£40 an hour contract or £38k pa permanent....what would you do ?

[bringmeashrubbery]

DP just been offered a contract position (12 months) at £40 per hour . He is currently in a stable permanent 'job for life' at around £38k pa. Should he take the contract position or what ? It's IT by the way...

My dh is in IT, is 47 this year and has been contracting for more than 13 years. The winning solution is to make sure you have at least 6 months to a years income stashed for in case there is a slump in the market. We survived the dot com crash, the recent depression and we are still debt free and he has no problem finding new work.

A bit of advice will be that in the IT industry your skills stagnates when you stick to one job for too long, technology improves all the time and to keep up with technology contracting was the only option for dh, he always says that contract work is prostitution, your boss leaves the cheque by the door and there is no loyalty either way, but the freedom of it is worth it.

M2FD - I agree wholeheartedly about keeping up with latest developments. DP has to really fight to get any training at all where he is and it's crucial for him to keep up to date with the latest packages. I think we would play it safe and stockpile cash in case we need it. Plus I will continue to look for work anyway, as a back up.

if you can afford the uncertainty, I'd take the contract. I'm in IT and would love to have tried contracting, but although I'd like a new job now I feel I've kind of missed the boat now I have dh, dd and a large mortgage! Out of interest, what field of IT is your dh in bmas?

What dh did was to register with a few online recruiters and they continue to contact him with any possible positions, he also registered with websites that does skills testing online and keep a score of your abilities which it available to possible employers to look at.

I was an IT contractor for a good slab of my career, and am now a pimp...
I actually claim credit for popularising that term in the early 1980s when I saw the view Mum2FunkyDude talk about.

With my pimp hat on, I suspect that he can get more than 40ph, but that depends a lot on what he does... ?

I must say I would need a lot of convincing that any job was "for life". Seen a lot of "lifers" looking for jobs.

I can't imagine any IT job is that way, including the Civil Service or a large firm.

Also he stands a good chance of being forcibly outsourced, keeping his current job, but for a different employer on worse terms.
All jobs, especially IT ones go out of date quickly, and as a contractor, you can make it less bad. That costs...

He needs to join whatever user groups exist for his speciality.

Those who talk of making very sure you have a reserve of cash are 100% right. It goes up and down, occasionally quite violently.

I guess I averaged 40 paid weeks a year, so I'd equate that to 65K per year.

He also needs to diversify a little. I have a habit of pushing Excel at people. There is an amazing shortage of competent Excel drivers. The money isn't wonderful (last one we did was 450 per day), but it can get you though rough patches.

A good accountant is pretty important, I've had the same one for more than 10 years, (Barry Whiffen), and can furnish contact details if you want.

Really DC I am surprised at that re excel.

ChocolateSucksWithoutSugar - PMSL as I totally misread the op - thought it said he was moving from £38 per hour to £40 per hour!

What a div! You'll have to put it down to the fact that I spent too amy years as sahm and my brain has turned to scrambled egg.

It surprises a lot of people bozza.
There are some very competent Excel users, but that's when it's part of another job.
However there are very few people who specialise in Excel who are any good. Indeed, Excel users are on average so dangerously incompetent that there are academic conferences devoted to trying to measure the harm, and perhaps mitigate it.

PMSL at conferences about incompetent excel users. I have come across one or two in my time.

Is your advice just south east based though? Would it be any good looking into excel for me based in Yorkshire and part time?

... contract work is prostitution, your boss leaves the cheque by the door and there is no loyalty either way, .

This is a fairly common analagy of IT contract work and often used.

I'd take the contract work. As a freelancer I much prefer not being part of a company 'marriage' - I prefer having affairs!

I will confess that I'm pretty vague about the market in the North East, but the impression I get is that Excel is probably the best skill for part timers in IT.

The prostitution analogy is good, but often does not go far enough. I see jobs as a bit like relationships.
Contracting can be a bit like casual sex, or indeed it can be mercenary.
A lot of promises are made in employment and "secure employment" sounds remarkably like "till death do us part". Sadly these are often broken, or people get better offers.
Outsourcing is just the other side of the coin.

Jobs like relationship can be quite one sided, and often one party has too much power.

It's also the case that many people spend more time with the person sitting next to them than the one they sleep with.

A big factor which we can't tell from here is how good DH is at interviews ?

Depends on contract. If for 7.5 hours a day 5 days a week - i.e. a continuous flow of work - and holidays are feasible then yes. Would also read the contract with a fine toothcomb particularly over exclusivity and being able to get another job in the same industry straight after and also having time to line up next job whilst finishing off this one.
Would also say though that £38k seems quite low for IT so it would be worth going out onto the job market and having a poke around. Particularly if he's got experience he can probably get another £10k on that, though you don't say what exactly he does. (Dh is trying to recruit at the moment and the number of good people out there is really quite low, from what I understand.)
I'd also actually calculate everything dh gets in terms of salary + benefits so you can do a proper comparison.

Good point, if bringmeashrubbery wants an ex-con turned pimp to case a an eye over the contract let me know.
There is a shortage of good people, and easily the most dumbed down degree in the UK (in fierce competition) is Computing, so the people entering the market are remarkably unfit for purpose.
Contracts are highly variable in length, and DH should keep an eye on the market. I assume he reads jobserve ?

I was an IT headhunter a few years back and one of the lines I often used in trying to convince someone to take the step towards contracting was the fact about "salary perks". Salary perks, share options...is all just a pie in the sky, keep you happy and in the meantime you get paid pit-tens. I think Bringmeashrubbery's dh should also clearly think if he can live with the stress of contracting, very occasionally contracts are lost and you're without work without being able to claim much compensation. However, one thing I can say is that in a permanent position your boss' loyalties are also only as strong as the money that is available to keep you.

LOL I sign contracts after skimming over the hourly rate and notice period either way. They are not worth the paper they are written on so I don't read the small print.

CONTRACT!!!!

Thanks for all your comments and support. SOrry I have been away from the pc for a while.
We (dp) have decided to go for it ! So we should be quids in shortly which will be a great relief after having a bit of a rough time financially. In answer to your questions, he mainly does Exchange, anti-virus, server support. DC thanks for your helpful advice and kind offers also. Will certainly bear you in mind if we get stuck !

If he's an Exchange person then he should seriously consider becoming a Microsoft partner, as a consultant, he's eligible.

This gets you a very cheap copy of Exchange and a bunch of other MS products, 200 quid a year.

Also, although I'm assuming that DH knows Exchange well, he should look at the support programmes that allow him to ring MS with technical queries. Can be used to make him look good when others have broken something, and of course insurance if he gets blamed.
You don't need to buy one until you need it, but at 60-70 quid very good value.

Also I would counsel him, once he's got his new contract signed, to have a word with his old boss. They are now minus an Exchange expert, so perhaps he can negotiate a deal to help out occasionally. Don't know the odds, but I know some contractors for whom this has been incredibly useful, and as a former IT director I've done these deals which are much cheaper than a full time guy, good for everyone.
Also if he's in London there are various contractor beer sessions.

DC Why?, I am one and I don't ... what a waste of £200 after spending all day on the same software the last thing you want to do at home in tinker with it a little more!

Chocolate - how do IT contractors become self-employed? Has the IR relented?

Dp and myself are ex-contractors and no way since 1983 were we ever able to get self-employed status. It had to be a limited company and double NI contributions - only dodgy accountants ever saw a loophole to get round this.

Dp gave up contracting after 20 years as his skills were becoming obsolete. He now gets £35k as a permie but we seem to be better off somehow plus I don't have to do the wretched books any more. We are getting on a bit though and looking towards retirement so it suits us.