Ask the Headhunter

Q&A: Should I take a contracting job?
By Nick Corcodilos
EE Times
(07/31/01, 3:00 p.m. EST)

M.M. writes:

I'm and electrical engineer with 18 years' experience. For the second time in my career my horse has been shot out from under me (I've been laid off).

I'm now faced with an offer from a contact engineering company. I've never worked this way before and find it a little spooky. The contract-engineering firm has been around for 40 years, so I'm not worried about its stability. The contract would be with a major automotive company, and I'm not worried about the company either. What concerns me are my rights as an employee of the contract engineering company. It is an at-will job, which I understand allows either party to discontinue my employment at any time. Where can I find information and/or discussion of issues regarding work as a contract engineer?

How much of my benefits are negotiable (salary, relocation, insurance, etc.)"
Do you have any tips on working this way (contract vs. direct)?

Thanks.

Nick replies:

Contract engineering is becoming more common, as companies try to insulate themselves from the risks of "fixed costs" (such as salaries for permanent employees). Please review the basics of contract work in my article " Tips on the Contracting Game." It's by no means exhaustive, but it will help you get a handle on some of the issues, and it will help you formulate some good questions to ask about the opportunity you are considering.

Contracting need not be spooky. If the contracting firm is good, it should be able to keep you employed and "off the beach," even when the project for which you are originally hired ends. It's up to you to make sure you understand the extra costs you may incur as a contractor. For example, benefits may not be as good as with a regular employer; you may be required to pay some of your own taxes (depending on how the contract firm handles this); and there won't likely be any severance if and when you are let go. This means you must negotiate a compensation package that indirectly covers those extra costs.

Consider also that there are benefits to contracting: certain independence at your assigned company (you don't actually work for them; you're assigned to them); you may get extended "vacations" between assignments (is that a silver lining?); and you may enjoy more variety in your work. Some engineers may consider these disadvantages. It depends on your perspective.

Contracting is definitely a different way of working, but it can be very satisfying it you work for a good firm. That's why it's critical to check references (even if the company has been around 40 years). Talk with a few of their client companies and with some of their engineers. Ask the tough questions: How effective is the firm at keeping engineers on assignments? What happens during "down time?' Do they offer good education and/or training? Are clients satisfied with the quality of engineers assigned to them? Do clients use the firm more than once?

Benefits are about as negotiable as they are with any regular job: not very. To me, that means it's means it's always worth the challenge! Never accept anything at face value - ask questions and ask for what you want. The worst they can do is say no.

Since this is your first time contracting, I suggest you spend a few dollars having and experienced attorney review the contract. (Ask around to find a lawyer with such expertise.) Make sure you know what you're getting into. I find that most problems with contracting jobs stem from the engineer's failure to understand the employment agreement, or from signing up with a lousy firm. So make sure you understand the agreement and what you check references.

I wish you the best.

Readers' Comments

My salary is confidential, but they keep asking. I am dealing with a bunch of recruiters as I'm looking for contract embedded systems work. On one recruiter's Web site it says, "Your current salary should be included either on the resume itself, or in a cover letter."

I agree with your stand that the company should determine your value and tell you what your are worth. Thought you might like seeing what some recruiters are asking for.

Regards,
--M.M.

Nick replies:

Employers and recruiters have such a block in their minds about value. They don't want the responsibility of assessing it. Make no mistake: it's not easy to figure out what someone is worth. It's far easier to use someone else's measure of value - never mind whether that measure is accurate, valid or reliable.

Until employers and recruiters address this issue, they will hire the wrong people and pay them the wrong amount of money. Until engineers realize they have control over confidential information like salary, they will fall prey to the oldest hiring scam in the world.