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Contract Employee's Newsletter
Helping Contract Professionals
Manage Their Careers
October 15, 2001
Edited by James R. Ziegler
A Companion to:
The Contract
Employee's Handbook
www.cehandbook.com
Sponsored by:
P.A.C.E. - Professional
Association for Contract Employment
www.pacepros.com
About The Contract Employee's Newsletter
The Contract Employee's Newsletter is a free e-mail publication
for technical and professional contractors containing news, commentary,
tips, links to useful resources, nuggets of wisdom submitted by
readers, and anything else that seems appropriate at the time. The
CENewsletter is distributed bimonthly or whenever issues warrant.
The subscriber list is confidential and will not be disclosed outside
this organization.
In This Issue
Read recent
issues of The Contract Employee's Newsletter.
Suggest A
Topic For The Newsletter
Ideas Anyone?
I have received some excellent suggestions for future newsletter
topics. Thank you.
Keep sending in your ideas and suggestions. Chances are, if a topic
interests you as a Contract Professional it will certainly interest
the majority of our readers.
Guest Appearances
Would you like to contribute a short piece to the Contract
Employee's Newsletter? Maybe a marketing tactic that works for you,
or a true story of agency madness? I'll cite your name, your e-mail
address, and a link to your website. I can't pay you, but I'll make
sure that everyone who reads the Contract Employee's Newsletter
knows who you are and what you do. It can't hurt, and, who knows,
it just might help your consulting career. Contributions should
be of general interest to all Contract Professionals.
Mail your suggestions to suggestion@pacepros.com.
Return to Table of Contents.
Kudos and Testimonials
What People Are Saying About Us
"Thank you so much for this information. I am a full-time
employee and am getting closer every day to making the decision
to quit and start a new business as a contract employee. I only
have a few months' worth of savings to live on, but if I wait
until I've saved up 6 months to a year's worth of savings, I'll
be too old to work! So, although I'm quite scared, this is a wonderful
resource tool and it's nice to know others are out there. Thanks
again."
Return to Table of Contents.
Marketing Tips
Remember That Place Called The Library?
Here is an idea for creating a prospecting list of companies in
your community that may need your skill set. Visit your local library.
Ask at the information desk where you can find the directories that
list companies by industry type and geographic location. Most directories
have headings for the main phone number, address and number of employees.
Take the directory and a pocket full of coins to the nearest copier,
and copy the relevant pages for your search.
Here are three directories that I found in the business section
of my local county library:
- Commerce And Industry Directory
- Rich's Business Directories
- Dun's Regional Business Directory
Dun's directories are also available for every major metropolitan
region in the United States. All three directories provide separate
listings of companies by name, by product/service, by city, and
by size. They provide phone, fax and 800 numbers, local addresses,
number of employees, and in some cases e-mail and web site addresses.
Your librarian will also cheerfully direct you to additional lists
compiled by local business journals and other sources.
Focus on the largest companies first. Large companies tend to have
larger operating budgets that are allocated to individual managers
and projects. Fixed budgets are conducive to longer and more stable
assignments. Also, large companies have lots of departments, any
of which may need your services, and all of which have managers
with the authority to hire you. Large companies are easier to move
around in, they have more skilled people to help you learn new skills,
and they are less inhibited in the way they spend money.
Return to Table of Contents.
Ask Dungaree Dan
Should I use a resume distribution service?
Q: Dear Dan -- I wonder if you can help me. I am
looking for a site that operates like DICE does, in the following
way: They distribute your resume to several hundred companies at
once. DICE still does this but it seems like all of the companies
are recruiting agencies now.
I have heard of several resume submission services, but I have
also heard that they have dead relationships and sometimes the client
base is not high quality. . . and they charge a ridiculous fee for
a low quality service. Also, I am very concerned that paying for
a service projects desperation to a potential client who will use
this as a tool to negotiate a lower rate. So, do you have some suggestions
that may help? -- Signed: Reluctant Spammer
A: Dear Reluctant -- A couple years ago the owners
of Dice.com sold
the company to Earthweb for $35 million. Prior to the sale, Dice.com
restricted job listings to third-party recruiting firms. Companies
were not allowed to post jobs on Dice. Soon after the sale Earthweb
reversed the policy against company listings, but Dice.com remains
predominantly a site for recruiting firm listings.
