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  1. #1
    Join Date
    Oct 2006
    Location
    San Francisco, CA
    Posts
    91

    W2 Contract Employment Question

    Hello QLCers!

    I'm currently in the running for a job that is paid by W2 contract. In other words, I'd be an hourly or salaried employee of a staffing agency, which would make a certain percentage over my rate that is billed to the client.

    While this makes sense in situations where the staffing agency helps find you a job, in this instance I found the job directly from the client, so the staffing agency did not help in my personal hiring process.

    My question is -- what are the benefits of W2 contract employment (other than being employed which is, of course, a benefit in its own right)? Have you ever worked W2 through a staffing agency and would you recommend it? Or would I just be screwing myself over? Thanks!
    My life, on a budget... (sort of): http://www.hereverycentcounts.com

  2. #2
    Join Date
    Feb 2007
    Location
    the slippery slope
    Posts
    765
    Quote Originally Posted by playingbyheart View Post
    My question is -- what are the benefits of W2 contract employment (other than being employed which is, of course, a benefit in its own right)? Have you ever worked W2 through a staffing agency and would you recommend it? Or would I just be screwing myself over? Thanks!
    I've been a contractor through a staffing company for several years now, working at a very large corporation. I imagine the experience varies quite a bit by staffing company and the company you actually work at but I mine has been very postive. For all I know it may be atypical...

    Pluses (for me):
    -A job in a field I wanted to get into, with a company I was interested in working for.
    -Very good money per hour, to offset the lack of benefits (medical, vacation time, sick time, paid holidays, retirement plan, etc). My staffing company does offer options for me to buy into group health care plans, contribute to a 401k, and gives me a bonus each 6 months which basically makes up for the holidays and a gives a few vacation days.
    -Staffing company withholds taxes and pays into unemployment, SS, etc, so you don't have the tax headaches of an independent contractor.
    -I've gotten a lot of experience and made a lot of contacts within the company that I'm now poised to turn into a great full time job (fingers crossed).

    Minuses (for me):
    -Little or no real job security (but is that really that different these days?).
    -Your employers have no long term stake in you, so there's few training or development opportunities outside of those directly related to what you're there to do for them.
    -No vacation/sick time gets old.
    -No guarantee your employer has any interest in hiring you directly, if that's your goal. Many places do use contract jobs to test drive people without sinking too much money into the hiring process, but some just need a warm body for a certain period of time. You might not know which is the case going in. Much like dating...
    The truth is, we know so little about life, we don't really know what the good news is and what the bad news is. - Kurt Vonnegut

  3. #3
    I was W2 through a design agency for a large corporation for about 1.5 years before I was converted by the company to be a regular employee. Unlike you, I didn't find the job myself. For me it was a chance at a job I probably wouldn't have been qualified for normally because most people who were truly qualified wouldn't have wanted to take temporary contract work.

    The pluses are there is no pressure to work long/crazy hours. Most likely the company you contract through will not allow you to work more than 40 hours (even if you are salary) so you won't feel this expectation to be putting in long hours. Also, there's sort of a buffer between you and your boss (the agency) so there is someone there who can mitigate any issues.

    To be honest, though, there are more downsides. I probably wouldn't choose to do contract work again unless I was out of work and needed something quick and/or it was a chance at a job I wasn't qualified for under normal circumstances.

  4. #4
    Join Date
    Oct 2006
    Location
    San Francisco, CA
    Posts
    91
    What would you say those downsides were?
    My life, on a budget... (sort of): http://www.hereverycentcounts.com

  5. #5
    I'm not sure what W2 contract employment is, unless you're referring to a professional staffing agency. I spent working as a contractor for two years after I graduated college and there are positives and negatives.

    I'll just add to the positives and negatives listed by Samwell:

    Positives:
    1) Bucks. Essentially the contract is negotiated by your recruiter with a potential employer. You will be hourly, but that isn't necessarily bad. Especially considering overtime is usually 1.5 X your base salary. Additionally, contractors do come on with higher rates than direct employees, since they're expected to bring the experience, rather than be trained.

    2) Personal relationship with your recruiter: I can't stress this one enough. Your recruiter will be the contact within the staffing agency who placed you at your location. They negotiate the contract and field any complaints you have after you're placed.

    In my case, I had an instance where my placement location started having me do 8 hr days of jobs outside my employment description. Essentially, they were using me to get around ergo requirements established by the local union. I called my recruiter and she backed me up with the contract. She found me an alternate position and got me out of a bad spot. To boot, she even tried to get me a raise when I moved.

    Negatives
    1) Mandatory OT. Sometimes employers will need a lot of bodies thrown at a very big problem and will run mandatory OT. Contractors usually get drawn into this and 60 hrs is the norm. There are no guarantees that you can avoid this as a direct employee though. My current employer has direct employees working the same hours as contractors. However, thanks to the contract, the contractors are getting paid 1.5 OT.

    2) No vacation/sick time. I add a caveat to Samwell's post. I was employed as a contractor and did accrue vacation and sick leave. I used it on occasion and at the end of my employment, my shop sent me a check for the unused balance. That may be atypical, but I would ask before signing a contract.

    Contracting has it's own set of benefits/downsides. The major one that made me go direct at an employer was the fact that no one is willing to provide training to a contractor. That may not be a problem for you if you're already considered experienced in your professional field.

    It was a positive experience though. To this day, almost three years later, I still provide referrals to my old recruiter.

  6. #6
    Quote Originally Posted by playingbyheart View Post
    What would you say those downsides were?
    Always being treated like a second-class citizen. Not being entitled to a lot of the perks that the regular employees get (gym, bonuses, stock, holiday party, etc.). I couldn't even get my own concall number as a contractor. Contractors had to share cubes, too.

    There's also always the thread of losing your job because contractors are first to go.

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