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Contract Employee's Newsletter
Helping Contract Professionals
Manage Their Careers
August 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.
Featured Topic
Why Contingent Worker Recruiting Firms Are Obsolete
and Unnecessary, If Not Completely Irrelevant
In the first installment of this five part series I contrasted
high-end Hyperskilled Contract Professionals and low-end Deskilled
Temporary Employees. In the second installment I discussed the recent
rise of contingent work in America and the factors that have contributed
to the phenomenally rapid, pervasive, and insidious growth of staffing
agencies in the corporate arena, especially with respect to highly
skilled and highly compensated Contract Professionals.
In this third installment I discuss the many reasons why Contract
Professionals and companies use staffing vendors. I then describe
how all of the services provided by staffing vendors are being replaced
by more efficient, more effective, and less expensive services that
will soon render ordinary staffing vendors obsolete and unnecessary,
if not completely irrelevant.
The Staffing Industry's Code Of Silence Violates Federal Law
Staffing agencies that recruit contingent workers routinely admonish
their contract employees and their client companies from discussing
billing rates and pay rates. They argue that such information is
proprietary and confidential.
The courts, however, have a decidedly different view on the subject
of pay rates, ruling instead that employees have a fundamental right
to discuss pay with coworkers, and may sue for tort damages if terminated
for having such conversations.
Case in point: In Grant-Burton v. Covenant Care, Inc., a California
Court of Appeal concluded recently that California Labor Code section
232 and the federal National Labor Relations Act establish fundamental
public policies protecting employees from being terminated for discussing
their wages. In this regard, staffing agencies should be mindful
that temporary employees are permitted to discuss their wages, and
that policies prohibiting such conversations are unlawful.
In other words, when a recruiter tells you that you may not discuss
your pay rate with the client or with coworkers that recruiter is
violating federal (and probably also state) law.
A hallmark characteristic of professional service providers is
full disclosure of services and fees. When professional service
providers withhold information about services and fees they stifle
the very competition that keeps quality high and costs low.
This is the real reason why recruiting firms maintain an illegal
"code of silence" about agency rates and fees. Agencies
don't want client companies to know about the obscenely high margins
they earn and the ridiculously low wages they pay to contract employees.
And agencies especially don't want client companies to know that
the companies are paying far too much to the agencies for their
contract workers.
When companies and contractors both know the agency margin they
can both shop for the best possible deal. Competition will increase
contractor's pay rates while simultaneously lowering what companies
must pay for those contractors. Ironically, many client companies
help agencies hide the billing rate from contract employees, and
in doing so they unwittingly contribute to unnecessarily high contract
labor costs.
Ordinary temp agencies can be excused for charging 35% to 50% of
the billing rate for placing a low-paid temporary worker. After
all, ordinary temps generally work on short assignments where the
billing rate to the client can be as low as $15 to $20 per hour.
Ordinary temp agencies have to take 35% to 50% just to stay afloat.
To put matters into perspective, let’s compare a typical temp
agency placement commission with the tremendous windfall that recruiting
firms make at the expense of highly skilled and highly compensated
knowledge workers. Here are a couple typical scenarios:
Scenario #1: Temporary Help Agency
Contract Terms: Two week temp assignment at $25/hour
Gross Earnings After Payroll Overhead: 35% margin less 15% = 20%
Agency Profit: 20% gross earnings X $25/hour X 80 hours = $400
per placement
Scenario #2a: Recruiting Firm - 35% margin
Contract Terms: Six-month gig at $100/hour
Gross Earnings After Payroll Overhead: 35% margin less 15% = 20%
Recruiting Firm Profit: 20% gross earnings X $100/hour X 1000
hours = $20,000 per placement
Scenario #2b: Recruiting Firm - 50% margin
Contract Terms: Six-month gig at $100/hour
Gross Earnings After Payroll Overhead: 50% margin less 15% = 35%
Recruiting Firm Profit: 35% gross earnings X $100/hour X 1000
hours = $35,000 per placement
Imagine the recruiting firm profit on a one-year contract!
It does not cost appreciably more to place a contractor than it
does to place a temp. So why do recruiting firms charge so much?
The answer is, recruiting firms charge so much because HR departments
and procurement departments and contractors themselves let them
get away with it.