Here is what I mean. In a recent search on Dice.com for candidates
with C++ experience in the San Francisco Bay Area I uncovered 2916
listings. Of the first 100 job listings that I surveyed, 94% were
posted by recruiting firms, and only 6% were posted directly by
companies. Unlike Flipdog.com,
Dice.com does not let you filter out job listings posted by recruiting
firms. In fact, Dice.com does not distinguish at all between job
listings posted by third-party recruiting firms and job listings
posted by the companies where the work is to be performed. For these
reasons, I do not count Dice.com among the "Contractor-friendly
Job Boards." So you are correct, Dice.com is not a good place
to look for contract assignments where you or your employer of record
(e.g., P.A.C.E.) may sign directly with the client.
Regarding your search for a good resume posting service, let me
say that I have little faith in the broadcast e-mailing (or broadcast
snail mailing) of resumes.
For one thing, by broadcast e-mailing you relinquish all control
over your resume. Also, because you do not know where your resumes
are going there is no opportunity to follow up with decision makers,
or to develop ongoing relationships with individual hiring authorities.
Resumes distributed in this manner simply go into the client's resume
database where they will reside along side all the other resumes
with similar stats. You have no opportunity to establish your value
to the client, or to distinguish yourself from the hoards of nameless,
faceless, warm bodies that are languishing in the client's database.
I prefer a focused, targeted approach. It is much more productive,
both in the short term and in the long term, to market your services
personally and directly to specific, targeted companies.
First, identify those companies that use your particular skillset.
You can do this by searching on the Internet for resumes that contain
keywords describing your skillset and a geographic identifier. For
example, the keywords <Resume, Unix, Systems Engineer, Chicago>
entered at Google.com
returned 4650 results,
of which a large percentage were resumes. It will take a little
digging, but most resumes identify the companies where the resume
owner worked along with the skills they employed while on the job.
These companies are prime prospects for your marketing efforts.
I heartily recommend Flipdog.com
to identify companies that are hiring in specific skillsets. Remember
to uncheck the box that says "Show recruiter & staffing
agency listings." Almost all of the listings are for full-time
positions. Don't let this deter you. Companies that are advertising
for full-time employees with a particular skill set are likely to
go with a Contract Professional "on an interim basis"
or to round out the project team.
Another resource is the searchable, online, classified sections
of local newspapers. Search the classified ads for companies in
your geographic area that are hiring in your skillset. The list
below will get you started.
CareerBuilder
http://www.careerbuilder.com/
CareerBuilder features jobs from 75+ career sites, including the
classified sections of industry giants Tribune Company and Knight
Ridder, and personalized job hunting tools, skills certification,
and great articles. CareerBuilder excludes job listings by recruiting
firms. Job seekers who post their resumes online can block their
resumes from being viewed by designated companies. A positive note:
CareerBuilder does not sell the personal information of job seekers.
About.com Online Newspaper Directory
http://www.about.com/
Enter the keywords <online newspapers> in the search window.
It will return a large list of directories to online newspapers.
Newspapers Online
http://www.newspapers.com/
Newspapers Online provides an easy to use tool for referencing the
world's newspapers. There are links for Within USA, Newspapers by
Country, Business, Industry, Trade, Arts, Classifieds, College,
Specialty, State Press, and Religious. This is an eclectic and surprisingly
comprehensive directory.
Now that you have a list of companies that use your skill set you
need to contact them personally. Use the approach I advocate
in this
article from the October 1, 2000 CENewsletter. This will help
you identify specific hiring authorities within each company.
Broadcasting your resume to thousands of HR departments is easy,
but it is also terribly inefficient. Pursuing direct contacts with
hiring authorities is initially hard, but it gets easier and more
efficient the more you work at it.
Also, the direct approach has a tremendous advantage for those
who pursue it. The direct approach works precisely because it
requires so much effort from the job seeker! Contract Professionals
who market their consulting services directly are more persistent,
more creative and more results-oriented than "generic job seekers"
who simply broadcast their resumes to the wind. Project managers
instinctively know that Contract Professionals who market their
services directly are the creme de la creme. These are the
Contract Professionals that project managers want on their projects.
