Job Hunting Tips, Part 3: Money Matters

First off,  unless you’re my best friend or want to hire me, I’m not telling you what my rate is.  I have been very sweetly asked, and I know I would’ve loved for someone to let me know the going rate when I started contracting. I just don’t feel comfortable. It’s not really fair though, because as a hiring manager for many years, I had been quoted many a rate, and I know what you get for $25 compared to what you get for $85.  But I still didn’t know what to charge. All I can do is offer some pointers.

Let me be clear that I don’t know much about taxes so anything I tell you may be wrong, however, I know two things for sure: You need to pay quarterly estimated taxes, and they’re going to be about 40% of revenue (1099 basis).

I guess another thing I know is that there’s 1099 basis (employer withholds no taxes) and W2 basis (employer withholds some taxes). I don’t have a clue what you need to withhold on yourself (you still do) if you’re W2 as I’ve never worked on that basis. There’s plenty of info on teh internets, but you should maybe ask your tax guy/gal.

In terms of pay, this means that you’d better be quoting a high enough rate on 1099 to cover the taxes, plus any additional costs you have now compared to when you weren’t contracting, such as health insurance. Did I say this would be fun? No.

You’ll probably want to start talking to somebody who’s good with taxes, because you may need to be logging your mileage and keeping all manner of receipts that will help cut down your bill come April. And find out the advantages of an S Corp or LLC, which can help even more. Employers seem to like contractors who are S Corp or LLC.

If anybody has info about general liability insurance, I hope they comment. I had one contract that required GL, and when my insurance company said they’d never heard of it, the employer was nice enough to strike it from the contract. That’s another thing: anything you’re not comfortable with in the contract, ask. They may be happy to change it. If I was doing content that could hurt somebody (medical instructions?) I’d be hunting down that GL with a lot more enthusiasm.

Negotiating rate: How bad do you want this gig? How perfect are you for it? Can they get somebody else easily? What sense do you get about budget? All of these questions come into play when you negotiate the rate. I had one client flat out say, “Oh, we can’t afford that. We can only afford X.” I felt she was sincere (she seemed bummed) and I wanted experience in that sector, so I took the lower rate.

Almost everybody I’ve worked with so far has listened to my rate and come back with an offer of about 5 to 10% less. In some cases (I really like the people/opportunity/location/whatever) I’ll do it. In others, I have had the sense that budget was not an issue; they just always come back and ask you to work for less. In each of those cases I have politely reiterated my rate, and they’ve always come back and said OK.

I heard a rule of thumb years ago: every job you bid, go $5 higher on your rate. When you start getting turned down, you’re too high! Sounds good, but how many jobs do you want to bid? And how do you know you’re not starting way too low or high? One hint can be gleaned from what agencies are advertising. My first job out of college was at a temp help agency. Depending on the role, we charged the client 10 to 15 % more than we were paying the worker. I have no idea how valid these percentages are in various states and present day. But if you look at jobs via agencies that have similar experience and education requirements to your resume, you can probably add 10 to 15% and use that as a starting rate.

A note on working for agencies: I haven’t worked through an agency, but here’s a hint. Not all of this 10 to 15%  is profit; there are various taxes and overhead the agency takes out of their cut. However, some of it *is* profit and you may sometimes be able to use that to your advantage. The agency may be willing to take a smaller percentage and give you a higher rate if circumstances are perfect. If they really want or need to keep the client and the client really likes you, they may take a cut. Alternatively, they can sometimes negotiate a higher net rate with the client, giving both of you a better deal. An agency should not be offended if you discuss a negotiation. If you get politely rebuffed, however, I don’t recommend pushing it.

A final note: I always try to make sure that I do something for free for each client. If you find out there’s a piece of collateral they’d like but don’t have budget for, do it on a weekend and let them know you’re not billing for it. I had one client somehow blow away the file structure I’d set up before I left when the project ended. I went in for a few hours and rebuilt it, making clear I was doing it because I enjoyed working with them and wanted them to succeed, as opposed to billing them. Should you work 20 hours free? Probably not. I usually do 3 – 8 hrs, depending on what they need and how long I’m there. They will remember me fondly. And I believe that usually ends up being paid forward.

