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189 What Are The Differences Between Full-Time and Contracting? · DevQuestions with Tim Corey

• 0:00
  SPEAKER_00: Welcome to the Dev Questions Podcast with Tim Corey.
• 0:03
  SPEAKER_00: Join us each episode as we tackle the questions you are asking about a career in software development, understanding the industry, and new technology.
• 0:12
  SPEAKER_00: If you're just starting out or you want to grow stronger as a developer, this is the place to get your questions answered.
• 0:19
  SPEAKER_00: Now, here's your host, expert developer and online educator Tim Corey.
• 0:26
  SPEAKER_02: What are the differences between full-time and contracting?
• 0:31
  SPEAKER_02: What are the best practices and when should I choose which?
• 0:34
  SPEAKER_02: This is the questions asked on a suggestion site, and it's one we'll answer in today's episode of DevQuestions.
• 0:41
  SPEAKER_02: Now, I have done both full-time work and contracting work.
• 0:46
  SPEAKER_02: In fact, I transitioned from a full-time job to full-time contracting and then back to a full-time job while doing contracting on the side.
• 0:56
  SPEAKER_02: I've kind of done a little bit of everything, and that was just in a short period of time.
• 1:00
  SPEAKER_02: I've done more on both ends of the spectrum.
• 1:03
  SPEAKER_02: So let's discuss why I chose which and what you could do to figure out which one is getting better for you.
• 1:11
  SPEAKER_02: Let's talk about a relatively equal scenario.
• 1:15
  SPEAKER_02: So we're going to talk about full-time salary versus full-time contracting.
• 1:20
  SPEAKER_02: So 40 hours a week for both.
• 1:22
  SPEAKER_02: Now, you can do contracting in 10 hours a week or for this project or other ways of doing it.
• 1:29
  SPEAKER_02: It's really hard to cover every different scenario.
• 1:32
  SPEAKER_02: So we're going to compare kind of apples to apples here with a 40-hour a week salary job versus a 40-hour a week contracting job just in order to get kind of a level playing field.
• 1:44
  SPEAKER_02: You'll have to evaluate a specific contracting job based upon what's, you know, what the details are and what is going to work for you.
• 1:53
  SPEAKER_02: Okay?
• 1:54
  SPEAKER_02: And we're also going to talk about the US.
• 1:56
  SPEAKER_02: Now, there's going to be differences in different countries.
• 2:00
  SPEAKER_02: For instance, in the US, our healthcare is tied to our employment in most cases.
• 2:06
  SPEAKER_02: So we have to bring that into the conversation.
• 2:09
  SPEAKER_02: That won't necessarily be the case everywhere.
• 2:12
  SPEAKER_02: And so yours will vary a bit, but I think that the principles will still apply.
• 2:16
  SPEAKER_02: And you can start thinking through, okay, that doesn't apply.
• 2:19
  SPEAKER_02: So that kind of reduces this or that moves this around.
• 2:22
  SPEAKER_02: So we can talk through and then you can evaluate for yourself.
• 2:25
  SPEAKER_02: Because at the end of the day, it depends.
• 2:29
  SPEAKER_02: All right.
• 2:29
  SPEAKER_02: So let's get to kind of comparing the differences.
• 2:34
  SPEAKER_02: So, first of all, pay.
• 2:37
  SPEAKER_02: Now, the pay should be more for a contract position.
• 2:42
  SPEAKER_02: A good rule of thumb in the US, and again, we're going to cover the US only right now, so it may be different in your areas, but a good rule of thumb is at least 50% more because of lost benefits.
• 2:56
  SPEAKER_02: So we'll talk about that in a minute.
• 2:58
  SPEAKER_02: But if you see an employee getting, let's just round numbers here,$50 an hour, then as a contractor doing the same job, the same position, same level, you should be getting at least$75 an hour, maybe more because of the uncertainty of the position.