Will the hiring authority offer you a contracting assignment? The
answer is "Probably not." That is why you will have to
contact many companies and many hiring authorities. Nevertheless,
the chances of landing a high paying assignment by contacting companies
directly are much greater (some say 8 to 10 times greater!) than
by spamming agencies and HR departments with unsolicited resumes.
[By the way, an HR staffer is not the hiring authority.
The hiring authority is the person who actually says "Yes,
this is the one I want." To be effective, you must reach the
actual hiring authority.]
But, here is the most compelling reason why you should contact
companies directly. Every person you contact becomes a valuable
addition to your professional network. These are the people you
will contact by telephone and e-mail every couple of months (whether
you are working or not!) in order to update them about your new
skills, experience, and availability.
You see, every contact you make with a hiring authority is a major
success because it gives you the opportunity to expand you professional
network. Think of your marketing effort as the means to expand your
professional network.
If your goal is find a job you will be repeatedly disappointed,
and the "rejection" will discourage you and quickly paralyze
you. If the goal is to make personal contact with as many hiring
authorities as possible, then your marketing effort will be met
with repeated successes. Through active networking (as opposed to
dogged job hunting) you will be repeatedly encouraged and empowered,
and job offers will appear as if by magic.
Broadcasting unsolicited e-mail and using recruiters does nothing
to develop a powerful professional network. It is only through personal
contact that you develop the personal and professional relationships
that will pay dividends many times over as you build your career
as a Contract Professional.
Project managers prefer to hire people they know personally. This
is especially true in bad economies when project managers can little
afford to make an expensive mistake. So, put on your dialing gloves
and start dialing for dollars. Marketing yourself directly to client
companies could be the highest paying job you ever had.
It is well documented that, human nature being what it is, we tend
to get what we fear. Too often we fear that we won't find work.
And the resulting depression helps us get exactly what we fear.
Instead, fear that your diligent marketing efforts will result in
too many offers. When you get what you fear, call your colleagues
and give them the leftovers. What goes around comes around. -- Signed:
Dungaree Dan
Questions for Dungaree Dan
Send your questions about contract employment to Ask
Dungaree Dan. We will try to answer all of your questions, and
we will publish the most interesting ones in The Contract Employee's
Newsletter.
Return to Table of Contents.
Survival Tactics
Frugal Is As Frugal Does
Those of us who are old enough to remember several recessions appreciate
the wisdom of saving at least six months' worth of living expenses
for the inevitable down time in every economic cycle. If this is
your first recession, congratulations. You are learning one of life's
great lessons: that nothing lasts forever. Not the good times, and
fortunately, not the bad times either.
Good times or bad, but especially during the good times, the first
bill you should pay every month is a 10% contribution into your
emergency fund. Lots of money in a secure, liquid, savings account
is the best medicine for the headache of "recession depression."
At P.A.C.E., we are seeing first hand that clients are paying slower,
bench times between contracts are longer, and rates for the more
"generic" skillsets are lower. And inexperienced contractors
are retreating to the security of full-time employment -- if
they can find a job at all.
This is a good time to learn how little money one needs
to survive. It is also a good time to learn how a frugal lifestyle
can stretch the money you have saved, and ease the anxiety and fear
of being out of work. Let your mantra be "Save during the
good times, stretch during the bad times."
Here is a website that I recommend heartily for those of you who
are ready to simplify your lives and practice the simple joys of
a frugal lifestyle. The site is called The
Simple Living Network, www.simpleliving.net. As the homepage
announces, "The Simple Living Network is a small home-based
business that provides resources and free community services that
may help you live a more simple lifestyle."
The site explains that simple Living (a.k.a. Voluntary Simplicity)
is not about poverty or deprivation. It is about discovering what
is "enough" in your life, and discarding the rest. Sometimes
the process of simplifying may be anything but simple. You may have
to ask yourself some difficult questions and will probably have
to change some of your habits. "Simple" does not necessarily
equal "easy!"
With over 3500 pages of resources and information, The
Simple Living Network, www.simpleliving.net, is a gentle site,
a friendly site, and a good place to visit to find simple solutions
in a complicated (and expensive) world.
