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Contract Employee's Newsletter
Helping Contract Professionals
Manage Their Careers
February 01, 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.
Kudos and Testimonials
What People Are Saying About The Contract Employee's
Project
- I want to compliment you on your newsletter. It is simply outstanding.
Keep up the great work. -- Wm H. Thompson, The
Thompson Group.
- Loved your article
on using google to find companies. All I can do is kick myself
and say "why didn't I think of that?" But I'm glad YOU
thought of it! It's genius! -- Mary-Ellen Mort, Editor of JobStar.org.
- Really great stuff, Mr. Ziegler. Thanks for the great work.
I am really looking forward to your Marketing Tips, as finding
the gigs right now seems to be my biggest constraint. Really enjoy
reading your insights. -- Thx. John
[Note: I am so very grateful for the positive feedback I have been
receiving. The idea of searching for resumes on the Internet as
a powerful way to find companies and build one's professional network
came to me as an epiphany only a few weeks ago. The resulting Marketing
Tip in the last issue of the CENewsletter has generated many e-mails
like the ones above. Thank you!
Do you use a particularly clever or useful "trick of the trade"
in marketing your consulting services directly to clients? Mail
your Marketing Tips to suggestion@pacepros.com.
I'll feature your trick in the CENewsletter with full attribution.]
Return to Table of Contents.
Business Basics
Ten Tips For Getting Hired As A Computer (or any
other kind of) Consultant
The web site of the Independent
Computer Consultants Association, Northern California Chapter,
has a list of "10 Tips for Hiring Computer Consultants."
The list is Copyright (c) 2000, EDP Consulting, Inc. - All Rights
Reserved.
I thought I would turn the list around and rephrase it from the
point of view of the Contract Professional. My apologies to the
ICCA and to the author, Jon Seidel of EDP
Consulting, Inc.
- Pick your consulting projects wisely. Use the methods
in the Marketing Tip called "Search For Online Resumes
To Locate Clients And Build A Powerful, Professional Network"
from the January
15, 2002 CENewsletter to identify and target specific companies
that may need your consulting services. Use these methods to identify
former employees of these companies that share your skill set,
and ask them about their former companies. Use the resources in
the article called "Getting The Skinny On Prospective
Clients" from the December
01, 2001 CENewsletter, to thoroughly research prospective
clients.
- Manage Expectations. Propose a specific solution and
negotiate a specific Statement of Work that outlines the scope
and requirements of the project. This will allow the client to
evaluate your work, and will help you to focus on tasks that are
within the stated scope and requirements. Submit regular status
reports that document your progress, and have the client sign
off on completed work. Use the methods in the Marketing Tip called
"Letters of Recommendation That Scream WOW!"
from the December
15, 2001 CENewsletter, to document your progress.
- Interview the client, not the other way around. Focus
on their needs, not yours. Spend the interview asking questions
about the client's business, their requirements, and their expected
outcomes. Answer questions from the client as briefly as possible,
and frame your answers in terms of how your particular expertise
will help the client's specific, immediate needs. Employers interview
prospective employees to see if they are a match for the company.
Vendors, on the other hand, interview the prospective client to
ensure that they understand the client's wants and needs in order
to propose the best possible solution. In an interview the client
should be doing most of the talking.
- Market your value to the client, not your price. If your
price is cheap, clients will expect a cheap solution. Emphasize
your value as a quality solution provider. Project the image of
a permanent, full-time consultant, not that of a down-and-out,
out-of-work employee. Vendors are never unemployed, yet
they are always looking for work. Prepare professional
(but not necessarily expensive) marketing collateral such as business
cards, skills summary (AKA functional resume), description of
past projects, and portfolio of supporting documentation such
as letters of recommendation, and samples of prior work. Create
a professional web site. Pay someone to build it if necessary.
An amateur web site is worse than no web site at all.
- Develop clear and concise communication skills. If you
have a strong regional, national, or ethnic accent, or your writing
skills are weak, enroll in a course at your community college
to learn how to speak and write standard, American English. Poor
diction, spelling, punctuation, and grammar suggest poor performance
in other areas as well. Check the spelling and grammar of everything
you send to prospective clients. Avoid jargon and buzz-words.
