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Contract Employee's Newsletter
Helping Contract Professionals
Manage Their Careers
March 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, or useful
business tips? Do you have your own newsletter? I'm open to exchanging
articles on subjects relevant to the CENewsletter.
Mail your suggestions to suggestion@pacepros.com.
Return to Table of Contents.
Contract Employee's
Workshop
Here It Comes To Concordia University, Irvine, CA
The next CEWorkshop is scheduled for April 06, 2002 in Irvine,
CA, in the heart of Southern California's "Technology Coast"
and Orange County at beautiful Concordia
University.
The meeting room will accommodate only forty participants, so make
sure that you reserve your place early to guarantee a spot. There
will be a waiting list, and we will notify late registrants in the
event an opening becomes available.
When put into action, the practical information you receive in
the CEWorkshop can be worth tens of thousands of dollars in increased
earnings during the coming year. You cannot afford not to
register for this valuable workshop.
Visit the CEWorkshop
Information Page for registration information and directions.
Visit the CEWorkshop
Agenda to view topics covered during this valuable event.
In the meantime watch this space for details on upcoming CEWorkshops
in a community near you.
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
Featured Topic
Promote Yourself With An E-zine, E-book, or E-mail
Discussion Group
The CENewsletter is an e-zine, and I use it to promote P.A.C.E.
The CEHandbook is an e-book, and I use it also to promote P.A.C.E.
The P.A.C.E. website, itself, contains more useful content about
benefits and services than most employer of record services on the
Web. Acting in concert, the CENewsletter, the CEHandbook, and the
P.A.C.E. website do more on a shoestring budget to promote P.A.C.E.
than most traditional staffing agencies are able to accomplish by
spending tens of thousands of dollars per month on media advertising.
For a small consulting business media advertising is far too expensive
and , quite frankly, it costs way more than it's worth. E-zines,
e-books, and e-mail discussion groups, on the other hand, are virtually
free.
I began writing the CEHandbook long before I had even the slightest
notion about growing a company that offers the finest employer of
record service in the United States. The idea for P.A.C.E. actually
arose as a direct result of the insights I formed while writing
about contracting in the CEHandbook.
I was compelled to write the CEHandbook because as a Contract Professional
I was appalled by the ways that recruiting firms manipulated client
companies and Contract Professionals to the detriment of both. I
wanted to "blow the whistle", as it were, on the customary
practices that I thought were unfair, unethical, and abusive. I
figured that if I wrote about what I had learned I could help pierce
the "code of silence" promulgated by predatory recruiting
firms. I wanted to help Contract Professionals like myself make
a clean break from the evildoers that smiled at our faces and laughed
all the way to the bank.
I didn't know very much about how the contractor recruiting industry
worked when I started. But writing the CEHandbook helped me organize
my thoughts and helped me ask the kinds of provocative questions
that contributed ultimately to the level of understanding I have
today. Essentially, I learned my "craft" by teaching it
to others.
I have never charged for the information in the CEHandbook because
I want to reach as many Contract Professionals as possible. The
CEHandbook is now visited by several hundred first time visitors
every day of the week. I remember four years ago when the web counter
on the CEHandbook recorded fewer than ten unique visitors a day,
and I remember watching the number of unique visitors rise, first
to 100 and then to its present level, as more and more sites began
linking to the CEHandbook and our rankings in the search engines
began to rise accordingly.
The Google Toolbar, downloadable to your browser at www.Google.com,
ranks websites on a scale of one to ten based on their "importance."
The home page of The
Contract Employee's Handbook ranks 7/10. That's right up there
with the home page of Contract
Professional Magazine, (6/10), and the home page of IT
Contractor Magazine, (7/10). Not bad for a low-tech, low-maintenance,
virtually no-cost e-book.
I founded P.A.C.E. because I wanted to offer an ethical alternative
to the status quo. My e-book enhances my credibility and drives
traffic to the P.A.C.E. website. You can buy traffic, but you have
to earn credibility. You can earn credibility one client at a time,
or you can earn it several people at a time through effective networking.