• 3:19
  SPEAKER_02: So but at least that that very lowest benchmark should be 50% more.
• 3:25
  SPEAKER_02: Okay.
• 3:26
  SPEAKER_02: You evaluate benefits because when it comes to full time, you get health care, and some of these may not apply, but healthcare, retirement, paid holidays, paid vacation, paid sick leave, and other benefits for full time.
• 3:42
  SPEAKER_02: You also get that kind of locked-in flexibility locked in of I get a paycheck every week.
• 3:48
  SPEAKER_02: That's another benefit as well.
• 3:50
  SPEAKER_02: Let's talk flexibility.
• 3:52
  SPEAKER_02: Well, there's more flexibility for contracting because you get to say, hey, you know what, I'm going to leave now.
• 3:59
  SPEAKER_02: And that's okay.
• 4:00
  SPEAKER_02: You can leave.
• 4:01
  SPEAKER_02: Or you can say, hey, you know what?
• 4:03
  SPEAKER_02: I'm going to take on more work for you.
• 4:05
  SPEAKER_02: And maybe I'll agree to work for 60 hours a week instead of 40.
• 4:09
  SPEAKER_02: Or maybe you say, you know what, for the summer, I'm only going to work 20 hours, and that can be okay.
• 4:16
  SPEAKER_02: So you have that flexibility.
• 4:18
  SPEAKER_02: Whereas if you're full-time, typically your boss is kind of laugh at you and say, no, you can't work 20 hours a week during the summer.
• 4:25
  SPEAKER_02: You're working at least 40 and you're on salary.
• 4:28
  SPEAKER_02: So if you work 60, I'm paying you like you worked 40.
• 4:31
  SPEAKER_02: So flexibility is gonna be more beneficial to the contractor.
• 4:36
  SPEAKER_02: Now let's talk stability.
• 4:39
  SPEAKER_02: Well, with stability, you have more stability with full-time-ish.
• 4:46
  SPEAKER_02: So a contractor is kind of seen as a as-needed employee.
• 4:52
  SPEAKER_02: They're the first one to go, typically, where you say, hey, you know what, we don't need you anymore.
• 4:57
  SPEAKER_02: Get out.
• 4:58
  SPEAKER_02: That's fine.
• 4:59
  SPEAKER_02: It's very little paperwork.
• 5:00
  SPEAKER_02: It's just, you know, you stop working for us, as opposed to a full-time employee, which takes onboarding to get a new employee on, it takes offboard to get them off.
• 5:10
  SPEAKER_02: It involves HR and a whole bunch of other things.
• 5:14
  SPEAKER_02: So in theory, it's more stable to be a full-time employee.
• 5:19
  SPEAKER_02: However, the way the market is, the way companies operate, stability is a little bit of a hard thing to measure either way, because companies do tend to seemingly act upon whims rather than on cold hard facts or communicate in advance, those kind of things.
• 5:39
  SPEAKER_02: You might get laid off as a full-time employee, and you might not as a contractor.
• 5:44
  SPEAKER_02: So there's a little bit of a gray area there.
• 5:47
  SPEAKER_02: Now let's talk career growth.
• 5:50
  SPEAKER_02: So career growth typically is better for contracting because you get to choose your jobs, you get to move around between technologies, and you don't get locked in.
• 6:02
  SPEAKER_02: So if you're talking about, hey, you know what?
• 6:06
  SPEAKER_02: I haven't worked at Blazor yet, but I see there's a contract job over there for Blazor, I'm gonna do that job.
• 6:12
  SPEAKER_02: Whereas I'm not gonna do this job over here because they're asking for.NET Framework MVC.
• 6:18
  SPEAKER_02: I don't want to do that.
• 6:19
  SPEAKER_02: And you can choose that.
• 6:21
  SPEAKER_02: And you don't get locked into, okay, I'm working on even say.NET Core MVC, but I'm I'm only doing that.