Being overly clear is preferable to being unclear. If you can't
explain yourself clearly in e-mail exchanges and during interviews
then your client is justified in expecting other communications
problems throughout the assignment.
- Nurture and protect your references. Regardless of what
you read in the technical journals, your strongest credential
is not among the list of acronyms in your skills profile. Rather,
your strongest credential is your reputation. Having good references
is how you validate your good reputation. Never give your
references' contact information to a recruiter. They will only
misuse this information for their own gain. Reserve this precious
resource for the client. Use the methods in the Marketing Tip
called "Letters of Recommendation That Scream WOW!"
from the December
15, 2001 CENewsletter, to create killer letters of recommendation
that you can personally deliver to your client during the interview.
- Actively participate in one or more professional organizations.
Your active participation in national organizations for consultants
in your skillset signifies to the client a long-term commitment
to the consulting profession and on-going peer relationships.
Professional organizations are excellent resources for building
and nurturing a powerful professional network. Professionals belong
to professional organizations. Amateurs and looky-loos do not.
- Insist on a written contract. At a minimum, a contract
identifies the nature of the relationship between the parties,
and specifies start dates and termination dates, project scope
and requirements, mileposts, payment terms, and other conditions
as required by the parties. Create your own independent contractor
agreement using examples easily downloaded from the Internet.
In your favorite search engine enter the keywords "sample
contract" or "sample agreement" "independent
contractor" followed by keywords for your skillset. For
example < "sample contract" "independent contractor"
web site developer >, or < "sample agreement"
"independent contractor" software developer >, or
simply < "sample contract" "independent contractor"
>. Understand contract language and terminology. If the client
proposes that you use the client's contract read it carefully
and add/subtract/edit contract language to meet your requirements.
Check with professional organizations that serve your skillset.
Many provide sample contracts for their members.
- Demonstrate your ongoing, long term commitment to excellence.
Develop a comprehensive portfolio of past work and former
clients. Your client wants a consultant who is committed to the
relationship -- not just a "one-shot" assignment. Present
yourself to companies as a business, as an outside vendor.
Do not talk with HR. Out-of-work employees talk with HR. As a
consultant and Contract Professional you must talk only with project
managers, directors, purchasing agents or procurement. For example,
the copier salesperson doesn't talk to HR. The office supply salesperson
doesn't talk to HR. The facilities management salesperson doesn't
talk to HR. Vendors of consulting services talk only with
buyers of consulting services, and HR does not buy consulting
services. Use the methods in the Marketing Tip called "You
Are A Vendor, So Market Yourself Like One" from the October
01, 2001 CENewsletter.
- Avoid conflicts of interest. There is a maxim in consulting
that goes, "When you hire a consultant you are hiring
your competition." A consultant who works for one company
today may work for that company's competitor tomorrow, or the
consultant may later work for a client of the company as a direct
competitor. You must be willing to agree not to exploit your professional
relationship with a company in a way that may harm the company.
This is the purpose of nondisclosure and nonsolicitation clauses
in independent contractor agreements. Moreover, companies want
assurance that your advice is unbiased and free from undue influence
by a particular vendor.
- And finally, a bonus tip for after the contract is signed.
Manage the relationship going forward in a way that reinforces
your role as an independent, outside vendor to the client. Scrupulously
avoid any appearance that you might somehow qualify as a common
law employee of your client. Work on your own schedule, consistent
with the requirements of your client, but meet regularly with
the project manager to review the progress of your project, and
to make sure that everything is on-track and on-schedule.
Return to Table of Contents.
Ask Dungaree Dan
"Client Cuts Rate To My Agency" Redux
Q: Dear Dan -- I have worked for the past four years through
a large contract employment agency at a large automotive company
in Michigan. This contract firm has about 200 contract employees
working for this automotive firm.
Recently, the automotive company has asked their automotive parts
suppliers and the contract companies that service them to cut their
charges to the automotive company by 7%. Last week, I was notified
by my Contract Employer that our hourly wages will be cut by 7%
due to the cost cutback requested by the automotive company. Is
this legal? Can a contract company do this to their employees? Shouldn't
they have come to us with options?