Contractors can put pressure on recruiting firms to lower their
rates by refusing to use them. It is my opinion that a contractor
with minimal sales skills and a targeted approach will outperform
a recruiting firm any day, and in the process will save tens of
thousands of dollars a year in recruiter's fees.
Companies can put pressure on recruiting firms to lower their rates
by direct sourcing their contractors over the Internet rather than
procuring them through agencies. Then, instead of referring noncompliant
contractors to an ordinary staffing agency or preferred vendor,
companies can save further by referring their contractors to a progressive
employer of record service like P.A.C.E. ProTrac.
And companies can further put downward pressure on recruiting firm
rates by replacing their preferred vendors and onsite gatekeepers
with a vendor neutral workforce management and co-employment compliance
system like P.A.C.E. ProTect with ComplianceSecurity. A company
with a contingent workforce of just 30 contractors can save at least
$500,000 per year in agency overhead charges by installing P.A.C.E.
ProTect with ComplianceSecurity.
If staffing vendors (a.k.a., recruiting firms, placements firms,
temp agencies) are so costly, why do Contract Professionals and
Companies use them?
Why Contractors Use Staffing Vendors
Contractors use staffing vendors primarily for two reasons:
- Staffing vendors advertise that they have the jobs.
- Companies make noncompliant independent contractors process
payroll through a staffing vendor as a condition of working at
the company.
Staffing Vendors Advertise That They Have The Jobs
It's such a simple concept. Just send your resume to a recruiting
firm, and for a mere $40,000 to $70,000 per year (see analysis above)
the recruiting firm will keep you employed.
Fortunately, alternatives to recruiting firms exist. Increasingly,
companies are posting their jobs directly on the Internet, and national
sites that emphasize direct sourcing like FlipDog.com and DirectEmployers.com,
and regional sites like CraigsList.com and CareerBuilder.com are
also posting direct jobs. A contractor who uses the full capability
of the Internet to search for direct jobs will generally do better
than most recruiters, and save a bundle in the process.
For those who prefer to let someone else do their marketing there
is an emerging alternative to recruiting firms - talent agents for
knowledge workers. Writers, entertainers, and professional athletes
use talent agents. They go by the names of literary agent, actors
agent, and sports agent. They work for the talented individual,
and they let the individual sign directly with the publishing company,
production company, or sports team.
As a rule, talent agents take 10% of collected revenues. Literary
agents take 10% to 15%, while NFL contract advisors (sports agents)
are restricted by the NFL Players Association from taking more than
3% of the players salary.
The Professional Association for Contract Employment is promoting
the concept of a P.A.C.E. Certified Marketing Agent or PCMA. You
can read about the PCMA program on the P.A.C.E. page called P.A.C.E.
Sets The Standard.
The motto for the PCMA program is "Free Agents Helping
Free Agents Find Work." Now that the economy is headed
for its inevitable upturn, P.A.C.E. is looking for free agents who
would like to make a part-time or full-time living as a P.A.C.E.
Certified Marketing Agent. PCMAs charge no more than 10% of the
billing rate for setting up interviews and helping the contractor
negotiate a favorable contract. Do you think you could keep ten
to twenty contractors gainfully working at any one time in return
for 100% to 200% of the average contractor's billings?
There is absolutely no administrative overhead or insurance required,
and because you don't own the contract there is no liability. Moreover,
if the contractor you place is a P.A.C.E. contractor then P.A.C.E.
will guarantee that you get paid your placement fee whenever P.A.C.E.
pays the contractor. All you need is a telephone and a rolodex.
What could be simpler?
Companies Make Contractors Process Payroll Through A Third-party
Staffing Vendor
Even when you locate a contract assignment on your own your client
may still require that you contract through a third-party staffing
vendor. This is because the staffing industry has sold corporate
America a faulty (dare I say, fraudulent) bill of goods, and corporate
America has bought it hook, line, and sinker. What the staffing
industry has sold is the idea that it can effectively mitigate the
risks associated with a company hiring temporary workers by serving
as an employer of record for the workers and leasing them to the
company. Here is what the California Chamber of Commerce has this
to say about the efficacy of this ploy:
"While temporary agencies claim they are the employer
of record and will assume all liability, this simply is not true."
