6 ms·

I guess hiring for contracts routes around arbitrary headcount limits.

nickstinemates 4y ago
Not really arbitrary. Headcount are typically approved in tranches, budget is a lot more fluid. Headcount is also part of long term forecasting whereas again contractors are just a budget item. "A $100k engineer costs $150k per year all in" vs. "We need to spend $150k to get X done"
no_wizard 4y ago
I think it has more to do with getting around benefits, usually. The expense for businesses isn't just the salary, in fact alot of businesses, if they could just pay the salary, would be able to retain / hire more people, but benefits + high salary is harder to take on. This is a great argument for universal healthcare and a nationalized pension system, but I digress
- abeyer 4y ago
  But you just pay _more_ for the contractors, at least if you hire locally. In my experience contract rates for comparable work any place you'd want to work are typically marked up (at least) enough to roughly compensate for the difference in benefits and taxes. Especially now that remote for FTEs has become so common, there wouldn't be much motivation to take long term contracts otherwise. That may change if the job market goes pear-shaped, but doesn't seem like we're there yet.
- CydeWeys 4y ago
  Tech workers are so highly compensated anyway that benefits aren't a huge percentage of the total cost of employment. The main reasons to prefer contractors in times of economic difficulty are: (a) contracts are fixed length, so it's easy to simply let a contract lapse rather than renewing it if conditions worsen/don't improve and you want to cut headcount without having a layoff, and (b) contractors frequently count differently on a balance sheet (as operating expense vs employee expense).
  - b20000 4y ago
    tech workers are not highly compensated on average, lawyers, doctors etc are.
    - bigtunacan 4y ago
      Average salary for a lawyer isn't that different than for a software engineer (slightly higher). Doctor's average on the other hand is more than double.
      - ghaff 4y ago
        >Doctor's average on the other hand is more than double. And often have spent a lot more time in relatively low-paid training. And lawyers are at least somewhat bimodal (though maybe trimodal). White shoe firms, corporate lawyers/successful private practices, everyone else.
        saiya-jin 4y ago
        if you are one, you are not the other (type of lawyer), in same vein as dentist will never be GP or neurosurgeon or dermatologist and vice versa. you also don't see linux admins leading development of some software projects
        ghaff 4y ago
        Not really. They all went to law school and passed the bar. Of course, there are tiers of school, class rank, and clerkships that perform a sorting function. Law has pretty strong credentialing mechanism.
      - b20000 4y ago
        any lawyer you try to hire in the bay area will be charging you $700+ per hour. doesn't matter if they work for a big law firm or not. the lowest I ever paid a lawyer was $400 per hour.
  - ido 4y ago
crackercrews 4y ago
Also lets you trim headcount without announcing layoffs, down the line.

Not really arbitrary. Headcount are typically approved in tranches, budget is a lot more fluid. Headcount is also part of long term forecasting whereas again contractors are just a budget item. "A $100k engineer costs $150k per year all in" vs. "We need to spend $150k to get X done"

no_wizard 4y ago

I think it has more to do with getting around benefits, usually. The expense for businesses isn't just the salary, in fact alot of businesses, if they could just pay the salary, would be able to retain / hire more people, but benefits + high salary is harder to take on. This is a great argument for universal healthcare and a nationalized pension system, but I digress

abeyer 4y ago
But you just pay _more_ for the contractors, at least if you hire locally. In my experience contract rates for comparable work any place you'd want to work are typically marked up (at least) enough to roughly compensate for the difference in benefits and taxes. Especially now that remote for FTEs has become so common, there wouldn't be much motivation to take long term contracts otherwise. That may change if the job market goes pear-shaped, but doesn't seem like we're there yet.
CydeWeys 4y ago
Tech workers are so highly compensated anyway that benefits aren't a huge percentage of the total cost of employment. The main reasons to prefer contractors in times of economic difficulty are: (a) contracts are fixed length, so it's easy to simply let a contract lapse rather than renewing it if conditions worsen/don't improve and you want to cut headcount without having a layoff, and (b) contractors frequently count differently on a balance sheet (as operating expense vs employee expense).
- b20000 4y ago
  tech workers are not highly compensated on average, lawyers, doctors etc are.
  - bigtunacan 4y ago
    Average salary for a lawyer isn't that different than for a software engineer (slightly higher). Doctor's average on the other hand is more than double.
    - ghaff 4y ago
      >Doctor's average on the other hand is more than double. And often have spent a lot more time in relatively low-paid training. And lawyers are at least somewhat bimodal (though maybe trimodal). White shoe firms, corporate lawyers/successful private practices, everyone else.
      - saiya-jin 4y ago
        if you are one, you are not the other (type of lawyer), in same vein as dentist will never be GP or neurosurgeon or dermatologist and vice versa. you also don't see linux admins leading development of some software projects
        ghaff 4y ago
        Not really. They all went to law school and passed the bar. Of course, there are tiers of school, class rank, and clerkships that perform a sorting function. Law has pretty strong credentialing mechanism.
    - b20000 4y ago
      any lawyer you try to hire in the bay area will be charging you $700+ per hour. doesn't matter if they work for a big law firm or not. the lowest I ever paid a lawyer was $400 per hour.
- ido 4y ago

crackercrews 4y ago

Also lets you trim headcount without announcing layoffs, down the line.