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Contract Employee's Newsletter
Helping Contract Professionals
Manage Their Careers
January 15, 2002
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
and time allows. 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?
Thank you for your excellent suggestions for future newsletter
topics. Keep 'em coming. Chances are, if a topic interests you as
a Contract Professional it will certainly interest the majority
of our readers.
Guest Appearances
I would like very much to publish short guest contributions
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 professional
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 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.
News and Views
IEEE-USA Salary Survey Reveals that Asian Americans
in High Tech Have the Highest Incomes
A strident cry often heard during economic downturns urges Americans
to "send the foreign workers back to where they came from"
because "foreign workers settle for low wages and thereby depress
the wages of American Citizens." All this whining is, of course,
sour grapes. And we might excuse it as merely the voice of fear
in the face of financial hardship if it were not so blatantly false,
if not outright racist.
Most foreign technical workers enter the US with an employer-sponsored,
H-1B, nonimmigrant work visa. In order to qualify for an H-1B visa,
foreign workers must demonstrate the ability to work in the specialty
occupation for which they are being hired by the sponsoring employer.
The H-1B visa requires a bachelors degree or higher, or a position
of distinguished merit or ability.
No doubt, some H-1B visas are obtained fraudulently, but I am confident
that the number is small. The INS requires that every H-1B applicant
undergo a strict credentials evaluation by certified and bonded
services. More troublesome, I am sure, are the millions of inflated
resumes submitted by unemployed workers to HR databases and online
resume banks.
The strict INS qualification criteria ensure that H-1B visa holders
are highly skilled and capable workers. They could not qualify to
work in the US otherwise.
A recent salary survey conducted by the highly respected Institute
of Electrical and Electronics Engineers, Inc. (IEEE) has documented
conclusively that foreign engineers are in fact the highest paid
engineers, earning on average $500 per month more than their non-Hispanic
white counterparts.
Among 9500 IEEE members in the electrotechnology and information
technology fields who responded to the salary survey, Asian-Americans
(e.g., Indian, Chinese, Japanese) reported the highest median
incomes. Asian-Americans earned on average $99,000, compared to
non-Hispanic white members who earned $93,000. Hispanic members
reported a median of $86,500, and non-Hispanic African Americans
took home $86,340.
Contrary to the alarmist positions of various xenophobic
technical organizations, and diatribes by a certain misguided
and widely quoted academician (search Google.com
with the keywords <Norman Matloff H-1B> for more provocative
articles), Asian-American workers actually raise the
salary standard for all technical workers. Not only do Asian-American
workers make it possible for American companies to start more projects
and hire more American workers, but Asian-American workers also
raise the ceiling on high-tech wages for everyone.
The 2001 edition of the IEEE-USA Salary & Fringe Benefit Survey
may be ordered by IEEE members for US$74.95 or non-members for US$149.95.
To order, visit IEEE-USA.
Return to Table of Contents.
Kudos and Testimonials
What People Are Saying About The Contract Employee's
Project
"The information contained in your handbook and newsletters
is excellent and very much appreciated. Please keep up the excellent
job and service. I will attempt to utilize P.A.C.E. services at
every opportunity. Thank you." -- Signed T.S.
[Ed. Note: Thank you for the positive feedback. The Contract
Employee's Newsletter is like an "Op Ed Page" for Contract
Professionals. I try to create content that is provocative and useful
to all Contract Professionals.]
"This site is a FANTASTIC resource. I am a recently laid off
Consulting Firm employee looking to begin temporary, full-time contracting
positions in Business Intelligence. Thanks for every nugget!"
[ED. Note: Won't it be nice to finally get paid what your
direct consulting services are worth on the open market.]
Return to Table of Contents.
Marketing Tips
Search For Online Resumes To Locate Clients And
Build A Powerful, Professional Network
Conventional wisdom dictates that we must search for job descriptions
if we want to find a job. That's one approach. Sometimes it even
works. But, just for the heck of it I want to suggest a different
approach.
This Marketing Tip could turn out to be the most powerful tool
in your marketing toolbox. Let's set the scene. Let's say you want
to market your Lotus Notes Developer Skills to companies in Santa
Clara, but you don't know what companies to call that actually use
Lotus Notes. And, even if you did know what companies use Lotus
Notes, you don't know anything about them -- For example: Who runs
the project? What kind of work do they need to have done? What is
it like to work there? Do they pay well? Do they pay on time?
