Going from full-time to contract work?
April 16, 2009 9:47 AM Subscribe
A friend of mine is giving his notice tomorrow due to long hours and high stress not being worth it in the end. He would, however, be open to returning as a contractor or part-time, with limited hours and role. How does this work?
The friend is pretty highly credentials (masters in finance and CPA), with both "Big 4" and corporate experience totalling about 6 years. He's fairly indispensable in his current role, which just makes it more stressful. He's already tried to get some of the tasks off his plate (for over a year at this point), with no success, and the company, like many, is in a hiring freeze so there's no relief coming. However, if he could lock in 16-20 hrs/week, maximum, to do the truly important tasks, he'd be ok with that. That being said:
Is coming back as a contractor something he should offer while tendering his resignation, or should he hope that the boss brings it up?
It seems like in this situation, working part time could eventually lead to full-time hours at part time salary, and contracting would be a better way to contain the hours. Is that a reasonable interpretation?
Is it better/easier to contract directly with the company, or go through a third-party firm?
What hourly rate can one expect? He's in a Seattle suburb at a rather large manufacturing company (no, not boeing :)), if that helps.
Thanks all!
The friend is pretty highly credentials (masters in finance and CPA), with both "Big 4" and corporate experience totalling about 6 years. He's fairly indispensable in his current role, which just makes it more stressful. He's already tried to get some of the tasks off his plate (for over a year at this point), with no success, and the company, like many, is in a hiring freeze so there's no relief coming. However, if he could lock in 16-20 hrs/week, maximum, to do the truly important tasks, he'd be ok with that. That being said:
Is coming back as a contractor something he should offer while tendering his resignation, or should he hope that the boss brings it up?
It seems like in this situation, working part time could eventually lead to full-time hours at part time salary, and contracting would be a better way to contain the hours. Is that a reasonable interpretation?
Is it better/easier to contract directly with the company, or go through a third-party firm?
What hourly rate can one expect? He's in a Seattle suburb at a rather large manufacturing company (no, not boeing :)), if that helps.
Thanks all!
If he wants to change from fulltime to a part-time contracting role, he should present it as that rather than as "I'm resigning." The company may or may not go for it, it really depends on his role and the company itself, but he'll have much better chance of it working out that way than if he quits and then hopes to get rehired as a contractor.
He should not try to go through a third party, it'd just be silly to add a middleman if he's already employed there (and would cut into the amount of money he could expect to earn, as well.)
It seems like in this situation, working part time could eventually lead to full-time hours at part time salary, and contracting would be a better way to contain the hours. Is that a reasonable interpretation?
If he's hoping that he can basically keep his same job or some subset of it at the same pay but at shorter hours, then no, not really reasonable or likely to happen.
It doesn't really sound like your friend actually wants to be a contractor -- I really think he'd be better off going to his boss and saying "Hey, I really need some changes in my work situation; it's gotten bad enough that I'm getting close to resigning." If he's really indispensable, they'll work with him to make the role livable rather than losing him completely. Bringing up contracting as an option is just going to confuse things and wouldn't necessarily achieve what he wants to achieve.
posted by ook at 10:12 AM on April 16, 2009
He should not try to go through a third party, it'd just be silly to add a middleman if he's already employed there (and would cut into the amount of money he could expect to earn, as well.)
It seems like in this situation, working part time could eventually lead to full-time hours at part time salary, and contracting would be a better way to contain the hours. Is that a reasonable interpretation?
If he's hoping that he can basically keep his same job or some subset of it at the same pay but at shorter hours, then no, not really reasonable or likely to happen.
It doesn't really sound like your friend actually wants to be a contractor -- I really think he'd be better off going to his boss and saying "Hey, I really need some changes in my work situation; it's gotten bad enough that I'm getting close to resigning." If he's really indispensable, they'll work with him to make the role livable rather than losing him completely. Bringing up contracting as an option is just going to confuse things and wouldn't necessarily achieve what he wants to achieve.
posted by ook at 10:12 AM on April 16, 2009
I am freelancer and this sounds similar to an arrangement I have with some companies.
I would suggest that he be honest with his employer and give his reason for leaving: in order to achieve reduced hours he is going to be an “independent contractor”/freelancers/communications specialist, or whatever title he is selecting. The company can connect the dots and offer something if they can.
Now what really happened for me when I did something similar to the above: the company could not hire me part time or for contract work – along with the hiring freeze, they were not budgeting for any freelance work (also frozen).
However, in the 2 weeks before I left, I contacted any of my old work colleagues and told them that I was looking for independent work/freelance work – and one of my main clients is from a company that gives me anything from 10 hours/week to 40 week/depending on the project.
The projects are completed for a particular rate (and the company, if they need to in certain circumstances, pays me per hour in some cases) . I have the freedom to say yeah or nay. I will be honest and say, though, that I have ended up working harder than at my last job but that is because I accepted multiple projects from multiple people and companies.
My arrangement limits the hours (it is my choice if I decide to take or not take a project).
I have found it easier to contact companies myself – if you use someone else, they will take a cut, or take a cut forever just for the privilege of introducing you to the company.
