PDA

View Full Version : Expensive permies



kingcook
13th March 2014, 21:38
I was sat at the desk at client co today, overhearing a conversation between some manager and some woman.

They were discussing budgets, how much had been spent, etc. I heard things like, "total cost £xxx,000"... "4 contractors"... "X permanent staff"... some other mutterings, then the manager raises his voice a bit saying, "Eh? That's ridiculous! We're paying more for permanent staff!!" :laugh

The woman said, "Well, with the permanent people we have training costs, benefits, yada yada yada..."

Made me smile :)

ASB
13th March 2014, 21:53
I was sat at the desk at client co today, overhearing a conversation between some manager and some woman.

They were discussing budgets, how much had been spent, etc. I heard things like, "total cost £xxx,000"... "4 contractors"... "X permanent staff"... some other mutterings, then the manager raises his voice a bit saying, "Eh? That's ridiculous! We're paying more for permanent staff!!" :laugh

The woman said, "Well, with the permanent people we have training costs, benefits, yada yada yada..."

Made me smile :)

My cross charged permies are generally more expensive than my cross charged contractors. The rates involved are supposed to be an accurate reclection of the actual costs.

SarahL2012
14th March 2014, 20:51
ClientCo last year I had to get some day rates for all their perms into a finance system. I had a bit of a chuckle when I was able to show to them that perms doing the same roles as contractors were more expensive.

Zero Liability
14th March 2014, 20:59
Do some people really think firms engage contractors just because they like paying money out?

Mulder
15th March 2014, 08:06
Do some people really think firms engage contractors just because they like paying money out?

Exactly this should not be a surprise to us contractors but it is nice to hear it confirmed :happy

Platypus
15th March 2014, 10:43
My team is two contractors plus another dozen or so permies cross-charged in from other parts of ClientCo. The French permie costs about €260 per hour, the German €180. Me and my fellow contractor cost less than €100 and are the cheapest on the team. And we're the most productive. I just hope that when the inevitable* cuts come, someone remembers that :eyes

* ClientCo is on a slash and burn cost cutting spree atm.

SteelyDan
15th March 2014, 11:57
My team is two contractors plus another dozen or so permies cross-charged in from other parts of ClientCo. The French permie costs about €260 per hour, the German €180. Me and my fellow contractor cost less than €100 and are the cheapest on the team. And we're the most productive. I just hope that when the inevitable* cuts come, someone remembers that :eyes

* ClientCo is on a slash and burn cost cutting spree atm.

As a contractor for many years, I've often wondered how hiring companies actually account for us 'contractors' financially...do we appear as a 'company expense' item?

ASB
15th March 2014, 12:16
My team is two contractors plus another dozen or so permies cross-charged in from other parts of ClientCo. The French permie costs about €260 per hour, the German €180. Me and my fellow contractor cost less than €100 and are the cheapest on the team. And we're the most productive. I just hope that when the inevitable* cuts come, someone remembers that :eyes

* ClientCo is on a slash and burn cost cutting spree atm.

But, how accurately are your costs assessed and the fairness of the comparisons? For example hr type costs are presumably allocated to your french and german permies. Thats fair. But what about accommodation costs? These are substantial and are probably apportioned to the permies, along with a share of the training budget etc.

in my case all of these costs get rolled into the permie cross charge rates.

with the cons this isnt the case. I get charged only the agency rate plus a small premium for procurement costs. This does flatter the comparison towards the contractors. But the point does remain that similar people on similar grades are often genuinely cheaper to the business as cons.

Platypus
15th March 2014, 12:26
But, how accurately are your costs assessed and the fairness of the comparisons? For example hr type costs are presumably allocated to your french and german permies. Thats fair. But what about accommodation costs? These are substantial and are probably apportioned to the permies, along with a share of the training budget etc.

in my case all of these costs get rolled into the permie cross charge rates.

with the cons this isnt the case. I get charged only the agency rate plus a small premium for procurement costs. This does flatter the comparison towards the contractors. But the point does remain that similar people on similar grades are often genuinely cheaper to the business as cons.

I believe that in my case it is a fair comparison* and that all costs will have been accounted for in a sort of TCO model. It's hardly surprising I'm much less expensive than permies since I don't get holidays, sick pay, training yada yada while the Frenchies must be the most cosseted employees in the world.

EDIT: * because ClientCo is an expert in charging for people by the hour

ASB
15th March 2014, 12:38
I believe that in my case it is a fair comparison* and that all costs will have been accounted for in a sort of TCO model. It's hardly surprising I'm much less expensive than permies since I don't get holidays, sick pay, training yada yada while the Frenchies must be the most cosseted employees in the world.

EDIT: * because ClientCo is an expert in charging for people by the hour

Point was just really that it can be difficult to apportion overall costs. You are certainly right a out the french. Many years ago they went from a 40 to 35 hour week. My chaps have recently gone back to 40.

In the process they got a decent pay rise. And a number of days extra holiday such as the total hours worked in the year didn't actually change.

One chap I used to work with gets nearly 50 days allowing for seniority days etc.

Platypus
15th March 2014, 12:46
One chap I used to work with gets nearly 50 days allowing for seniority days etc.

WOW !! :eek:

Zero Liability
15th March 2014, 18:55
Exactly this should not be a surprise to us contractors but it is nice to hear it confirmed :happy

Sure but you don't need to be a genius to figure it out. I think people just don't have a clue how expensive they can be to their employers, even as temp staff. The engager is gaining an advantage through using contractors one way or the other, whether it be the flexibility they bring, lower overall cost etc. They're generally not in business to lose money by deliberately taking on higher costs with no offsetting advantages. Rather than griping about contractors, they could try find out why contractors can command the rates they do, because nothing is stopping permies from stopping permanent work and changing the way they do business, to better capitalise upon their experience.