To answer these questions I go to Google.com
and enter the following keywords [omit the angle brackets] <resume
"Lotus Notes" "Santa Clara">. My Google search
returns a
list of 450 web pages containing the text strings "Lotus
Notes" and "Santa Clara". It looks like about 90%
of the web pages are online resumes.
My first goal in this exercise is to identify as many companies
and as many individuals as possible that use Lotus Notes.
I began by opening an online resume. Using the search feature in
my browser <Ctrl + f> I enter <Lotus> and click <Find
Next>.
During this exercise I identify companies (which may or may not
still be in business) that at one time or another employed one or
more individuals who report using Lotus Notes in their resume. A
search of the first 100 links in the search results uncovers the
following list of companies: FVC.com, 3Com Corporation, Aspirian
Inc., Hewlett Packard, NVidia, IBM Corporation, UB Networks, National
Semiconductor, Intel Corp., Worldtalk Corporation, PeopleSoft Inc.,
TEK Systems, Applied Materials, Franklin Resources, Inc., Collegis,
Inc., PARAGON Technical, Uptime Computer Solutions Inc., Sun Microsystems
Microelectronics Sales, and the list goes on.
I repeat the exercise using the names of surrounding cities to
identify even more companies that use my skill set.
Not every link in the search result is active. Not every link is
a resume. Not every resume contains company names. Not every company
in the resumes uses Lotus Notes, and not every resume writer still
lives in my target area. But, every resume, I repeat, every resume,
contains contact information. Name, postal address, e-mail address,
and possibly a phone number for another human being who uses
Lotus Notes.
My second goal in this exercise is to contact Lotus Notes professionals
and develop a professional relationship with them. I want to add
them to my professional network and give them a reason to know who
I am, and to recommend me whenever appropriate for Lotus Notes consulting
gigs. I do this one contact at a time, in person if possible (I'll
buy lunch or beer), chatting over the telephone, by e-mail exchange,
and by snail mail if all else fails.
It helps to use a contact management tool like ACT or Goldmine,
but good old MS Outlook does a fine job. I keep a log of all my
conversations and messages. Actually, a spiral notebook works well
in a pinch, and I can take it with me to networking meetings.
Here is the pitch:
Hi, my name is [Your Real Name]. I work as a Lotus Notes developer.
I was searching the web for companies that use Lotus Notes and
came across your resume. I'm building my professional network,
and I wondered if I might chat with you a bit about Lotus Notes
and the companies that use Lotus Notes. Maybe we can exchange
leads and opportunities.
I expect to uncover more job leads than I can use, and I plan
to send any extra leads to my network. I notice that you worked
with Lotus Notes at 3Com. Can you tell me a little bit about their
implementation?
Ask a few questions about the environment. About who manages development
and maintenance? Does he/she know about other companies and individuals
that use Lotus Notes? Confirm the contact information, and send
an e-mail and snail mail with your marketing materials and your
contact information. Hard copy and a handwritten thank-you note
are highly recommended. It is the extra effort that sets you apart.
I must stress three important points:
- This exercise is about making friends with new people
who share your skill set.
- You will be most successful if you give more than you
receive.
- And always follow through with any promise or offer that
you make.
Keep it casual. Chat about whatever seems appropriate, but always
get the other person's current contact info. Your chances of getting
new work will rise exponentially with the number of people you meet.
No kidding. Exponentially!
You will soon begin to make cross connections, and one way or another
you will get to know most of the key movers in the Lotus Notes arena.
It is so much easier to "cold call" a project manager
and say that you were referred by so and so, and then discover that
you and the project manager "know" several of the same
people. Talk about a powerful marketing tool! Being able to call
a project manager with a personal referral and then name names of
mutual friends is absolutely the best.
Let me share a personal story about how this technique accidentally
landed me a one-year consulting position in beautiful Hawaii. I
had been an assistant professor of Zoology at the University of
Massachusetts, Amherst, where I was laid off during a 10% downsizing
of all state employees. As a recently hired university teacher I
had low seniority, but it also didn't help matters that back then
my teaching skills were marginal at best. [Believe me, my teaching
skills today are much improved.]