Or you can earn it by the bucketsful by publishing an e-zine, or
an e-book, or by hosting an e-mail discussion group that promotes
your craft. Your increased credibility will drive free traffic to
your professional website where viewers can examine your skills
profile and professional portfolio. Increased traffic will send
more business and higher earnings your way.
Below I introduce you to three "ordinary" consultants
who have each done an exceptional job of promoting themselves online.
I encourage you to visit their professional websites.
Gregory Close -- Bay
Area IT Consultants/Contractors E-mail List and Affinisoft
Corp
Gregory Close hosts the Bay Area IT Consultants E-mail List at
Yahoo Groups. Baitc is a discussion forum for San Francisco Bay
Area IT Contractors. While the focus is on IT contractors in the
SF Bay Area, IT contractors from anywhere are welcome to join in
the discussion. Appropriate topics for discussion include negotiation
strategies, marketing strategies, war stories, contracts, agency
discussion, etc.
Baitc is a "monitored" discussion group, which means
that Gregory screens every message before it is posted to the web.
Monitoring filters out flames, sales pitches, and inappropriate
content.
Gregory is an independent contractor. He calls his business Affinisoft
Corp. - Software Engineering Management for Financial Web Sites.
His professional website, www.Affinisoft.com,
gives his credentials, a brief description of his consulting services,
a Q & A section, and a sample list of clients. Visitors to his
site can also sign up for a free "Traffic Tips" newsletter
on how to optimize their website for search engines.
Baitc is one way that Gregory Close establishes his credibility
and keeps in touch with his professional network, while his newsletter
keeps him in touch with potential clients and drives traffic to
his website.
Anyone can readily emulate Gregory Close. Start with the names
in your contact file, and encourage members of your list to invite
additional members. As you collect business cards from colleagues
and contacts send them an e-mail invitation to join your list, or
ask their permission when you first exchange business cards and
personal e-mail addresses. [What? You say you don't have
a business card? Then create a simple card today in your computer's
word processing software. Print it on cardstock or take the information
to a printer for a more professional look. As a Contract Professional
you must carry business cards at all times. This is *I*M*P*O*R*T*A*N*T*.]
Tara Montgomery -- Laid
Off In Silicon Valley
Silicon Valley was hit harder than anywhere else in the nation
by the dot com meltdown and economic downturn. What do you do if
you find yourself in the tightest job market in the USA? You do
what Tara did. Tara created a website called Laid Off In Silicon
Valley that offers resources and a network to exchange ideas and
moral support to workers who were laid off or secretly wish they
were.
Tara offers a newsletter, articles, discussion boards, networking
aids, and a list of local events for job hunters, all of which greatly
increase Tara's professional profile and credibility.
Alexandria K. Brown: E-zine
Queen and AKB
& Associates
Ali Brown became an independent consultant and writer in September
1998 and formed her marketing communications agency AKB & Associates
in late 1999. As the company's principal copywriter and consultant,
she's developed a specialty in communications that build relationships
and increase sales — particularly print and online newsletters
(or "e-zines"). Hence, her title E-zine Queen.
Ali maintains two websites. One for her marketing communications
agency, AKB & Associates, and another, E-zine Queen, that promotes
the newsletters and e-books that promote her marketing communications
agency. Got it?
Ali has style, grace, a keen wit, and an exquisite eye for detail.
Her e-books, e-zines, and conference call courses show you how to
create your e-zines. Some of the material is free, and the rest
of the material costs less than dinner for two.
How can a company not select AKB & Associates to design
their next marketing communications campaign after sampling the
generous and immensely useful information that Alexandria Brown
virtually gives away?
I think this is the key to why giving away free information is
such a powerful marketing device. E-books, e-zines, discussion groups,
and genuinely useful websites engage the reader and create
demand for your consulting services. They don't just tell
you how good they are. They show how good they are. They
create good will. And, as with credibility, you cannot buy good
will. You have to earn it.
Here is a tip for getting started with your own e-zine. Join a
discussion group or online forum for professionals in your skill
set. Lurk awhile as you begin to get a feel for the members and
their sensibilities. After a while craft answers to a few of the
questions posted to the group. Select questions in your area of
strength, and carefully research your answers. For starters, post
two or three answers a week. Over time your confidence and your
credibility with the members will grow. After a couple of months
pick up the level of your participation.