I have worked hard to earn the increases I have received over the
past four years only to have them "stolen" from me. Is
there anything contract employees can do? Is there any legislation
out there to protect us since the use of contract employment staffing
is a growing business, a business that large companies are beginning
to use to cut their costs.
I truly would appreciate a reply. I would like some answers so
I can try and understand this whole thing. -- Signed: Mad in
Michigan
A: Dear Mad -- Boy, here we go again. I answered this question
in "The Free Market Economy Cuts Both Ways" in
the December
15, 2001 issue of the CENewsletter. In this article I framed
my answer around the matter of supply and demand in a free and open
marketplace.
Let me try again to answer your particular question by taking a
slightly different tack, in which I discuss the matter in terms
of personal accountability and the differences in attitude between
a captive employee and a Contract Professional.
Agency temps have virtually the same rights as regular, salaried
employees, but the right to continuous, long term employment and
the right to a "price-controlled" gross wage are not among
them. Oops! Come to think of it, even captive employees don't have
those rights unless those rights are specifically provided for in
the workers' employment agreement or in a third-party union contract
that specifically provides for those rights.
Agency temps work at-will, as do virtually all employees
that are not specifically excluded from at-will employment either
by statute or by contract. Below is the entry for at-will employment
in Appendix
B: Glossary of Terms for Contract Professionals from The
Contract Employee's Handbook.
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. The statutory
definition and enforcement of at-will employment varies from state
to state. In practice, virtually every aspect of employment (not
just termination) is “at-will.”
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.
You ask "Should they have come to us with options?"
Well, you do have options. (1) You have the right to quit at-will.
(2) You have the right to negotiate a higher rate. And (3) if your
agency rejects your demand for a higher salary and fires you then
you have the right to work for the client either directly or through
a different agency that takes less off the top. In this regard,
I would suggest that you investigate the employer of record service
offered by P.A.C.E.
Option 3 won't work if you voluntarily quit, because the agency's
non-compete clause will continue to apply. But if the agency fires
you they can hardly prevent you from going to work for a different
agency that pays you more and gives you better benefits, even if
that agency places you at the same client. My advice: Get it
in writing if the agency fires you, and file for unemployment insurance
to document the fact that you were terminated for "lack of
work" or for some other non-voluntary reason.
Companies frequently outsource their contingent labor management
to a gatekeeper or to one or more approved primary vendors. If that
is the case, your selected employer of record may have to subcontract
through another agency. Gatekeepers either add a premium to the
subcontractor's billing rate when they invoice the client (better),
or they take a piece out of the subcontractor's billing rate (worse).
If there are several approved primary vendors you should be able
to shop the agencies and select the one that gives you the best
deal.
Many companies that already have gatekeepers and approved primary
vendors readily will sign directly with P.A.C.E. because they appreciate
P.A.C.E.'s low margins and superb benefits. Contrary to popular
belief, client companies really do want the best for their contingent
workers.
You state "I have worked hard to earn the increases I have
received over the past four years only to have them "stolen"
from me." In this regard, you clearly qualify as a permatemp.
That is, a labor law attorney would have little difficulty getting
you reclassified as a common law employee of the client.
On the one hand, you are lucky that you have been allowed to work
as an agency temp for the client as long as you have. On the other
hand, at some point the client should have hired you as a regular,
full-time, fully-benefited employee. The fact that the client has
not hired you full-time places the client at great financial risk,
especially if a class action lawyer attempts to reclassify you as
a common law employee of the client, and then go after the client
for retroactive benefits.
I discussed this issue at length in a recent issue of The Contract
Employee's Newsletter. See the articles in the January
01, 2002 issue titled "Agencies With Mediocre Benefits
Expose Clients To Great Risk" and "Does My Client
Of 20+ Years Owe Me Retirement Pay?"
The September
15, 2001 issue has a related article on agency jumping titled
"Tempnapping And Agency Jumping Are Now Legal In New Hampshire."
And the December
01, 2001 issue has a highly relevant article titled "Client
Wants To Switch Work Schedules. Is This Legal?"
There is a world of difference between a Contract Professional
who relates to the client as an outside vendor of consulting services
and a captive employee who relates to their employer as, well, a
captive employee. I believe your frustration derives from confusing
your role as a Contract Professional with your wanting to relate
to the client as the client's captive employee. You can be either
one or the other, but you can not be both.