This was in 1976 when the United States was still reeling from
the Viet Nam war and from the economic whiplash caused by OPEC's
oil embargo. America was in the throes of a recession almost twice
as severe as the current one, in which 1.7 million workers had lost
their jobs (versus 1.3 million today) and the jobless rate had peaked
at 9.0% (versus just 5.8% today).
Returning to my home town of Fresno, CA, I was trying to figure
out what to do next. It was Friday afternoon. In desperation I opened
the phone book and called the Western Regional Headquarters of the
U.S. Department of Agriculture, which had its offices in Fresno.
I asked if I might speak with the Regional Director. When he picked
up the phone I gave him a brief explanation of my circumstances,
and asked if he might have work for a displaced theoretical biologist.
He asked me to meet him in his office at 9:00 am Monday morning.
I arrived early, and the meeting started at 9:00 am sharp. The
director's first question was "Do you know Ron Prokopy?"
I said yes, I knew him very well. I said that Ron worked in the
Entomology Department at UMass, and I explained what I knew about
Ron's research with Fruit Flies (not the fruit flies used in genetics
experiments, but a really nasty group of fruit and vegetable pests
that includes the infamous Mediterranean Fruit Fly). Next the Director
asked if I knew Ken Hagan, the world famous expert on predatory
ladybird beetles and biological control. I said yes, I knew Ken
from a brief visit to the Division of Biological Control at the
University of California, Berkeley. The Regional Director explained
that Dr. Hagan had developed an artificial diet that allowed the
USDA to rear Fruit Flies by the millions in its laboratory in Hawaii.
Next he asked "Do you know D.L. Chambers?" I said, yes,
I had met Dr. Chambers while visiting my former college roommate,
Patrick Greany, at the USDA laboratory in Gainesville, FL. Patrick,
it turns out, was doing research in Gainesville on parasites that
attacked the dreaded Mexican Fruit Fly and related species. D.L.
Chambers was the director of the Gainesville laboratory. My interviewer
explained that Chambers had set up the USDA Hawaiian Fruit Fly Laboratory
in Manoa Valley, Oahu.
Next I was asked if I knew a certain geneticist who studied the
adaptive evolution of Cherry Fruit Flies in Wisconsin. I explained
that I had met this individual when he gave a talk at either the
University of Chicago (my graduate school alma mater) or at UMass,
I don't recall now which it was. I briefly described what I knew
about this geneticist's groundbreaking work.
It turns out that quite by accident I also knew several other key
players in the field of Fruit Fly research. In fact, I had personally
met most of the key U.S. players in this small but very important
community of applied scientists.
Let me be quite clear here. I was a theoretical biologist.
I really knew very little about Mediterranean Fruit Flies and their
ilk. I had never conducted either theoretical or applied research
on the little beasts. But somehow I had met virtually everyone who
was anyone in the field of applied Fruit Fly research.
My meeting with the Regional Director had started at 9:00 am sharp.
By 9:15 am I had a firm offer to work as a visiting research scientist
for one year at the Hawaiian Fruit Fly Laboratory in lovely Manoa
Valley on the island of Oahu. As an independent contractor my income
was almost double what my salary had been as a captive employee
at the University of Massachusetts.
If this could happen to me by sheer accident, imagine what can
happen to you when you make a concerted effort to meet (in person,
by phone, or by e-mail) most of the local key players in your skill
set. No doubt about it, searching for resumes on the Internet,
and getting to know their authors, could be the most powerful tool
in your marketing toolbox.
Return to Table of Contents.
Business Basics
New Individual(k) Retirement Plan For Owner-only
Businesses
Self-employed, independent contractors will benefit from sweeping
pension reform legislation that went into effect on January 1, 2002.
The legislation creates a simplified 401(k) plan, called an Individual(k),
designed specifically for owner-only businesses with no employees
or with only temporary or seasonal employees. Owner-only businesses
may establish an Individual(k) plan for any tax year that begins
on or after January 1, 2002. Both incorporated and unincorporated
businesses, including sole proprietorships, partnerships and corporations,
may set up an Individual(k) plan.