[Hiring Temporary Staff May Carry Risks for Employers, August
2002.
Yet, until there is a sea change of opinion about the ability of
ordinary staffing vendors to mitigate co-employment risks companies
will continue to direct their noncompliant contractors to ordinary,
third-party staffing vendors.
Contractors who locate contract assignments on their own have two
options to avoid being shunted by their client to an ordinary staffing
vendor. They can either qualify as an IRS compliant independent
contractor, or they can select a progressive employer of record
service like P.A.C.E. to serve as their virtual, corporate back
office while giving the contractor all the financial advantages
of self-employment.
There are systems in place already that help contractors find work
directly without resorting to ordinary staffing vendors. And there
are mechanisms in place by which contractors can readily qualify
as IRS compliant vendors without relying on ordinary third-party
staffing vendors to mitigate a company's co-employment risks. Obviously:
From the contractor's point of view, ordinary staffing
vendors are obsolete and unnecessary, if not completely irrelevant.
Why Companies Use Staffing Vendors
Companies use staffing vendors for several reasons:
- Staffing vendors advertise that they have the workers.
- Staffing vendors advertise that they mitigate co-employment
risks.
- Staffing vendors offer to manage a company's contingent workforce.
Staffing Vendors Advertise That They Have The Workers
Companies use recruiting firms for the same reason that contractors
use them, because recruiting firms advertise that they can supply
job candidates. Lately, however, companies are becoming less dependent
on recruiting firms as a source of talent for the same reason that
contractors are becoming less dependent on recruiting firms as a
source of jobs. The Internet is facilitating the direct sourcing
of contractors and jobs.
Better organized HR departments report that they are able to direct
source up to 70% of their contingent workers. As companies learn
to mine the Internet for local talent they will disintermediate
the staffing industry in much the same way that the Internet has
all but eliminated travel agencies. Companies that direct source
their knowledge workers can afford to hire candidates with better
skill sets, yet pay no more than they had previously paid to third-party
intermediaries.
Yet, companies continue to refer even direct-sourced contractors
to staffing agencies. Why?
Staffing Vendors Advertise That They Mitigate Co-employment
Risks
Staffing agencies advertise that they mitigate the risks associated
with hiring contingent workers. And, until very recently, staffing
agencies offered the only available solution, although any employment
law attorney will tell you that ordinary staffing agencies offer
only the slightest protection against co-employment risk.
In reality, the risk mitigation provided by ordinary staffing agencies
is little more than a sham designed by the staffing industry to
extort hundreds of millions of dollars from the companies they purportedly
serve and protect. It's a shell game, just smoke and mirrors. In
short, staffing agencies don’t work! They exist for one purpose
only, and that purpose is to profit off the labor of free agents
and independent workers.
Without an aggressive risk management system in place, one that
is overseen by the company's own legal counsel, there can be no
effective mitigation of co-employment risks. Simply put, if a company
has an aggressive risk management system in place the company can
pay temps directly on the company's own employer ID with far less
co-employment risk than if the worker is payrolled through a third
party staffing vendor.
Any one-legged lawyer or government bureaucrat with a straw hat
and cane can reclassify a company's on-site contingent workers as
employees of that company, exposing the company to thousands of
dollars in back taxes, penalties and interest, not to mention court
costs, attorneys fees, and civil liabilities arising from class
action lawsuits. Triggers for reclassification and class action
lawsuits include:
- Unemployment claims.
- IRS audits.
- Inadequate employee benefits.
- Violation of OSHA, EEOC, ADA, Wage & Labor, Title VII, and
similar regulations.
- Violation of ERISA and non-ERISA regulations relating to retroactive
employee benefits.
- And any number of additional local, state, and federal regulations
that seek to protect employees.
Ordinary staffing agencies offer no protection at all if the IRS,
State Employment Departments, the Courts, Class Action Attorneys,
or contractors themselves decide to press the limits of co-employment.
The only effective defense is a strong "affirmative defense",
and ordinary staffing agencies with their low pay and mediocre benefits
offer but the weakest of affirmative defenses.