Rate – heck, we can’t give you the rate for an industry we don’t know. However, for myself, I calculated what my company was paying me per hour (including benefits, vacation, etc) – a couple companies are paying me for twice that amount per hour. Please realize that it does not mean you will automatically get 40 hours per week, though. Your friend may want to contact any old contacts who have worked with contractors and ask what they pay for projects/hours – I did this before I made the jump.
Oh yeah, if your friend has time, google the type of company (lets say “engineering companies”, “computer companies” and the word list – I got a few lists with hundreds of emails listed. I sent letters introducing myself to these companies, and a few are still calling me back (he doesn’t need to work for his company – he can do that for any company, anywhere in the country). Also, use linkedin- make it very specific as to skill set and that he is an independent contractor or whatever. The clients will find him if he does this well .
Good luck.
posted by Wolfster at 10:21 AM on April 16, 2009 [1 favorite]
I would suggest that he be honest with his employer and give his reason for leaving: in order to achieve reduced hours he is going to be an “independent contractor”/freelancers/communications specialist, or whatever title he is selecting. The company can connect the dots and offer something if they can.
Now what really happened for me when I did something similar to the above: the company could not hire me part time or for contract work – along with the hiring freeze, they were not budgeting for any freelance work (also frozen).
However, in the 2 weeks before I left, I contacted any of my old work colleagues and told them that I was looking for independent work/freelance work – and one of my main clients is from a company that gives me anything from 10 hours/week to 40 week/depending on the project.
The projects are completed for a particular rate (and the company, if they need to in certain circumstances, pays me per hour in some cases) . I have the freedom to say yeah or nay. I will be honest and say, though, that I have ended up working harder than at my last job but that is because I accepted multiple projects from multiple people and companies.
My arrangement limits the hours (it is my choice if I decide to take or not take a project).
I have found it easier to contact companies myself – if you use someone else, they will take a cut, or take a cut forever just for the privilege of introducing you to the company.
Rate – heck, we can’t give you the rate for an industry we don’t know. However, for myself, I calculated what my company was paying me per hour (including benefits, vacation, etc) – a couple companies are paying me for twice that amount per hour. Please realize that it does not mean you will automatically get 40 hours per week, though. Your friend may want to contact any old contacts who have worked with contractors and ask what they pay for projects/hours – I did this before I made the jump.
Oh yeah, if your friend has time, google the type of company (lets say “engineering companies”, “computer companies” and the word list – I got a few lists with hundreds of emails listed. I sent letters introducing myself to these companies, and a few are still calling me back (he doesn’t need to work for his company – he can do that for any company, anywhere in the country). Also, use linkedin- make it very specific as to skill set and that he is an independent contractor or whatever. The clients will find him if he does this well .
Good luck.
posted by Wolfster at 10:21 AM on April 16, 2009 [1 favorite]
I've done this myself. The thing is not to say "I'd work part-time" at all. Leave that off the table.
As others have said, the way to do this is to say, "I need to leave this job, because I'm going to go into business for myself as a consultant. I'd be delighted to have {company} as a client, though, because {flattering things about company}."
Either this will appeal to them or it won't. If it does, it's going to be incumbent on him to set new boundaries vis-a-vis his hours, because human beings are creatures of habit, and his former supervisors will still think of him as being an employee and plan accordingly.
posted by Sidhedevil at 10:31 AM on April 16, 2009
As others have said, the way to do this is to say, "I need to leave this job, because I'm going to go into business for myself as a consultant. I'd be delighted to have {company} as a client, though, because {flattering things about company}."
Either this will appeal to them or it won't. If it does, it's going to be incumbent on him to set new boundaries vis-a-vis his hours, because human beings are creatures of habit, and his former supervisors will still think of him as being an employee and plan accordingly.
posted by Sidhedevil at 10:31 AM on April 16, 2009
Interestingly, I've known people who have gone both routes. Those that one were an employee and then became a contractor and those who have decided they needed fewer hours and went part time. Both were employees of big 4 firms, so it's obviously possible.
Now, whether it'll happen in this economy? Who knows. Perhaps they would be happy to reduce their payroll expense by having your friend go part time.
posted by wierdo at 8:31 PM on April 16, 2009
Now, whether it'll happen in this economy? Who knows. Perhaps they would be happy to reduce their payroll expense by having your friend go part time.
posted by wierdo at 8:31 PM on April 16, 2009
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In the past, I've done it solo, without a third-party firm - I've only used third parties when I didn't already have a personal relationship.
Be aware the company may have policies preventing this.
No idea what market rate is in your area for this kind of work, but the general rule of thumb for freelancers is:
hourly rate = 1.5 * ( ( full-time annual salary ) / 2000 )
So if he was making $50,000/year, he'd want to charge around $37/hr. Mind you, the multiplier varies between 1.3 and 1.5, depending on many circumstances. It exists to cover the fact that you're taking on freelance risk/uncertainty, have to pay more in taxes & social security, and heck, you're good-looking and deserve it. :)
posted by swngnmonk at 10:03 AM on April 16, 2009 [3 favorites]