Comparing Employment Relationships

I periodically re-evaluate my career, and my current position, and try to decide A) Should I change, and B) What sort of change should I make? One part of evaluating options is looking at what type of employment suits you better: Employee, Consultant, Contractor.

I’ve been around a little while now, and I’ve worked in all of these types of roles, for a number of companies. They all have good and bad points, and you’ll find that the right employment relationship probably varies at different stages in your career.

Here’s a few thoughts on the pros and cons of each.

Permanent Employee

This is the traditional employment relationship, where the expectation is that you will continue to work for this employer for the indefinite future. Of course, you don’t have any real job security, but we all like to play make-believe sometimes.

Pros:

• It’s your network. Yours. You can learn every nook & cranny, draw the whole thing off the top of your head, including IPv4 AND IPv6 schema. You know where the bodies are buried, which systems are robust, and which ones you must NEVER touch on a Thursday.
• If the organisation is big enough, you can move around within the company, to keep engaged, and up to date with shifting technologies/interests. Good employees will be supported in this.
• Related to above: Good employers will help with training to adopt new systems
• Continuous improvement: you can keep polishing systems, automating this little piece here, tidying up that nasty little hack there. Output is more important than time spent on a task. You’re not under pressure to allocate every minute of the day to a billable project.
• May even get your own desk (if you’re into that sort of thing).

Cons:

• Might be limited in technologies and systems - e.g. most companies only upgrade their core network once every 5 years. You could get out of touch with technical skills. Or what if you’re a Unix admin, and your company goes all Microsoft?
• Company politics is a tough game to play. Don’t expect to be able to ignore it.
• What if you don’t like Bob that sits next to you?

Consultant

Consultants are usually directly employed by one firm, but then work for many clients on short-term engagements. They may work for several weeks at a time at one site, or they may have multiple ongoing relationships - e.g. 2 days/week at client A, 1 day/week for each of clients B & C, and another day trying to get more work at client D.

Pros:

• You’ll move around often, seeing a range of companies. You’ll find that companies can work very differently. Hopefully you can take something from the best ones, and apply it elsewhere.
• Chance to use the latest technologies, and work through tricky transitions, upgrades and cutovers. People bring you in because they’re Doing Stuff, or there’s a major cock-up that needs fixing. You learn a lot, quickly. This is a great chance to build up your CV.
• Doesn’t matter too much if you don’t like the current client - you’re moving on soon anyway.
• Seeing the sales cycle up close might repulse you, but you’ll also learn something useful.

Cons:

• You will be under pressure to only do enough to get the job signed off, so you can move on. There’s always ways a system can be improved, or added to. You’ll be left with a nagging sense of leaving things “not quite finished.”
• Billable hours. You will be filling in time sheets every day. Any time someone interrupts you to chat, you’re thinking “What project can I bill this to?” Timesheets are one of the reasons lawyers are so unhappy. If business is slow, daily measurement of utilisation/billable hours is very depressing, since you are not measured on output, only hours billed. If things are busy, you’ll be double-billing. Billable hours are probably the single biggest challenge I have with consulting.
• You’ll have to learn to cope with “imposter” syndrome, where you are wheeled out as The Expert for a product that you’ve only read the data sheets for, and seen once in a lab, looking over someone’s shoulder.
• You never have your own desk. You use whatever’s spare. Other people’s desks are filthy. Really filthy. Plus, you get the squeaky chair. “The one with mysterious stains straight up the center of the seat”

Contractor

Contractors spend longer periods at a single customer site. Often they will be employed on 3- or 6-month terms, which may then roll over several times. Often the contractor works directly for the end-client (or through an agency/umbrella company). This form of employment is more popular and better rewarded in certain markets - e.g. The UK. Contracting is less popular in other markets, where contractors are paid a low risk premium, and contracts are usually seen as ‘trial’ periods for permanent roles.

Pros:

• You can spend long enough at a site to really understand the systems, but you’re not stuck, and can still move around and see different companies. You’ll also keep a healthy degree of separation from company politics.
• There’s frequent, clear recognition of a job well done: The client wants to roll over the contract.
• Can be very financially rewarding, with significant tax benefits - e.g. Claim your rent as tax-deductible for short-term gigs. Because you’re not subsidising sales people and a flashy office, much more of the daily rate flows straight through to you.
• The cash + the flexibility can let you lead a more interesting life - e.g. over a 5-year period, I chose to work less than half the time, spending the rest of the time travelling the world.

Cons:

• Can be difficult to get into new technologies, as you are employed for what you know, not what you can learn. You will need to pay for your own training.
• Higher risk - you will be the first to be let go in a downturn. Does not suit people with mortgages and young children.
• You’ll be talking to IT Recruiters frequently. There’s a reason that recruiters have a poor reputation. It takes a little while to find people you can trust - there’s a lot of shady characters and bullshit out there. Good recruiters do exist though.

All this ignores the culture within each firm you might work for. That’s something that can be difficult to ascertain from the outside, and even then, culture varies within an organisation - the team is probably more important than the company. Mike Bushong writes well on this topic at the Plexxi blog. If you’re consulting or contracting, the culture is probably less important anyway.