Indeed, the very fact that a company may direct-source a job applicant,
and then, after the fact, turn that worker over to a third-party
staffing agency for W-2 employment, creates an ipso facto
co-employment relationship. This was one of the primary factors
that the court cited in finding The Metropolitan Water District
of Southern California liable for providing compensation for back
retirement benefits to 2000 agency temps. See the article titled
Are
Your Approved Staffing Agencies Setting You Up For A Costly Class
Action Lawsuit?
Nevertheless, despite the fact that staffing vendors are expensive
and woefully ineffective at managing co-employment risks, companies
still feel compelled to use them. After all, they must reason, "It's
better than doing nothing at all."
Staffing Vendors Offer To Manage A Company's Contingent
Workforce
A third reason companies use staffing vendors is to manage the
contingent workforce, both agencies and contractors. Apparently,
the reasoning goes, a dedicated staffing vendor would be able to
function more efficiently as a gatekeeper than the company's own
HR staff and, if necessary, would be available to function as an
employer of record to mitigate the risks of co-employment.
Functions of a gatekeeper generally include:
- Serving as a shock absorber against fluctuations in the demand
for contingent workers.
- Serving as a single point of contact for outside agencies.
- Serving as a primary vendor through which other agencies must
subcontract.
- Screening and qualifying staffing agencies.
- Controlling the quality and quantity of staffing agencies.
- Providing consolidated billing for subcontracted agencies.
- Distributing job requisitions to approved agencies.
- Screening applicants submitted by approved agencies.
- Serving as employer of record for noncompliant independent contractors.
- Serving as employer of record for full-time employment applicants
converted to contract status.
This relationship as gatekeeper places one, or a few, select staffing
vendors in the enviable position of literally controlling the flow
of contract talent to the client company.
I say "enviable position" because vendors on premise,
preferred vendors, and approved vendors are poised to leverage their
privileged position as a trusted intermediary to extract unreasonable
fees from both the client company and the Contract Professionals
who must pass through these gatekeepers to work at the client.
The ability to exploit the company is less the closer the staffing
vendor is to the client. In some cases there is little room at all
to exploit the client, so the abuse is directed almost exclusively
toward the contractor. For example, vendors on premise (onsite contingent
workforce management companies) have the greatest opportunity to
control access of contract talent to the client, but their proximity
to the client limits their ability to get away with high markups.
In what I can only call "turnabout is fair play" vendors
on premise often complain that their clients squeeze them mercilessly
for ever tighter margins.
Preferred vendors (i.e., staffing vendors on a company's short
list) have less centralized control, and greater freedom to manipulate
markups and gouge both the client and their subcontractors.
Approved vendors are simply staffing agencies that have been approved
by the client or by the client's primary staffing vendor. Approved
vendors have the greatest freedom to manipulate markups and gouge
their contract employees and subcontractors.
Gatekeepers Are Rapidly Becoming Irrelevant
Recently, companies are replacing expensive staffing vendors with
inexpensive software applications and online services that do everything
a gatekeeper does, often using the same systems in-house that third-party
recruiting firms use in their own businesses. These systems:
- Absorb the demand for a fluctuating HR labor force by automating
and greatly simplifying processes usually carried out by staffing
vendors.
- Serve as an online single point of contact and primary portal
through which other agencies must subcontract.
- Provide vendor neutral online screening of third-party
staffing vendors.
- Enforce standard criteria for qualifying staffing agencies,
eliminating the need to limit the vendor pool to a few, manageable,
approved vendors.
- Through the use of integrated, online timecards provide consolidated
billing for all workers represented by all staffing vendors.
- Post job orders to online job boards, and mine the Internet
for passive and active job candidates.
- Receive, sort, and file digital resumes in sophisticated, searchable
databases using highly efficient applicant tracking systems.
- Provide automated access to inexpensive background checking
and screening services.
And while one of the key selling points of ordinary staffing vendors
is the mitigation of co-employment risks, the P.A.C.E. ProTect with ComplianceSecurity®
online risk management service provides far better co-employment
compliance and risk management than ordinary staffing vendors could
ever provide.
And progressive employer of record services like P.A.C.E.
ProTrac allow for the conversion of noncompliant independent
contractors and full-time employment applicants to W-2 status at
much lower margins and with better benefits than costly ordinary
staffing vendors.
