Long term consulting?

[Carrie Cobol]

So I have a job lead that sounds very promising.  Niche industry that I have some experience with.  But it's a long term contracting gig, not FTW, and with no specified end date.  I'd be paid by the staffing company but working at the customer site.  The staffing recruiter already sent me benefit info and said that they don't have paid vacation, so I'm aware of that difference from FTE status.  Aside from the unpaid vacation, the benefits are pretty equitable with what I have currently.  I was wondering if you guys could tell me any other pitfalls for this kind of setup.  Would it be like working for two bosses?

[pxsant]

Would it be like working for two bosses?

Not really.   You will likely never hear from the agency guy/gal except to make sure you turn in time cards since that is how the agency gets paid.  Beyond that, they couldn't care less what you do.

The only person(s) you have to please are the people at the account.  Their view of you will determine how long the gig lasts.  But, of course, budgeting issues could end your gig even if they love you.

The basis of a contracting gig, even if W2 to an agency, is you don't work, you don't get paid.  Vacation from an agency??  You are kidding right?

[Carrie Cobol]

I understand about the vacation deal - no work no pay.  It's not what I'm used to, but I can hang with it.  Or are you saying that there is some sort of pressure also, to not take time off? 

It seems like an odd setup to me.  The customer company needs people to do this work, but instead of paying fte's, they pay more to a staffing agency?  Weird, but whatever.  I think I'll go ahead and interview for it at least to get more information about the job.  It's not software development, but more into telecommunications which is interesting.  Lots of technological changes in that arena.

[The Gorn]

Businesses choose contractors for a variety of reasons, typically:

• Their planning horizon is very short. They are not certain that funding will last for an activity. Or they want to see how something goes before committing to a permanent hire.
• The money for the thing that the contractor is doing comes from a different budget than for FTEs.
• They have been burned multiple times by candidates for this role, so they want the ability to drop the person immediately without affecting their unemployment claim history, etc.
• They don't believe that they can find an FTE with the desired skill set.

[The Original Henry]

Just don't sign anything that says you'll get paid when they get paid. Not only is it grossly inappropriate but you will likely get screwed at some point if you do.

And don't fall for the line that the agency has a standard contract and you have to sign it. Think for yourself - if something in the contract is unfair or un-agreeable to you then cross it out before you sign it.

[TRexx]

Businesses choose contractors for a variety of reasons, typically:

• Their planning horizon is very short. They are not certain that funding will last for an activity. Or they want to see how something goes before committing to a permanent hire.
• The money for the thing that the contractor is doing comes from a different budget than for FTEs.
• They have been burned multiple times by candidates for this role, so they want the ability to drop the person immediately without affecting their unemployment claim history, etc.
• They don't believe that they can find an FTE with the desired skill set.

What he said, and,

• Contractors get no paid time off
• Contractors don't get health benefits
• Contractors can be let go with no warning, no reason and no severance. (Yes,  I know that applies to FTEs as well, but many companies have policies that make termination of an FTE difficult and/or expensive)

And then there are the situations where a company makes a "strategic business decision" to outsource some tasks to a "firm that specializes in this technology"  which happens to be owned by the CxOs brother-in-law. 
 

[Carrie Cobol]

Thanks, all good tips.  Will the staffing company also help me in the unlikely event someone at the company starts beating on me, say I end up reporting to a bully or something?  I can stand up for myself since I am a professional, but at some point it's good to have backup.  Also do the staffing companies get annoyed if later on down the line the customer company offers to hire me on as a direct fte?  Or if the customer needs to let me go for whatever reason, is the staffing company likely to keep me on and find another gig for me, or will they just let me go also?

[TRexx]

Thanks, all good tips.  Will the staffing company also help me in the unlikely event someone at the company starts beating on me, say I end up reporting to a bully or something?  I can stand up for myself since I am a professional, but at some point it's good to have backup.

The answer is "it depends". When I was a PHB at a consulting company, part of my job was to defend our troops from bullies.  One time we pulled 13 salaried employees off a project because the manager was a [expletive deleted].  But that was a long time ago when most companies actually cared about their employees.  It has been my experience lately that as pxsant said, all they care about is revenue.  And when there is a conflict between a contractor and a client, especially a big client, they will drop the contractor like hot potato.   (I've even seen clients force a vendor into such a position just to remind them who holds the power)

Of course, unless you work they don't get paid, so the smart ones will try to keep everyone happy.

Also do the staffing companies get annoyed if later on down the line the customer company offers to hire me on as a direct fte?