Daniel Pink has produced an enlightening book on the free agent
lifestyle titled Free Agent Nation. On page 74 Pink quotes
me on the subject of accountability as it relates to the differences
between employees and free agents.
"Free agents are accountable. Period. Employees are responsible
but seldom held accountable for anything. Free agents and other
independent professionals are accountable for the success of their
own careers. They are accountable for acquiring the specific marketable
skills and experience that bring value to their clients. They
are accountable for the quality of their work. They are accountable
for identifying business opportunities and for marketing their
services. They are accountable for developing and maintaining
satisfying and productive relationships with their clients."
The Am
I A Match? section of the P.A.C.E. web site further discusses
the attitudinal differences between captive employees and Contract
Professionals.
If, in your heart of hearts, you truly identify as a captive employee,
then you should be working as a captive employee directly for an
employer. If, on the other hand, you identify as a Contract Professional,
then you must adopt the values of a Contract Professional and seek
to work as independently as possible, accepting full accountability
for your own success, on your own terms, not those of the
client or a temp agency.
I hope this discussion gives you useful insight into the differences
between a captive employee and a Contract Professional, and helps
you decide on what side of the fence you want to work. Right now
it looks as if you are straddling the fence, and the pickets are
bruising your sensibilities. -- 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.
Contract
A contract is an agreement between persons or businesses, which
obliges each party to do, or not do, a certain thing. Technically,
a valid contract requires 1) an offer (terms of the agreement),
and 2) an acceptance of that offer (signatures of the parties),
and, 3) in common law countries, consideration (payment). Examples
are client-vendor contracts, and employer-employee contracts. Every
contract is negotiable. You should never sign a contract that you
have not read or that contains language that you do not understand
or do not want to accept.
Contract assignment
A contract assignment is an assignment to do a specified amount
of work determined by a contract between a vendor (independent contractor,
agency, or consulting firm) and a client. Synonymous with project.
Usage: The contract assignment lasted six months. I located a contract
assignment on my own without using an expensive recruiting firm.
See assignment, gig, project.
Contract clause
Contracts are generally organized into sections or clauses, each
clause addressing a separate issue. You should always read contracts
carefully, and strike or modify abusive and unfair language in contract
clauses, or add new clauses that address important issues.
Contract duration
Independent contractor agreements generally have a start date and
an ending, or termination, date. These dates define the contract
duration. For the most part, independent contractor agreements have
a fixed duration, and employment agreements are open ended. The
IRS and other government agencies look for the presence or absence
of a fixed duration contract when making a decision on worker status.
Contract employee
A contract employee is a skilled temporary employee who is employed
by a contract employment agency and assigned to a client company
under terms specified by a contract between the agency and the client
company.
Contract employment agency
A contract employment agency is a third-party employer of record
that employs workers who are assigned to a client company under
terms specified by a contract between the agency and the client
company. Synonyms include broker, contractor recruiting firm, employment
agency, recruiting firm, temp agency, temporary employment agency,
placement agency, and consulting firm.
Contract extension
A contract extension extends the duration of an existing contract,
usually without modifying the original terms. A typical contract
extension clause might read: “Notwithstanding anything to the
contrary herein, and by mutual agreement of the parties, this Agreement
and all the terms and conditions hereof shall be renewed automatically
from month to month unless either party notifies the other, in writing,
at least thirty (30) days prior to its expiration date of a desire
to modify or terminate it, in which event negotiations will be undertaken
without undue delay.“
Contracting
Working as a contractor.
Contractor
I reserve the name “contractor” for contract employees
and independent contractors who are paid by the hour, and who perform
routine, generic tasks that are typically performed by regular employees.
A contract professional who bills by the project is more appropriately
referred to as a “consultant”, although the terms are
often used interchangeably. See consultant, contract employee, Contract
Professional.
Contract Professional
A Contract Professional is an individual who works as a technical
or professional contractor. I choose to capitalize the term Contract
Professional because it designates a major career category, and
is independent of the worker’s tax status.
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:
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.
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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, co-workers, 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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