In short, companies can completely eliminate ordinary third-party
staffing vendors as gatekeepers and preferred vendors. The savings
to a company from eliminating vendors on premise and preferred vendors
can be enormous, amounting to as much as $500,000 a year on as few
as 30 full-time contractors billing just $75 per hour.
Perhaps the most telling sign that staffing vendors are on the
way out is the fact that consulting firms that once taught third-party
recruiters how to find candidates are now aggressively targeting
corporate HR departments. They are teaching HR professionals how
to recruit their own talent, and in the process completely bypass
expensive third-party recruiters.
We have seen how from the contractor's point of view, ordinary
staffing vendors are obsolete and unnecessary, if not completely
irrelevant. It should be very clear from this discussion that:
From the company's point of view also, ordinary staffing
vendors are obsolete and unnecessary, if not completely irrelevant.
Fortunately, there is an alternative to ordinary staffing vendors.
As an advocate for Contract Professionals, P.A.C.E. is the only
organization in the United States that delivers to both Contract
Professionals and the companies that use their consulting services
effective tools that help both sides of the fence completely eliminate
expensive and ineffective, ordinary staffing vendors.
In the next issue of the CENewsletter I will discuss specifically
how ordinary staffing vendors incorporate illegal restraint of trade,
fraud, and extortion in their standard business model in order to
reap obscene profits from both Contract Professionals and the companies
that use their consulting services.
Return to Table of Contents.
From The Trenches
Why Do Independent Contractors Need Business Insurance?
Eds. Note: The following is a response to a query posted
to an e-mail discussion group I frequent. The original post asked:
"I've been a freelance technical writer and journalist for
14 years. I've never been asked by a client to carry worker's comp
or any other kind of insurance, nor can I figure out why a freelancer
would be asked to, let alone agree to it. Can someone explain?"
I thought the following response by Bruce Hartford was particularly
succinct and clear, so I requested permission to share it with all
8000 subscribers to the CENewsletter.
* ~ * ~ *
Well, to oversimplify:
- The IRS and California EDD [Employment Development Department]
distrust independent contractors. They want to get their taxes
automatically deducted from our paychecks and they also believe
that we exaggerate our business expenses in order to avoid paying
our fair share of taxes.
- The IRS and EDD hit a number of high-tech and other employers
with big fines for hiring freelance programmers/engineers and
others as contractors when, in their opinion, those people were
really "defacto" employees according to the arcane criteria
they use, but cannot clearly explain.
- Employers got upset and decided to hire their freelancers through
temp-agencies who paid the freelancer on a W-2 basis, or took
the risk of IRS/EDD displeasure on their own shoulders by paying
them as 1099 contractors. But in either case, the real employer
was shielded from responsibility.
- For their fee, the agencies began to deduct 30-50% of what
the client paid for the freelancer's labor and talent, and then
passed the remainder on to the freelancer.
- Many freelancers (such as myself) failed to develop proper
enthusiasm for this system, particularly the 30-50% part. We also
didn't like being forced to work as a W-2 temp for tax purposes
but as a freelance contractor for the actual work. Which meant
that our clients expected us to act as contractors, but we could
not deduct all of the business expenses we incurred.
- Disgruntlement ensued.
- Some companies agreed, for some freelancers, to let them work
as "vendors" (AKA "corp-to-corp") but only
if the freelancer met all the requirements that the company normally
had for establishing a business relationship with a vendor, plus
whatever arcana the IRS and EDD insist on.
In my experience, this usually boiled down to:
- Incorporation. The client contracts with my corporation
for my services but not with me personally. No 1099 or W2
is filed by the client at all. That saves them paperwork and
responsibility.
- Paying myself as a W2 employee of my own corporation. I
file a W2 on myself at the end of the year.
- Paying all the associated payroll, unemployment, disability,
social-security, et al taxes through payroll deduction. Clients
insist on that to make sure they run no risk of some government
agency showing up at their door with a payment demand. A side
aspect of this is that I lay myself off whenever a contract
ends so that I can collect unemployment because the capitalist-pig
who owns my corporation (me) is a ruthless, cold-hearted dog
with no consideration for his employees. (That thumping sound
you hear is Karl Marx rolling over in his grave.)