• 6:29
  SPEAKER_02: That's what a full-time employee can sometimes happen, is they sometimes get locked into, well, I've been a you know a C-sharp developer for 10 years, but I've only ever worked on MVC and only in this version.
• 6:43
  SPEAKER_02: Maybe you know uh.NET 6, and that's it.
• 6:46
  SPEAKER_02: We didn't upgrade.NET 8, we should have, we didn't.
• 6:48
  SPEAKER_02: You know, we use.NET 6 and we've used it for years.
• 6:52
  SPEAKER_02: Well, it's only been a few years, but you know, you get the idea that you're kind of locked in potentially to a certain technology, a certain system, a certain way of doing things.
• 7:02
  SPEAKER_02: Whereas contractors get exposed to other ways of doing things, other systems, and maybe they're too locked in, but they've moved from one locked-in system to a different locked-in system with a different way of doing things.
• 7:14
  SPEAKER_02: They get exposed to more things.
• 7:16
  SPEAKER_02: So typically the level of skill you have will grow more as a contractor.
• 7:24
  SPEAKER_02: However, when it comes to talking to employers, sometimes it feels better to have be able to say, hey, I worked at Acme Corp for five years on C Sharp.
• 7:38
  SPEAKER_02: That feels better, and an employer might value that better than saying, I worked at this company on MVC for six months, I worked at that company over here for nine months on Blazor, I worked at this company over here on Windforms for a year.
• 7:53
  SPEAKER_02: There is positives and negatives to both in that area.
• 7:57
  SPEAKER_02: It depends on how you can design your resume.
• 8:00
  SPEAKER_02: You might be able to say, I worked as a consultant for these five years in these technologies and list windforms in MVC and Blazor and other things, and that may be more impressive.
• 8:14
  SPEAKER_02: So it all depends on how you structure it and how it's gonna look for your career growth.
• 8:20
  SPEAKER_02: It may be better one way or another, depending on your circumstance.
• 8:25
  SPEAKER_02: So what's the right choice?
• 8:28
  SPEAKER_02: What, you know, and I I've made both choices, so obviously it's not always gonna be one choice over the other.
• 8:36
  SPEAKER_02: So let's talk through kind of my process for how I chose one versus the other, and then we can talk more specifically uh in the comments if you have more questions.
• 8:48
  SPEAKER_02: But when I chose contracting, it was for one of a few reasons.
• 8:52
  SPEAKER_02: One, if I didn't have a choice.
• 8:54
  SPEAKER_02: So, hey, I lost my job.
• 8:57
  SPEAKER_02: Well, I've got contracting, I can do that.
• 8:59
  SPEAKER_02: So that picks up where you know you you couldn't necessarily get a full-time job right away.
• 9:06
  SPEAKER_02: This may be you.
• 9:07
  SPEAKER_02: Maybe you're in a place where you can't get a full-time job, but you could get a contract job.
• 9:12
  SPEAKER_02: Well, is that really a choice then?
• 9:15
  SPEAKER_02: Is it it's a choice between not working and working?
• 9:17
  SPEAKER_02: So it seems like that's one reason why you definitely want to choose contracting.
• 9:22
  SPEAKER_02: You get a job.
• 9:24
  SPEAKER_02: So when you don't have a choice, great time to choose contracting.
• 9:28
  SPEAKER_02: But also, when I wanted flexibility, contracting is the way I went because I got to choose which hours to work.
• 9:37
  SPEAKER_02: And, you know, when I, you know, decided to take more clients on and kind of push through in order to have downtimes later that were more relaxing.
• 9:46
  SPEAKER_02: So if I want that flexibility, that was another reason I would choose contracting.
• 9:52
  SPEAKER_02: Number three, when I was doing it as a side job, I would choose contracting because side jobs are awesome.
• 9:59
  SPEAKER_02: Now, some people hate side jobs because they're so worn out from work, they don't even want to think about doing more work in their free time.
