my own choosing. I’ve tried finding full-time employee jobs, and it hasn’t happened in years. I think the last time I was not a part-time person or a non-contract person, it was still the 20th century! Yet perhaps, without my knowledge, I’ve already been a freelancer by default of being a long-term contractor.
That was my “A-HA!” moment, as Mitchell Levy likes to call it. I realized that yes, perhaps I have been a freelancer all along, and perhaps it really isn’t so bad to constantly be getting contract jobs. After the meeting, I told my husband about the discussion, and he pointed out that there was great opportunity in being a contractor. The biggest thing he pointed out was that each contracting job was an opportunity to learn new things. I would learn more about different industries, and often I’d learn more about new software, new procedures, and generally pick up a few new skills. I would also learn more about myself, namely what I’m good at, what I’m not as good at, and what I actually like doing. The more I thought about it, I realized that he was right. These are all opportunities to hone different parts of myself, both in improving what I do well, learning new things, and gaining insight about what is best about my capabilities and how to use them.
Now, not everyone can be a contractor. It’s not easy because of complications of being a non-employee, thus you don’t get the same rights and benefits, like affordable health insurance, as a contractor. Some agencies that contract out do offer these benefits, but they are usually at a higher rate than at a large company. But, at the same time, there are certain flexibilities that a contractor has. If a contractor is careful with personal finances, he/she can take time off, or work more than one position over time. Granted, in 99.99% of cases, if you don’t work, you don’t get paid. So, for example, when I go to the STC Summit in May for about a week, I won’t be paid for “paid vacation”. In fact, a contractor doesn’t get any paid vacation. You get paid for the hours that you work. So, that can be good, and can be bad. If you are a good contractor, you communicate these occasions with your manager, and you ensure that you are caught up with your work to be able to do this, it provides a little flexibility that an employee doesn’t have.
I’ve lamented the woes of being a consultant recently, and it was especially because I was in a bad situation. It was not a good fit, and the worse parts of being a contractor were at their absolute worse. But now that I’ve been away from that, with the help of this PANMA/STC-PMC panel last week, I’m starting to change my attitude a little bit.
With that in mind, I took a new job that started this week…as a contractor. I will be working for a global insurance company as a content writer/copywriter for their global self-service websites. This is a big change for me, because while you’ve known me as a social media writer, I really haven’t done any writing for a company this way before. I originally was reluctant to take the job, as it’s a far commute than what I’m used to and I’m taking a significant pay cut to do this job. But, I saw it as an opportunity to actually put my technical writing, editing, and UI/UX experiences to work in a different way, so it’s worth a try. After all, the contract is only for six months with a possibility for extention. Unlike the last position I took in which I had a sinking feeling about it (and my instincts were right about it), I have a better feeling about this position. After completing my first day, I think it’ll be a challenge to do things from a different perspective, but I liked the group of people I’ll be working with, the environment was more inviting, and I could tell that the work we’d be doing is much more in line with my experiences. While I’ll be learning to do copywriting the way they want, I’ll still be using skills I’ve acquired from all the conferences, webinars, grad school, and social media experiences I’ve had. In other words, I think this is a much better fit, and I think I can learn something positive from this position, which makes me feel much better about taking the position. Everyone was speaking tech language that I understood, and I was deep in the mix with information architects and visual designers as well as spending a lot of time with the other copywriter on my first day. I think it’s going to be a good thing!
I’ve also been continuing to work on a part-time basis with my old content strategist/management job at BASF. It’s my “moonlighting” job, as I call it, but it helps keep those skills fresh at the same time while working with another company that I truly like.
These next months are going to be obviously very busy, but I think they’ll provide some good insights into something new for me. I’ll be able to truly write blog posts from a technical writing and UI/UX perspective based on new experiences. Hopefully, future contracting positions will also be providing great learning experiences along the way. Perhaps embracing being a contractor means that I will be more of an adventurer than I thought.
6 thoughts on “Contracting Adventures Lay Ahead…”
Hope this new gig is a better fit for you Danielle. Thanks for the insights.
Hi Danielle, congratulations on the new gig. I’ve spent the vast majority of my working life self-employed and I wanted to touch on a few things. (Also, if you’d like to discuss some of these issues by phone, I am available.)
* health insurance
When you say that “affordable” health insurance is available only through an employer, that’s really only half the story. If insurance is inexpensive through an employer, it is because that employer is choosing to subside the true cost. You need to factor this in to your contractor rate. So…if your health insurance is $500/month (work with me, I like round numbers) as an independent, but $50/month as an employee, then you are receiving an additional $450 per month in compensation as an employee. Let’s assume 150 working hours per month. That additional compensation is $3/hour. So, if as an employee you are making $30/hour, then contractor equivalent that factors in the insurance benefit is $33/hour.
* billing hours in the year
The example above falls apart immediately because you only get paid for the hours you work (unless, see my last point). If you are out for a week with the flu, it’s not a good month. As an independent contractor/consultant, my advice is to shoot for 1,000 billable hours PER YEAR. Conveniently, that makes your hourly rate also your salary….$60/hour is then equivalent to $60,000 per year.