Return to Table of Contents.
Resources
Janet Ruhl's Realrates.com
http://www.realrates.com/
Janet Ruhl, host of this popular web site, is the author of several
well-known books about computer consulting (And you can buy them
on her website). Janet lists Tips and Gotchas on contracting culled
from her own experience and submitted by other contractors.
Read the Real Rate Survey with search and sort capability
to find out what your skills are really worth. And don't miss the
searchable Message Board, where you can read and post tips
and commentary relating to your contracting career. This message
board is so active you will want to visit it frequently so that
you don't miss the many current postings before they roll off.
For a nominal cost of $20 per year you can post your profile online
and build a search-engine-friendly web page that announces your
availability, displays your talents, and provides only the contact
information you choose.
Realrates.com is one site that you will want to visit again and
again to review rates and salaries, to post your availability and
search job postings, or just hang out at the Message Board with
newbies and veteran contractors.
Return to Table of Contents.
Contract Employee's
Glossary
Terminology For Contract Professionals
More terms beginning with the letter A from Appendix
B: Glossary of Terms for Contract Professionals of The
Contract Employee's Handbook.
Agreement
An agreement is an arrangement as to a course of action such as
a duly executed and legally binding contract. Examples are employment
agreements, letters of agreement, consulting agreements and subcontracting
agreements, etc.
Americans With Disabilities Act (ADA)
ADA is a federal law that prohibits discrimination against individuals
with physical or mental disabilities in employment, public services
and places of public accommodation. Companies must treat agency
temps the same as their own employees with respect to the provisions
of ADA.
Annual review
The annual review is an insidious practice by employers that lock
steps their employees into a rigid program of externally controlled
promotions and salary increases. Independent contractors and contract
employees are not subject to annual reviews, and are therefore able
to increase their skills, responsibilities, and pay at their own
speed and without interference. Annual reviews are why we refer
to permanent, full-time, salaried employees, as “captive”
employees.
Annual salary
Annual salary is the stated compensation paid to an exempt employee
over the course of a year. Gross wage per pay period is computed
as a fraction of the annual salary. For example, the annual wage
is divided by 12, 24, 26, or 52, for monthly, half-monthly, biweekly,
and weekly pay periods. Partial days are prorated on the basis of
2080 hours per year. See gross wage, hourly wage.
Approved vendor
An approved vendor is a company that has previously qualified to
do business with another company. Approved vendors are sometimes
called preferred vendors. There is nothing special about being an
approved vendor, and approved vendor status does not imply or confer
exclusive access to the client.
Arbitration
A method of alternative dispute resolution in which the disputing
parties agree to abide by the decision of one or more arbitrators.
Articles of incorporation
A document that is filed with the state in order to incorporate.
It typically includes the name and address of the corporation, its
general purpose and the number and type of shares of stock to be
issued. Clients may request a copy of the articles of incorporation
as proof that they are signing a contract with an incorporated business
entity.
Assignment
A specified task or amount of work undertaken by a technical or
professional contractor, as in contract assignment; a project.
Association
An association is group of people who are organized with varying
degrees of formality, who share common interests and have joined
together for a common purpose. An association is not a legal entity,
but it may assume the status of legal entity if it has a charter
and shareholders, and if it operates like a corporation. For example,
P.A.C.E. - Professional Association for Contract Employment is a for-profit
association operating as a corporation, Jerzy, Inc., chartered in
California and formally registered in every state where it does
business.
At-will employment
At-will employment is an employment relationship in which both the
employer and the employee have the right to terminate the employment
relationship at any time, for any reason, and without prejudice.
Nevertheless, employers may not fire employees in a way that discriminates
illegally, violates public policy, or conflicts with written or
implied promises that the employer made concerning the length of
employment or grounds for termination. Not all states allow at-will
employment.
Independent contractor relationships are seldom at will unless
specified as such in a contract between the independent contractor
and the client. This distinction is one of the common law factors
that the IRS weighs in determining the employment status of individual
workers.
Audit
A formal examination of an organization's or individual's accounts
or financial situation. Government agencies conduct audits of company
financial records and personnel files in order to determine the
tax filing status of individual workers. It is during an IRS audit,
for example, that the IRS may attempt to reclassify an independent
contractor as an employee of the company for which the contractor
worked. See tax filing status.