You will know when it's time for you to strike out on your own.
Send your modest but informative e-zine to the members of your professional
network, and also to prospective clients. Put a sign-up form on
your website, and follow established opt-in etiquette. Diligently
apply yourself and watch your subscription list and your
consulting business grow hand in hand.
Return to Table of Contents.
News and Views
Good News! Employers Rebel Against Rising Job Board
Fees
In an open rebellion against the high cost of posting jobs online,
a group of 327 companies calling themselves the e-Recruiting Association
Inc. have launched their own non-profit, employer-owned search engine,
DirectEmployers.com.
The new site is only a couple weeks old, but it already has over
150,000 job postings.
DirectEmployers.com is good news for online job seekers and Contract
Professionals. Only about 10% of available job openings ever get
posted at all because posting on the commercial job boards is so
expensive. But member companies of the e-Recruiting Association
are able to post all of their jobs for a mere fraction of
the cost of posting on the commercial boards. Job posting fees on
DirectEmployers.com range from $6,000 to $60,000 per year depending
on company size. This represents about 20% of what the companies
would have to pay Monster.com or Hotjobs.com for a comparable number
of listings.
The really good news is that posting job openings on DirectEmployers.com
by member companies effectively shuts the door on recruiting firms.
Member companies save even more by avoiding the finder's fees and
obscenely high margins of permanent placement and contractor placement
recruiting firms.
This new arrangement means that you can search a data base containing
all of the available job openings at member companies, and learn
which companies are hiring in your skill set. Then you can approach
them directly with your value proposition. Companies that advertise
for full-time employees are likely to need Contract Professionals
to round out the team, so you can approach these companies with
full assurance that they need your expertise.
Access to DirectEmployers.com is password protected, but you can
register online for free.
Your account allows you to:
- Create an online resume searchable by member employers.
- Manage your resume, and store it for use when applying to employers.
- Create Scheduled Searches that automatically notify you if a
company has posted a matching job.
- Use an online forum to communicate with fellow job seekers and
share information, advice, and experiences.
Bookmark the site for DirectEmployers.com
and visit it often. DirectEmployers.com has the potential to blow
the commercial job boards and other third-party intermediaries out
of the water, giving employees and contract Professionals direct
access to the companies that need their skills and experience. Companies
are finally beginning to take back control of the recruiting process.
Return to Table of Contents.
Kudos and Testimonials
What People Are Saying About The Contract Employee's
Project
Just a short note of appreciation for your response to "HR
Asks 'What is your expected salary?'"
I've long felt that qualifying a prospective client/employer up-front
is an important step. If they won't/can't pay my rates its a waste
of everybody's time, effort and emotional energy. Too often advisers
recommend holding money issues until after you've gotten the "job."
Wrong!!! The next step of the sales cycle after finding a "suspect"
is turning them into a "prospect" through "qualifying."
If they don't qualify, leave to find somebody who does.
Obviously, I feel validated by your advice and it feels good. --
Signed: KRP
[Ed. Note: Thank you! Contract Professionals simply cannot
afford to waste their time chasing unqualified leads. It is vitally
important that Contract Professionals know their bottom line and
stick to it. This is an issue of both personal and professional
integrity.]
Return to Table of Contents.
From The Trenches
Contractor Stands His Ground To Get What He Is Worth
That resume
search on Google was a great idea... but nothing turned up on
this one. What a great technique, though! And thanks for your tips
on how to bypass the agency on that Dice listing.
Against my better judgement, I contacted the agency that posted
the listing directly. As expected, it was a fiasco. We had a fair
amount of discussion, and the job was a tight fit. Eventually, they
asked about rates... and they made an insulting low-ball offer.
I must say, I wasn't surprised at all. I cordially stuck with a
very reasonable offer of my own, but they said they could not work
with me. For those who keep score... Agency: 1, Client: 0.