Job Hunting Tips Part 2: Networking and Social Networking

In a previous post, I asserted that there’s a lot of work out there, albeit contract and short- or part-time. But how do you find all that work? Well, I’ll tell you where I *haven’t* found it: on job bulletin boards (Monster.com), aggregators (indeed.com) although I really like indeed.com, bulletin boards (craigslist.org), or employer-specific online career postings. My first job out of college was doing placements with a temporary help agency, and one of my responsibilities was to create and place the weekly job ads. They were all figments of my imagination. They were designed to create a stream of applicants that we felt rounded out our candidate pool, so when a job opening did come in, we could say, “Sure! We have somebody you can interview tomorrow.” I am sure SOME of the openings today are real. After all, the internet provides an immediacy that didn’t exist back in 19**. I’ve answered some of them. I’m just not going to *rely* on them for my next gig.

So what do you rely on? This will be no surprise:  Your network. And social networking. In tandem. I hope you have already started networking. Like, X years ago, X being in high school or earlier. And while networking *can* mean keeping the contact information of colleagues you trust and admire, and it *can* mean occasionally lifting a beverage with people in your network, actually nurturing your network means doing things for others in your network whenever it’s conceivably possible, in advance of when you might need them.

In his book Never Eat Alone, Keith Ferrazzi points out that your network is working optimally when you have laid the groundwork in advance. Then, when you need an introduction, a recommendation, advice, or even venture capital, your network will be primed to support you. This may seem a little calculating. But you can’t approach it from a perspective of “I’ll help Fred so later he’ll owe me one.” Instead, I get a lot of joy knowing I may have helped someone, and it’s almost always turned out to be a surprise later on when they are able to help me, often indirectly. I hope that when you enter the job market, it’s with the knowledge that you’ve been able to help others. The mythical Karma train *does* come back around. I don’t want to belabor this as there are many better sources for networking than me. I’ll just say that I have been surprised (and delighted) many times by the crazy ways the network helps. I had a gig that I got by chatting with the girlfriend of my boyfriend’s second ex. We had referred some work to the second ex. xoxoxo, Karma!

But you already surely know about networking. How can networking work with social networking? I have played with Twitter, FaceBook, and LinkedIn. There are many others, but these three do it for me.

Twitter: I’m not sure it’s a good idea to mix business and pleasure on twitter. That’s because, if you want people to follow you, they need to know what they’re getting. Are they following somebody who knows a lot about UA or somebody who likes to cook and go to restaurants? It’s confusing if they’re interested in one but seeing tweets on both. Since I’m not the type to tweet (or even blog very often) about UA, it’s pretty much a toy for me, and I enjoy following people. On to the more useful ones!

Facebook: My FB friends are from HS, even elementary school, college, sorority, almost all former employers, current employers, and even friends of FB friends who I’ve friended via comments. Some of these folks are very helpful networkers, so when I’m looking for a gig, or for someone to fill a gig I don’t want, I post it as my status. I make sure it stays there for about 24 hours, and then I change it up. You never know when your friend who’s in the insurance business will need something edited. Also, they’re your friends; they should know if you’re lookin’ for work. OTOH, this is not the source of the real pay dirt.

LinkedIn can connect you with any target company you want. You just need an appropriately constructed network. Again, don’t wait til you need it to get started. I’m sure there are excellent competitors to LinkedIn. I just found LI first. Your reach with LI is based on your own personal collection of contacts. If everyone you are linkedin to is from one sector or company (such as infosec) guess what? You aren’t going to have great contacts in telco, for example. I *could* be directly linkedin to 50% or more of the colleagues from one particular former employer, but I quit seeking links after about the first 70, because at that point, I knew I could contact anybody I wanted via my existing links. I realized that I needed to link to people who were in completely different businesses and industries: consulting, telco, manufacturing, etc. because that is how you extend your personal reach into a vast number of companies. Also, link in to people from your HS (if local) and college. More reach.