Auto Allowance
A fixed payment paid to an employee by an employer to reimburse
the cost of operating one’s automobile while on company business.
An auto allowance eliminates the need to submit actual receipts
and mileage logs in order to document reimbursable auto expenses.
Auto allowances are tax-exempt.
Return to Table of Contents
P.A.C.E. News
FREE Long Term Disability Income Protection
I am extremely excited to announce that effective November 1, P.A.C.E.
will provide FREE—Yes, I said FREE—Long
Term Disability Insurance to every active P.A.C.E. Division Manager.
The plan pays 60% of gross wage up to $6000 per month with only
a 90-day elimination period.
Additionally, P.A.C.E. Division Managers can purchase, at deeply
discounted rates, a supplemental LTD insurance policy that increases
coverage to 75% of gross wage if you are unable to work, and 100%
of gross wage if your disability involves at least two "activities
of daily living" (ADLs).
To my knowledge, the P.A.C.E. Long Term Disability Income Protection
Plan offers the most aggressive LTD coverage available to ANY employee
in ANY company in the USA. The plan is custom designed by P.A.C.E.
for highly compensated Contract Professionals, and it is only available
to P.A.C.E. employees.
Imagine what would happen if you were unable to work because of
a disabling injury or illness. You and your family could face financial
ruin. A guaranteed source of income during long periods of disability
is an absolute necessity for every Contract Professional. This is
the purpose of LTD insurance.
Unfortunately, very few Contract Professionals can qualify for
LTD insurance, let alone afford it. And purchasing good, affordable,
LTD insurance on the street is risky, if not impossible, especially
if you have one or more preexisting medical conditions. A history
of mental illness, even marriage counseling, back problems, high
blood pressure, diabetes, tobacco usage, and a host of relatively
minor conditions can rule out any hope of qualifying for individual
LTD coverage.
The P.A.C.E. Long Term Disability Income Protection Plan is just
one reason why self-reliant Contract Professionals throughout the
USA are choosing P.A.C.E. as an alternative to self-employment.
It may be the only reason you need to join P.A.C.E.
Here is a breakdown of the incredible P.A.C.E. Long Term Disability
Income Protection Plan.
Group LTD Insurance
| Cost |
FREE to all P.A.C.E. Division
Managers. |
| Type of Plan |
Group Insurance. |
| Qualification |
Guarantee Issue. You cannot be denied
coverage because of a preexisting medical condition. |
| New Employees |
Coverage begins on first of month
following your first full month of employment. |
| Benefit Level |
60% of gross wage up to $6000 per
month. |
| Elimination Period |
90 Days from onset of disability. |
| Term |
To age 65. First two years own occupation. |
| Tax Status |
Benefit is taxed as ordinary income. |
| Portability |
No. Must be P.A.C.E. employee to maintain
coverage. |
Individual Supplemental LTD Insurance
| Cost |
Deeply discounted unisex rates; 60%
to 70% below street rates for individual coverage. |
| Type of Plan |
Individual Supplemental Insurance. |
| Qualification |
Simplified Acceptance. Higher rates
for tobacco usage. |
| New Employees |
Coverage begins on first of month
following your first full month of employment. |
| Benefit Level |
Additional 15% of gross wage up to $2000 per month for a
total of 75% up to $8000. Disability Plus Benefit pays 100%
of gross wage with loss of two or more activities of daily
living (ADLs).
|
| Elimination Period |
90 Days from onset of disability. |
| Term |
To age 65. First two years own occupation. |
| Tax Status |
Premium is paid with after-tax dollars.
Benefit is tax-exempt. |
| Portability |
Yes. Take the policy with you if you
terminate from P.A.C.E. |
P.A.C.E. is a Win - Win - Win - Win Solution for Downsized Employees,
Contract Employees, Independent Contractors, and Client Companies.
Check out P.A.C.E.
for the best benefits package available to ANY employee in ANY company
in the USA.
Return to Table of Contents.