Yes they get annoyed but to them it's just a cost of doing business and usually the client will pay the vendor a fee.  It's possible that the vendor could try to prevent you from taking an FTE job with the client, but the client can always take his business elsewhere.   

One thing you have to be careful about is non-compete clauses.  Generally speaking they can't stop you from becoming an employee, but they can prevent you from contracting directly with the client.  I was involved in two such casses. In both we sued, won and collected damages form the employee turned contractor.

Or if the customer needs to let me go for whatever reason, is the staffing company likely to keep me on and find another gig for me, or will they just let me go also? 

Keep you on?  That is pay you when you are not working?  Highly unlikely.  But they are motivated to find you another gig since they have already made an investment in getting you on board.   




     

[Richardk]

It sounds like you will be an employee of the broker and not a sub. That's a whole other can of worms.

Yes, make sure you get paid regardless of when the client pays the broker.

Also remember, the relationship is between the broker and the client. You just happen to be making money for them but in the end the broker will always side with the client instead of you.

Full time offers are always worked into contracts, so don't worry about it. If it happens, they will work it out.

Finally keep you on? Unless you become part of their staff, it's extremely unlikely. As mentioned, you might be called back for another gig if it's a good fit but that's about as far as it goes.

[pxsant]

Just don't sign anything that says you'll get paid when they get paid.

If you have not worked with the agency before or if you don't trust them, then work only as a W2 to the agency, not a 1099 or C2C.  They can't screw with a W2's pay regardless of whether they get paid by the client.  Too many potential Fed and State legal problems.

[pxsant]

Also do the staffing companies get annoyed if later on down the line the customer company offers to hire me on as a direct fte?  Or if the customer needs to let me go for whatever reason, is the staffing company likely to keep me on and find another gig for me, or will they just let me go also?

Most contracts you will sign with the staffing company prevent you from accepting a FTE position without the staffing company permission.  Also, the SC's contract with the client usually says that if they want to hire you as a FTE, they will pay a high placement fee to the SC, on the order of 10% to 20% of your yearly salary.

Read the contract from the SC BEFORE you sign.

[Richardk]

Just don't sign anything that says you'll get paid when they get paid.

If you have not worked with the agency before or if you don't trust them, then work only as a W2 to the agency, not a 1099 or C2C.  They can't screw with a W2's pay regardless of whether they get paid by the client.  Too many potential Fed and State legal problems.

Read the entire contract. While they can't link your pay to when the client pays, they can link it to the clients approval. I got screwed by this once.

The job was a W2 assignment but the contract clearly stated that the client must sign my time sheet before I get paid. I worked the hours but even the state said that they couldn't enforce payment without a signature. The client didn't dispute my hours, the work, nothing. They just didn't want to pay me anymore. They were treating my work like some kind of fixed bid project. They wanted me to finish it but no more pay.

The state said the client disputed nothing and per the contract, there was nothing they could do to get my pay.

So ask the agency what happens if you work the hours but they don't sign the time sheet?

Also request for a backup "authorized signer" for your time sheets. Some managers are so busy, out of the office or on vacation that getting paid can be an issue. I had one assignment where the guy was out so much that my pay was a month behind. Once again, another broker treating that signed time sheet as client authorization to be invoiced for your worked hours. Note it's not tied to when the client pays the bill but to when the client authorizes or approves the hours worked.

I've never seen anything so crazy. For 10 years prior to first seeing this, we didn't care about signed time sheets since the contract "authorized" the work but I guess that's the difference between being a consultant and a contractor.

[pxsant]

Read the entire contract. While they can't link your pay to when the client pays, they can link it to the clients approval. I got screwed by this once.

The answer to that problem is simple.

If the client refuses to sign your time card, you simply do not go back.  Refer the problem to your agency.  That is their job.  If you don't work, the agency does not get paid.

[The Gorn]

The answer to that problem is simple.

If the client refuses to sign your time card, you simply do not go back.  Refer the problem to your agency.  That is their job.  If you don't work, the agency does not get paid.

I am familiar with this situation, I think, because I corresponded with Richard when it was happening.

The client did this at the end of the project. They weren't expecting him back anyway. They imposed a haircut of the last payment as a reward for a job well done. 

[Aussie]

"Also do the staffing companies get annoyed if later on down the line the customer company offers to hire me on as a direct fte?"

Some agencies offer a deal whereby, if you work for a firm as an agency bod for X number of months, they will then allow you to transfer over to FTE for no cost.  More likely to happen with a small agency than with the Borg Collective types, but still posssibly worth raising before anything is signed.