There are tomes of “how-to” use linked in info, but I’ve yammered on long enough, so I’ll tell you the most important way it’s helped me. I read publications like Atlanta Business Chronicle and e-newsletters like TAG and any industry-specific pubs of industries I’m interested in. When I see articles about a company that’s got great revenue news or is in the press for whatever reason, I search on linkedin to see who in my network knows somebody at that company. I ask the person in my network for an intro, which includes the text of the email I would be sending their friend. In the email to their friend, I do NOT say I’m looking for gigs. In fact I do this *all the time*, even when I’m not looking for gigs (see earlier bit about casting your bread). I simply mention that I’ve seen blah blah blah in publication X, found it and am interested in Period. Every time I’ve done this, I’ve gotten invited to link in to the person. Although it’s never directly resulted in a gig, I have been contacted by a new contact’s contacts. One note: once you get past a first-degree connection, you need to be very aware how little you know this person and the limitations they need to put on their recommendation of you. When that happens, I ask to do lunch and get to know them a little. After all, according to Keith Ferrazzi, you should never eat alone anyhow

* LinkedIn clearly states, and others I know believe, that you should never link in to anyone you don’t “know and trust”. That’s a valid stance, however, I think you can expand your reach to people you don’t know well and still maintain your integrity as a referrer by carefully defining your limited knowledge of the person, should you be asked for a connection, introduction, or reference.

Finally, as a little note, I do not advise using the sites where people can bid on gigs. I’ve heard folks on TV stating that’s a good way to get experience (maybe, if you have none) or a foot in the door, but these jobs have such bad pay rates, you’re better off spending that time on your network, or working at Starbucks. You’re only as good as your portfolio, and how good can samples be that somebody is only willing to pay $5/hr for?

Job Hunting Tips Part 1

It’s been a while since I’ve posted (not that anybody probably noticed) because I’ve been very, very busy. I’ve recently learned that some colleagues in the UA biz are back on the job market so I am blogging some of the tips I’ve learned over the past couple of years as a contractor. The more info we all share, the better market it is for all of us. I’ll chop my tips up into a few posts: it’s a blog,  not a blovel. (I just made that word up.)

Note: I know there are plenty of folks out there who love contracting for multiple clients, but this article is for people who are basically refugeeing out of “permanent” jobs. I would love comments from happy contractors to help explain the good aspects of contracting. I can think of many reasons I am enjoying contracting: learning new things, meeting a lot of great people (bigger network!), generally having some flexibility in hours and location, and many more. On the other hand, there are business issues to handle that you never deal with as a “permanent” employee.

First off, for those coming away from a full-time, “permanent” job, you may well be able to get more of the same! In the last couple of months, I’ve been hearing of more full-time, perm slots. This is quite different than the landscape for the past couple of years, especially in industries that are comprised of a lot of startups, like infosec (my area of expertise) and other tech sectors.

I was told by someone who would be in a position to know, that in the Fall of ’08, when the financial collapse was becoming obvious, virtually every CEO who was living off venture capital got a call from their VCs saying, “the money you thought needed to last you until the summer now needs to last you until next year.” I’m not as sure about what was happening in non-vc-reliant businesses, but essentially every open requisition suddenly became contractor budget instead. And it’s stayed that way until recently. Hopefully this is turning around, and anecdotal evidence says it is.

So for the time being, you may be a contractor! But here’s more news: for the most part, you’ll be looking at either short contracts or part-time contracts. That’s extremely scary unless you have a rich mom or significant other. However, I have absolutely found that it is not all that difficult to cobble two or more contracts together to maintain full-time hours, or more. In fact, I have “given” more than one of my contracts to colleagues because I have had too much work. I have also been turning things down, because there’s too much work. In another post, I’ll blog about where all this work is coming from.