Contract Employee's
Handbook
Announcing Appendix B: Glossary of Terms for Contract
Professionals
The Contract
Employee's Handbook has a new chapter. It is Appendix
B: Glossary of Terms for Contract Professionals.
Appendix B has some 350 terms and definitions relating to the general
subject of technical and professional contracting. This glossary
is by no means authoritative or complete. But it adequately covers
the ground. I have gleaned the definitions from various books in
my library, online articles, dictionaries, and specialized online
glossaries.
The glossary is a PDF document. Although the glossary is approximately
70 pages in length, you can easily select letter headings in the
bookmarks column in the left hand margin. Additionally, you can
use the Find function in Acrobat Reader to locate specific words
anywhere in the document. Just click on the "binoculars"
icon and enter a keyword in the "Find" window.
You may have noticed that I have included glossary terms as a feature
in this and prior issues of this newsletter. I will continue to
feature selected glossary terms in future issues as well.
I encourage you to visit Appendix B: Glossary of Terms for Contract
Professionals any time you have a question about contracting
terminology. Let me know if there is a definition in the glossary
that missed the mark. Have I left something out? What would you
like to see that isn’t there? Send your suggestions to suggestion@pacepros.com
The glossary will continue to grow as I encounter more terminology
relating to technical and professional contracting, and as I respond
to your suggestions for improvements.
Return to Table of Contents.
Contract Employee's
Workshop
Have LCD Projector, Will Travel
I am developing an all-day Saturday Workshop for technical and
professional contractors. I call it The Contract Employee's Workshop.
(How original!)
During the initial shakedown period I will offer the workshop in
the San Francisco Bay Area. Cost of admission will be in the neighborhood
of $50, provided I can locate an inexpensive yet comfortable venue
large enough to hold at least 50 people. It would be nice to have
a corporate sponsor for the workshop, especially if I don't have
to sell my soul (and halo) to qualify for their support. Ideas anyone?
Participants will leave the workshop with a solid understanding
of how this crazy contracting industry works. Agency contractors
will learn how to increase their earnings by 30% to 50% on their
very next contract assignment. The handouts alone are worth the
cost of admission.
After the initial shakedown I'll take the workshop on the road
to those cities across the US that express the greatest interest
in The Contract Employee's Workshop.
I'm open to suggestions. E-mail your ideas and suggestions to Workshop@pacepros.com
Return to Table of Contents.
The Contract Employee's
Project
The Contract Employee's Project is the larger context under which
the following interrelated vehicles operate to promote and defend
the interests of Contract Professionals:
Copyright and
Publication Info
Copyright (c) 2001, James R. Ziegler. All rights reserved.
You may copy or forward this free publication provided it is left
intact with all links and this notice unchanged. Any unauthorized
duplication, including republication in part or in full for commercial
use, is an infringement of copyright.
Published by:
P.A.C.E. - Professional Association for Contract Employment
1355 Willow Way, Suite 244
Concord, CA 94520
USA
http://www.pacepros.com/
Editor:
James R. Ziegler, Ph.D.
Executive Director
P.A.C.E. -- Professional Association for Contract Employment
(925) 680-0200
ziegler@pacepros.com
Return to Table of Contents.
Disclaimer
The Contract Employee's Newsletter is designed to provide information
in regard to the subject matter covered. Use is granted with the
understanding that the publisher and authors are not engaged in
rendering legal or financial advice. If expert assistance is required
you should seek the services of a competent professional.
The purpose of this information is to educate and entertain. The
publisher and contributors shall have neither liability nor responsibility
to any person or entity with respect to any loss or damage caused,
or alleged to be caused, directly or indirectly, by the information
contained in this Newsletter or by information contained in any
web site or resource referenced by citation or hypertext link within
the pages of this Newsletter.
Return to Table of Contents.
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Return to Table of Contents.
Sign-off
I hope you have found the information in this newsletter to be
interesting, informative, and provocative. I encourage you to share
the CENewsletter with your friends, colleagues, coworkers, clients,
and agency recruiters.
Why clients? Because you need every ally you can get. Why agency
recruiters? Because they need to know the jig is up.
Wishing you success in your contracting career,
James R. Ziegler, Ph.D.
Executive Director
P.A.C.E. -- Professional Association for Contract Employment
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