[Ed. Note: And Contractor: 2. You earn two points because
1) you didn't cave in to a low-ball rate, and 2) you now have the
opportunity to use the marketing skills you are acquiring to locate
a project on your own where you can bill the going market rate.
Congratulations!]
Contractor Successfully Fights Unreasonable Agency
Noncompete Clauses
I've had huge difficulty avoiding agency non-compete clauses ,
so I've agreed to sign them--on the condition that the NC will be
for a term I consider viable, not the agency. Face it, in our industry,
a year is excessive.
I firmly hold to a 6 month maximum in good times, 3-4 in bad times.
It works, too. One time a second agency found a contract for me
in a large bank--in a WAY different division. The first agency balked
in a rather ugly fashion. Turns out, when the balking agnecy reviewed
my contract, there it was--penciled in: 6 months, and initialed
by me and their AE.
I also insist that there is a very tight constraint on how a 'client'
is defined, and I usually require it be at the department level--it'd
be foolhardy to be locked out of a division or an entire company.
As with all other contract terms, this one's negotiable as well.
[Ed. Note: I snagged this one from Bay
Area IT Consultants E-mail List, hosted by Gregory Close at
Yahoo Groups. Stick to your guns when dealing with recruiting firms.
Most greedy agencies will accept more competition from you in the
future in order to make a buck on you today. Agencies are under
tremendous competitive pressure from other agencies. If they don't
score the deal with you today they run the risk of losing the deal
to a competing agency tomorrow. Contrary to conventional wisdom,
you have *more* leverage with agencies during bad times because
there is so much competition among agencies for the limited number
of contract assignments at client companies. Good times or bad,
in this game, Contract Professionals own the football, and
Contract Professionals make the rules.]
Return to Table of Contents.
Marketing Tips
Establish A Local Presence On Remote Assignments
You live in Cleveland, OH. But the winter snow and summer humidity
are getting you down, and you would like to try out the job market
in Southern California, say Orange County.
Problem: The contact information on your skills profile
shows a Cleveland address and Cleveland area codes for your telephone
and fax numbers. You hardly look like someone who could report to
work on an urgent project in Southern California as early as Monday
morning.
Solution: Obtain a local postal address, local
telephone number, and local fax number in Irvine, CA. Now,
when a prospective client reads your skills profile your contact
information will suggest that you are a local resident of Irvine.
Here's what you do:
- Obtain a local postal address. There are any number
of private mailbox services throughout the United States. One
service is Mail
Boxes Etc. I went to their corporate website and clicked on
<Locations>, which took me to a search window. I entered
"Irvine, CA" and the website returned a map showing
five locations, complete with addresses and phone numbers. I called
the office closest to the center of town and learned that I can
rent a mail box for $20 per month with a three-month minimum.
They will forward my mail if I pay a $25 deposit to cover the
additional postage. However, if I have a FedEx account number
they will simply stuff a FedEx envelope every time I receive mail
and send it off the same day for next day delivery.
- Obtain a local telephone number. Visit any cell phone
company and order a cell phone number with an Irvine, CA area
code. What could be simpler? When a prospective client calls to
set up an interview they will have no idea that you are really
in Cleveland, OH. You can suggest a telephone interview as a first
step. That way you can avoid unnecessary and expensive plane trips.
- Obtain a local fax number. This is another simple process.
J2 Global Communications,
offers web-based fax and voice mail services where you can choose
a local fax number from 220 locations around the world, or a US
toll-free fax number for nationwide coverage. At no additional
charge you can receive voice messages via email, and listen to
them over your computer speakers. Faxes and voice mails arrive
as e-mail attachments. They can be stored, forwarded, and printed
at will just like regular e-mails. P.A.C.E. uses J2, and the service
works great.
If you have a professional website don't forget to update the contact
information there also.
Now that your contact information reflects your presence in Irvine,
CA, you can compete with the local talent on an even playing field.
You'll be working on your tan and surfing the waves in Southern
California before you know it.
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.
D.B.A.
