[SATLUG] job opportunity in NYC

[John Pappas]

On 9/26/07, Brad Knowles <brad at shub-internet.org> wrote:
> On 9/26/07, Don Wright wrote:
>
> >  $70/hour
> >  x  8 hours
> >  x 22 working days per month
> >  x 12 months
> >  -----------
> >  $147,800 per year
>
> That's still really low.

IIRC that is Pay rate, not Bill rate.  Rarely will a
contract/consulting company tell you the Bill rate.  Depending on
duration and niche of the skillset, the delta from total burden
(Pay+FICA+Benefits+Other HR costs) will be always be greater than 40%,
and can be over 100% if the skillset is rare or difficult.

> When I was working at Collective
> Technologies (back in '97), they billed me at $100/hour for
> general-purpose Unix system administration work, and $125/hour if I
> was working in one of my specialties.  And that was the standard
> nation-wide rate, not adjusted for higher-cost areas like NYC.
> They'd probably add 50% or more to that rate for the more expensive
> places.

Bill rates for senior skillsets are very often 3 digit.  You can
assume a burden rate of about 50-60% of that, so a bill of 100/hr will
probably pay (W2) about 40-45/hr.  If you choose to take on additional
responsibilities (1099) you can probably gross 50-60, but then have to
pay for your own bene's, E/O insurance, and any bonding you may need.

> I've been looking very closely at setting up my own consulting
> business.  From talking to a variety of people who've done this, and
> all the books and everything else I can find, it looks like you lose
> about 50% of your billing rate due to overhead for things like
> personal and professional insurance, and various other things that
> employers have to deal with that employees don't ever hear about or
> see on their pay stub, and then you lose another 50% of the remainder
> due to taxes and other things that typical employees would see on
> their pay stub.

This is a very difficult thing to do (both my wife and I are doing
this now), and the luxury of the W2 life becomes quickly apparent.

There are 2 tracks to this market: Running consultants and Being the consultant.

My wife is a freelance Java/C++ Software Engineer (the latter), so all
marketing and business development falls squarely on her shoulders.
This side of the industry relies heavily on interpersonal networking
and relationships, as a single person's time does not scale beyond 24
hours a day, so many either leverage a consulting shop (the former
side of the market) or hire other external marketing.

My side of the market--running consultants--is hard for the same
reasons, but with the added difficulty of having to find the proper
talent to work the gig.  In my experience, finding the gig is MUCH
harder than finding the talent to perform that work.

> And that's assuming you have full-time employment for the entire
> period, which is usually not a valid assumption for most
> contractor/consultants.

You are rocking if you are >75% billable (minus those Consultants that
bill 100% of their time to a single client).  The usual average is
50-60% billable hours (of 40/week or 160/Month).

> When calculating what I would expect to have to charge as an hourly
> billing rate based on how much I want to take home per year and how
> much I anticipate that I'll be able to work, I figured I'd have to
> charge anywhere from $150-250/hour, depending on the nature of the
> work and the customer's willingness and ability to pay -- a
> longer-term contract would get a lower rate, due to the higher
> guarantee of percentage of employment over the period.

That is exactly the deal.  Usually, travel will be billed in addition,
so a freelancer will be responsible for the other logistics costs
mentioned above.  Again, the finding of the gig is key to success.
There are no easy six figure jobs, regardless of for whom you work.

> So, at the very least you have to chop any number you calculate in
> this manner in half, just to account for all the things that an
> employer would have to deal with that regular employees would never
> see.  Ironically, that would make the annual salary equivalent about
> $70k, and as SCS said this is a very, very low pay rate for the NYC
> area.

Agreed.


> Just make sure that when you compare salary rates for a given type of
> position for a given region, that you take into account all the extra
> costs that a contractor/consultant would have to pay, and effectively
> double (or triple, or quadruple) the base salary rate in order to
> work out what you'd need to bill as a contractor/consultant in order
> to actually take home the same amount of money.

Yep.

John