• 10:07
  SPEAKER_02: But the way I saw it was I first of all get to grow in more areas.
• 10:12
  SPEAKER_02: And second of all, I get to have more income.
• 10:16
  SPEAKER_02: And I can third build up my network of contacts.
• 10:19
  SPEAKER_02: So if I ever lose my job, I could do this contracting full-time, which I did.
• 10:25
  SPEAKER_02: Um, so there's a lot of reasons why those side jobs are really beneficial.
• 10:29
  SPEAKER_02: But number four, when I had the benefits handled in other ways.
• 10:35
  SPEAKER_02: So for me, the big one was healthcare.
• 10:38
  SPEAKER_02: How do I handle health care when I'm not working full-time?
• 10:42
  SPEAKER_02: Now, there are systems in place in the US for people who don't have a job or who don't have a job that provides healthcare that can give you healthcare at a potentially reduced rate, even.
• 10:55
  SPEAKER_02: And that worked out well for me for a number of years.
• 10:57
  SPEAKER_02: And that's what I chose because that allowed me to have that flexibility and not have my healthcare tied to my job, which is huge.
• 11:05
  SPEAKER_02: It's awesome.
• 11:06
  SPEAKER_02: So there are times when, you know, if I had healthcare taken care of, the rest of stuff was easy.
• 11:13
  SPEAKER_02: And there were other times where I'm like, hey, you know what?
• 11:15
  SPEAKER_02: It'd be a whole lot easier if I could just have something else take care of the healthcare.
• 11:19
  SPEAKER_02: So that's where I might not choose contracting.
• 11:22
  SPEAKER_02: So let's talk about the times that I chose full-time and why.
• 11:27
  SPEAKER_02: Well, number one, what I wanted stability.
• 11:30
  SPEAKER_02: So I was working full-time with a contractor, and that involves wearing all the hats when you're a solo contractor.
• 11:39
  SPEAKER_02: You know, I didn't even at the time have an accountant, I should have, but um I do now.
• 11:44
  SPEAKER_02: Um, but I didn't have a janitor, I didn't have a marketing person, I didn't have, so I had to figure out all these things that weren't just software development.
• 11:55
  SPEAKER_02: And that took a lot of time and it added a lot of stress onto me because I'm trying to figure out how to do these things while also trying to do the actual job of consulting or contracting and doing that work.
• 12:10
  SPEAKER_02: So there was a time when I was just really tired and I felt like I was spending more time at my job than I wanted to.
• 12:20
  SPEAKER_02: And so I said, hey, you know what?
• 12:22
  SPEAKER_02: I'm going to, you know, I don't have to get a full-time job, but I'm going to look for one that's perfect.
• 12:27
  SPEAKER_02: And if I find a perfect full-time job, I'll do that.
• 12:31
  SPEAKER_02: Because that stability is pretty awesome.
• 12:34
  SPEAKER_02: The idea that every week I get a paycheck, every single week, every single time a paycheck, you know, pay period rolls around, I get a new paycheck.
• 12:42
  SPEAKER_02: That's pretty awesome.
• 12:43
  SPEAKER_02: The fact that I have benefits taken care of for me, awesome.
• 12:47
  SPEAKER_02: The fact that I can just spend most of my time doing the actual job, super awesome.
• 12:53
  SPEAKER_02: And so I found that kind of perfect job.
• 12:55
  SPEAKER_02: It was a work-from-home job, it was a great company, they had a great philosophy of around work-life balance.
• 13:00
  SPEAKER_02: And so I said, hey, you know what?
• 13:02
  SPEAKER_02: Sure, I'll take that job.
• 13:04
  SPEAKER_02: And so I transitioned from consulting or contracting to full-time employment, 40 hours a week.
• 13:12
  SPEAKER_02: So I chose that because of stability.
• 13:15
  SPEAKER_02: Number two, I chose full-time sometimes when I wanted more time outside of work.