The Individual(k) plan has the same upper limits as a Keogh plan
or standard 401(k) plan, but with simpler reporting requirements
and presumably lower maintenance costs. The Individual(k) plan lets
highly compensated, self-employed contractors set aside more money
faster than with other tax-qualified plans such as Simple IRA, SEP
IRA, Profit Sharing Plans, and Money Purchase Plans.
Ask your tax accountant or financial advisor if this plan is available
for you. For more information on the Individual(k) plan, click here:
www.individual-k.com.
Contract Professionals who choose not to manage their own benefits
infrastructure may want to consider the employer of record service
offered by P.A.C.E. The P.A.C.E.
401(k) Retirement Savings Plan has the same upper limits as
a Keogh plan or Individual(k) plan, and is available to every P.A.C.E.
Division Manager.
The P.A.C.E. 401(k) Retirement Savings Plan is an extremely aggressive,
100% self-directed, retirement savings program designed for highly
compensated employees. It is unexcelled by any employer of record
service in the country. In 2002 you may contribute pretax dollars
equal to 25% of gross earnings up to $40,000 per year into a Charles
Schwab Personal Choice Retirement Savings account. There is no waiting
period to qualify, and contributions are immediately vested.
You have the freedom to customize your retirement portfolio by
investing in any and all publicly traded stocks, bonds, and mutual
funds, of which 1100 are no load and have no transaction fee. As
a P.A.C.E. Division Manager you have virtually the same investment
options as a retail brokerage client of Charles Schwab & Co.
No other retirement account offers a greater choice of tax-deferred
investment options.
Return to Table of Contents.
Ask Dungaree Dan
May I Add A Feature To An Existing Product That
I Learned About In A Book?
Q: Dear Dan -- I have an idea for adding a feature to an
existing product. This will definitely make the vendor more competitive
and generate more revenue. The problem is that the idea of this
feature is from a book and the author has not given permission to
use the idea/implementation commercially. How can I resolve this
issue? I am planning to get a direct client using this idea, if
this issue can be resolved. Please advise. -- Signed: Careful
Consultant
A: Dear Careful Consultant -- I commend you on thinking
and acting like a true value-added consultant and vendor of processional
services. By marketing your ability to make things better for your
clients you personify the role of a self-reliant Contract Professional.
Your approach creates a compelling reason for project managers
to interview you and hire you for interesting and challenging projects.
Generally speaking, new procedures and "good ideas" are
not considered proprietary information, but innovations and improvements
to existing products may be protected by one or more patents. I
do not know the specifics of your situation, so it is not clear
if someone else's proprietary information is involved.
I recommend that you contact an attorney who specializes in intellectual
property rights, such as patent, copyright, trade mark, and service
mark law. It will certainly be worth the time and money to make
sure that your idea is not infringing on someone else's rights.
I also suggest that you contact the author of the book/article,
and ask him or her about the proprietary nature of the idea. It
may turn out that your idea is in the public domain, and that anyone
can use it without having to pay a royalty or licensing fee.
My gut feeling is that an idea published in a book intended for
general distribution is probably in the public domain, but don't
take my word for it. I am really not authorized to give legal advice,
and an intellectual property rights attorney will be able to give
you much better advice regarding your specific situation. -- 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.
Contract Employee's
Glossary
Terminology For Contract Professionals
More terms from Appendix
B: Glossary of Terms for Contract Professionals of The
Contract Employee's Handbook.
Consideration
The concept of consideration goes to the core of contract law. Consideration
is something of value to the parties making a contract. A contract
is founded on the exchange of one form of consideration for another.
For example, a Contract Professional may agree to develop a software
application in return for the consideration of $150 per hour. The
client agrees to pay $150 per hour in return for the consideration
of a properly functioning software application. Each party provides
something of value to the other party in exchange for something
of value received. To be legally binding, a contract or a contract
clause must show consideration.
Consultant
Consultants consult. That is, consultants are skilled professionals
who are paid to provide solutions, usually in the form of specific
deliverables. With this in mind, I define a consultant is a project-oriented
solution provider. Most consultants are independent businesses,
and they almost always qualify as IRS-compliant independent contractors.
Unfortunately, the term consultant is frequently misused by ordinary
sales people, including hack recruiters, who seek to glorify their
role by co-opting the moniker of a highly respected professional.