* When you compare employee income to independent income, you need to factor in all the benefits…paid time off, health insurance subsidies, etc. A reasonable rule of thumb is 30%. Therefore, if your salaried goal is $75,000 per year, the equivalent is roughly $100,000 in freelance income, which from the previous bullet is $100/hour over 1,000 billable hours in the year.
* flat fee versus hourly rate
As you can see, the hourly rates shoot up quickly. When your rate gets high enough that people push back, you can look at doing project-based work. But be careful! This can get you in big trouble if you underestimate project scope.
Thanks for chiming in. Yes, you are right on all these points. An employer does subsidize insurance benefits, but the bigger then employer, the better the cost to the worker. My husband works for a small boutique e-learning firm, and while the rates they have are still rather high even with the subsidy, the rates are STILL better than the rates I’ve seen through contracting agencies–and I’ve worked for quite a few of them, some of them are rather large, national “brands”, if you will. And what happens if you decide not to participate in that benefit offering–do you get the difference of that paid to you? Nope. I’ve deferred in favor of my husband’s insurance every time (again, because his was a better rate), and they don’t pay for the difference of not taking that benefit. As far as the hourly rate, if I were to go 100% independent, you are right that I would charge the way you described. But I can tell you that through agencies, you get about half of what your yearly salary would be. And I don’t know about other places, but generally the lot in New Jersey are rather cheap. I know how much I should be earning, even if it’s on an agency’s W2, and knowing that the agency gets a big cut of the actual rate charged. The agencies set it up so that companies can’t hire you as a contractor/consultant directly for a long period of time after a contract is finished because they want their cut of the money. I have one job which is a total racket because there are TWO agencies that are between me and the company, not one. I know that when the department I was working for would charge another department, they would charge the rate they were paying, which was significantly more than what I was actually making. It makes it difficult to create potential working relationships with people you already have a good history with. I would love to get into project-based work, but I don’t know how or where to find it.
Sarah–here’s a question–have you written about how to find that kind of clientele or projects on Scriptorium’s blog? If so, let me know! I’d be happy to read it to learn more.
I truly appreciate the input! Seems like this contracting/freelance thing is not so easy to do–or easy to do where you can truly take off! Or, for whatever reason, there are things that are eluding me to be able to make a true go of it.
It’s easier said than done, but all of these considerations need to go into your rate negotiation. You know very well that the agencies are offering a rate that is too low. So your job is to push back. (Additional complication: If a contract is for, say, six months at 40 hours per week, then your hourly rate can be a bit lower because you don’t have to chase more work during those six months.)
My position is that the agency or agencies are not my problem. We have a rate and that is the rate. If they want to mark up our rate twice, fine.
In order to set up as a true independent (that is, not working through agencies), you’re going to need the following:
* A business structure. These days, it’s very difficult to get work as a sole proprietorship. An S corporation or LLC gives the client the idea that you are serious about being in business.
* An annoying variety of business insurance.
* Two or more clients
My recommendation is to take the agency gigs as appropriate to keep the lights on. Look for some combination of good rate, interesting work, new skills, and/or networking potential. Consider working through specialist agencies rather than Big Box agencies.
Meanwhile, look for independent gigs. Maybe take a part-time gig through an agency while looking additional freelance work.
It is challenging to get up and running, and although the challenges change, they don’t ever end. 🙂
This is fantastic advice, Sarah. THANK YOU! It’s hard to push back with the agencies. I’ve found that when I have tried, they are already at the top of the budget that the client will go, and most of these are corporate clients. And these are companies with money! But nope, the companies won’t budge, so it’s either take it or leave it. I won’t entertain some jobs that agencies call me about because the rate is too low. I remember one recruiter calling, and I said that for the requirements they wanted, they were evidently trying to find a young college graduate so they didn’t have to pay a “normal”, more reasonable rate. She actually agreed that she felt that the rate was too low, but this was the limit that she was given, and she had to work with it for that particular job.
I’m hoping that perhaps with the current position I just started, perhaps in time–once I’ve proven myself–I can parlay that into a raise and more telecommuting. They are doing telecommuting part-time with the entire staff as they don’t have enough desk space for all the people in the group, but they are remodelling sections of the building to accomodate the entire group later. So right now, we have desk sharing–certain days on, certain days off. I’m going in every day right now and just trying to find an available space if someone decides to work from home anyway, since I’m still learning and establishing myself there. It’s hard to say. I actually miss working from home and doing my own thing from there. Again, I think the trick will be finding these smaller gigs. I’m open to having multiple smaller gigs, but I need to figure out where they are hiding.
Will you be at the STC Summit this year? If so, we’ll have to try to catch up in person to discuss more in detail. 🙂 I’ll bring chocolate. 😉
Tempting, the chocolate thing, but no Anaheim for me this year. Call me if you want to discuss by phone instead.