• 13:22
  SPEAKER_02: There were some times I wanted to spend more time with my family.
• 13:25
  SPEAKER_02: My kids were young.
• 13:26
  SPEAKER_02: That was a great time to move from one position to another, from one where I was still a full-time employee-ish, but I was also kind of a contractor.
• 13:37
  SPEAKER_02: And so I was spending a lot of time and I said, hey, I can move to this other position that's full-time, that is more stable, has more defined hours, I can spend more time outside of work with my family.
• 13:50
  SPEAKER_02: So that's another reason why you might choose full-time.
• 13:53
  SPEAKER_02: Number three, when I wanted to add to my resume, it's just easy to add to your resume when you work at a company for four or five, six years.
• 14:02
  SPEAKER_02: You can say, hey, I worked for six years on these things.
• 14:06
  SPEAKER_02: That's really beneficial.
• 14:07
  SPEAKER_02: And it doesn't take as much work as opposed to running a consulting agency and trying to fill in the gaps and explain all the different projects you worked on.
• 14:17
  SPEAKER_02: And then number four, I chose full-time when I just needed the benefits and it was just easier.
• 14:24
  SPEAKER_02: So when benefits are important, when retirement is important, when healthcare is important, and it's not just those things.
• 14:31
  SPEAKER_02: When you know, when you're a contractor and you take a day off, you don't get paid necessarily.
• 14:38
  SPEAKER_02: Whereas if you're a full-time employee, you have paid time off, you have paid sick days, you have paid holidays.
• 14:46
  SPEAKER_02: So when Christmas rolls around, you don't have to be thinking, oh, I should probably be working because I'm not getting paid right now and I'm you know buying presents, and that's really a double whammy when it comes to costs and expenses.
• 14:58
  SPEAKER_02: And so you have to think about that.
• 15:01
  SPEAKER_02: And sometimes those those benefits kind of push you towards working full-time.
• 15:07
  SPEAKER_02: So both contracting and full-time employment can be good choices, but they can also both be bad choices.
• 15:15
  SPEAKER_02: The most important thing to understand is to understand your options well so you can compare both the positives and the negatives of each.
• 15:26
  SPEAKER_02: That's important because too often I see people comparing the negatives of one to the positives of the other.
• 15:34
  SPEAKER_02: There are downsides to both.
• 15:36
  SPEAKER_02: There are upsides to both.
• 15:38
  SPEAKER_02: And depending on a specific job, a full-time job may be a horrible choice compared to a part-time contracting position.
• 15:48
  SPEAKER_02: Whereas in other cases, a full-time contracting position might not be as good of an option as even a lesser number of hours for a full-time position.
• 16:00
  SPEAKER_02: So you need to evaluate all these things we talked about to figure out what are the pros and cons of each and what's going to help me today, but also what's going to help me long term.
• 16:13
  SPEAKER_02: Don't just think about today, think about tomorrow.
• 16:15
  SPEAKER_02: Think about where you're going to be in a year or two years.
• 16:19
  SPEAKER_02: What's going to be the long-term benefit that you get from each, as well as a long-term drawback from each, and figure out what works best for your situation.
• 16:29
  SPEAKER_02: All right.
• 16:30
  SPEAKER_02: So those are something to think about when it comes to contracting versus full-time employment.
• 16:35
  SPEAKER_02: Thanks for listening.
• 16:36
  SPEAKER_02: And as always, I am Tim Corey.
• 16:38
  SPEAKER_01: Thank you for joining us for this episode of Def Questions.
• 16:41
  SPEAKER_01: Tim is committed to making it easier for you to become a developer.
• 16:45
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• 16:52
  SPEAKER_01: You can also send your questions to questions at IamtimCore.com.
• 16:57
  SPEAKER_01: Until next time, remember, you are too smart and your time too valuable to waste it making all the mistakes Tim did.
• 17:04
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