Consulting firm
A consulting firm is an outside vendor that provides the services
of a consultant. Consulting firms may subcontract with individual
contractors and contract employment agencies, but most of their
workers are permanent, salaried, benefited, regular employees. I
refer to the regular employees of a consulting firm as captive
contractors to distinguish them from hourly-paid contract employees
and self-employed independent contractors.
Contingent
Dictionaries variously define contingent as relating to something
happening by chance or unforeseen causes, subject to chance or unseen
effects, intended for use in circumstances not completely foreseen,
or dependent on or conditioned by something else.
Contingent employment arrangement
The phrase “contingent employment arrangements” was coined
by Audrey Freedman at a 1985 conference on employment security and
was used to “connote conditionality.” Since the phrase’s
original usage, contingent employment has been identified with a
wide range of employment practices, including part-time work, temporary
work, employee leasing, self-employment, contracting out, and home-based
work. As a result, the operational definition of a contingent job
has become any arrangement which differs from full-time, permanent,
wage and salary employment. (See: On the Definition of Contingent
Work, http://stats.bls.gov/opub/mlr/1989/12/art2full.pdf)
Contingent recruiter
A contingent recruiter is a third-party individual or firm that
recruits regular full-time employees for companies who pay on a
contingent basis. That is, the recruiter collects a commission,
usually 25 to 30% of the new recruit’s anticipated annual salary,
only after the company actually hires the individual. Recruiters
usually are required to return payment or replace an employee at
no charge if the employee quits before 90 days of continuous employment.
Contingent recruiters often mitigate the risk of losing their commission
during the first 90 days of employment by negotiating a contract-to-hire
arrangement in which the candidate works as a contract employee
prior to being hired full-time.
Contract-to-hire arrangements through a recruiting firm are bad
news. The recruiting firm generally bills the client at an hourly
billing rate equal to 1/1000th of the new recruit’s proposed
annual salary (the divide-by-1000 rule of thumb). It invariably
pays the new recruit at an hourly wage equal to one-half of that
amount. Contract-to-hire recruits receive no benefits.
Contingent staffing
Contingent staffing refers to the placement and employment of temporary
employees.
Contingent work
Labor market analysts use the term contingent work to refer to flexible
work arrangements that do not involve full-time wage and salary
workers. The term “contingent work” was coined by Audrey
Freedman in 1985 to describe “conditional and transitory employment
arrangements as initiated by a need for labor--usually because a
company has an increased demand for a particular service or a product
or technology, at a particular place, at a particular time.”
Contingent worker
An individual who performs contingent work. Essentially, a contingent
worker is any worker who is not a regular, full-time employee.
Return to Table of Contents
Contract Employee's
Workshop
Next Stop, Irvine, CA
Silicon Valley CEWorkshop was a rousing success
I am pleased to report that the inaugural Contract Employee's Workshop
in Silicon Valley was a great success. Feedback by attendees has
been overwhelmingly positive.
The next CEWorkshop is tentatively scheduled for March 16, 2002
in Irvine, CA, in the heart of Southern California's "Technology
Coast" and Orange County.
Visit the CEWorkshop
Agenda to view topics covered during this valuable event.
Seeking a meeting space
I am looking for an inexpensive (or free) venue in Irvine that will
accommodate 50 to 65 participants, seated comfortably at tables.
Please let me know if you are connected to a professional organization
or company that might have a suitable meeting space that we can
use for the CEWorkshop.
In the meantime watch this space for more details.
I am always open to your suggestions. E-mail your ideas and suggestions
for the CEWorkshop 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:
- The Contract Employee's Handbook
- The Contract Employee's Newsletter
- The Contract Employee's Workshop
- Professional Association for Contract Employment (P.A.C.E.)
Return to Table of Contents.
Copyright and
Publication Info
Copyright (c) 2002, 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
U.S.A.
http://www.pacepros.com/
Editor:
James R. Ziegler, Ph.D.
Executive Director
P.A.C.E. -- Professional Association for Contract Employment
(925) 680-0200
cenewsletters@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.
Subscribe to The Contract Employee's
Newsletter
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Newsletter: Sign Up Now! Useful News & Updates
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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