Short for “Doing Business As” a fictitious name. A name
is considered fictitious if it does not contain the business owner’s
surname, or if it contains words other than those in the owner’s
full name. For example, if the owner’s name is Sally Smith,
the names “Acme Java Jockeys,” “Sally Smith Consulting
Services” and “Sally Smith & Company” are D.B.A.s
or fictitious names. A business entity that operates as a D.B.A.
must file a fictitious name statement with the appropriate local
agency for that purpose.
Deadbeat client
A deadbeat is someone who persistently fails to pay personal debts
or expenses, as in “deadbeat dad”. A deadbeat client is
a client that pays slowly or not at all.
Defined benefit plan
A defined benefit plan pays a definite, pre-determined amount of
money when the worker retires or becomes disabled. For example,
a pension that pays a fixed monthly amount of money based on the
number of years of service is a defined benefit plan. Benefits may
also be calculated as a percentage of total salary.
Defined contribution plan
A defined contribution plan, in contrast to a defined benefit plan,
makes no guarantee as to the amount paid out upon retirement. Instead,
the employer contributes a defined amount into the pension fund
at monthly or yearly intervals. The employer’s contribution
may be a fixed percentage of each employee's wages, or a percentage
of the company's profits prorated according to the amount of each
employee's wages. The amount in each employee's pension is determined
by how much was contributed by the employer, plus any gains or losses
resulting from investments of the contributed funds. A 401(k) retirement
savings plan is one example of a defined contribution plan.
Direct contract
A direct contract is a contract between a vendor and the end user,
as opposed to a subcontract, which is a contract between a vendor
and another vendor that is not the end user. A vendor that holds
a direct contract is variously referred to as agency of record,
employer of record, general contractor, original contractor, and
prime contractor.
Direct contractor
A direct contractor is an outside vendor that contracts directly
with a client to provide technical or professional services. Recruiting
firms, staffing firms, contract employment agencies and temp agencies
are examples of direct contractors that provide the services of
individuals who are specifically identified in a contract between
the direct contractor and the client. The individual who actually
performs the work may be:
- The direct contractor himself or herself
- A contract employee of the direct contractor
- A subcontractor
A subcontractor is a vendor that contracts with the direct contractor
to provide technical or professional services. For example, an independent
contractor who contracts through a direct contractor to perform
work for the client is a subcontractor. Subcontractors can themselves
have subcontractors, and so on ad infinitum. Synonyms for direct
contractor are: agency of record, employer of record, general contractor,
original contractor, and prime contractor.
Disability insurance
Also referred to as disability income protection insurance, disability
insurance comes in two varieties, short term and long term.
Short term disability (STD) pays a percentage of your salary if
you become temporarily disabled, meaning that you are not able to
work for a short period of time due to sickness or injury (excluding
on-the-job injuries, which are covered by workers compensation insurance).
A typical STD policy provides you with a weekly portion of your
salary, usually between 1/2 and 2/3 for 13 to 26 weeks. The elimination
period is usually between 0 and 8 days after the onset of disability.
Some states, for example California, include STD premiums as a standard
employee-paid payroll tax.
Long term disability (LTD) pays a percentage of your salary if
you become permanently disabled, meaning that you are not able to
work for an extended period of time ranging from months to years.
A typical LTD policy provides you with a monthly portion of your
salary, usually between 1/2 and 2/3 up to age 65, after which age
the benefit is reduced. The elimination period is usually either
three or six months.
Divide-by-1000 rule of thumb
The divide-by-1000 rule of thumb is a simple algorithm for converting
an annual salary into an equivalent hourly billing rate. An annual
salary represents the minimum equivalent annual earnings after expenses
that a Contract Professional must earn in order to remain on a par
with a salaried employee having equivalent skills and experience.
Thus, you may calculate an equivalent hourly billing rate by taking
a representative annual salary and adding to it the actual costs
of running your business. This represents the total annual compensation
or billing revenues that you must receive in a year. Next, divide
the total annual compensation by the actual number of hours you
expect to bill during the year. This exercise will generally produce
an hourly billing rate that is approximately 1/1000th the annual
salary. This relationship is referred to as the divide-by-1000 rule
of thumb.
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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Employee's Newsletter
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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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