- Carrying various sorts of business insurance including
Workers Comp.
As it turns out, I believe that I make more money as a "vendor"
than I would as a 1099-contractor, and way more money than as a
temp in thrall to an agency.
This is true even though working this way incurs some significant
additional expenses.
I believe I make more money because clients are more likely to
hire me, and they are definitely more likely to extend my contracts
for over a year because they don't fear the IRS/EDD declaring me
a "defacto" employee of theirs (since I'm already an employee
of my corporation.) There are also some technical tax benefits to
working as a vendor.
Bruce Hartford
Maven
Westwind Writers Inc.
URL: http://www.wwwriters.com/
E-mail: bruceh@wwwriters.com
Bruce is a freelance technical writer with 20 years experience
writing system administrator, user, installation, and technical
manuals for both software and hardware for major Silicon Valley
computer firms. Bruce works on a 1099, vendor, or corp-to-corp basis
to build communication bridges between technology creators and technology
users. Bruce dislikes recruiting firms, and never uses them, a position
that I wholeheartedly support.
Return to Table of Contents.
Ask Dungaree Dan
High Priced Resume Spammers
Q: Dear Dan -- What do you know about the search firm [Gives
name and URL]. Their services include executive resume writing along
with targeted cover letters to thousands of companies. They charge
thousands of dollars for these services. Have you had any experience
with them (or another) search firm that provides a similar service?
I looked at the online service of one of these outfits, but I discovered
via USENET that they have been the subject of spam complaints. --
Signed: Sending Particularly Annoying Mail
A: Dear S.P.A.M. -- Sending "targeted" cover letters
to thousands of companies is an oxymoron.
And the spam complaint is 100% legitimate. I completely support
any measures to reduce the number of spammed resumes. I routinely
receive as many as seven copies of the same resume from these resume
spammers, all mailed to different e-mail addresses at my business's
domain.
Think about it. What kind of a message do spammed resumes and spammed
cover
letters give about the sender. Basically, spammed resumes say that
the sender is unimaginative, lazy, lacking in initiative, and any
number of other reasons NOT to hire the sender.
Besides that, resume spamming breeds more spam when the resume
spamming service sells your e-mail address to other spam sites.
Do you really expect a spamming service to respect your
privacy?
Resume broadcasting is absolutely the lamest excuse for self-marketing
that I can imagine.
For a more productive and professional approach, check out the
little book "Don't Send A Resume" by Jeffrey J.
Fox. This book is a must read before you send out any more
resumes or cover letters. -- Signed: Dungaree Dan
Oh My Gosh. I Have Gaps In My Resume!
Q: Dear Dan -- I am having a problem with my resume. I have
only worked a few weeks since January of this year. Jobs have been
hard to find, as you know. How or what should I put on my resume
for January until now? Any suggestions would help. Signed: Gaps
In My Resume
A: Dear Gaps -- You are suffering from a very common ailment.
It is called out-of-work-employee-itis. Are you an out-of-work employee,
or are you a Contract Professional? The sure cure for out-of-work-employee-itis
is to start thinking like a vendor. Contract Professionals are vendors,
not out-of-work employees.
Vendors of professional services don't use resumes. They use skills
profiles. A vendor of consulting services may call their skills
profile a "resume" to satisfy HR clerks who don't know
any better, but a skills profile is NOT a RESUME. It is marketing
collateral.
Think about it. Did you ask your tax accountant for a resume before
you agreed to use her services to prepare your tax return? Did you
ask your lawyer for a resume the last time you required legal services?
Of course you didn't. You asked for evidence of their capabilities,
and you asked for a schedule of their services and rates.
Marketing materials sell the capabilities of the vendor, not the
specifics of when and where they worked. Open the yellow pages of
your local phone book and flip to “Attorneys”. Notice
the abundance of full-page ads. I’ll wager you see bold headers,
lots of bulleted keywords, very little descriptive text, and no
dates. Contact information is posted prominently, and for good reason.
These ads are designed to grab your attention and make
you call that phone number.
Now turn to the section on “Plumbing”: Same thing. Turn
to “Electricians”: Same thing. “Physicians”:
Ditto. Turn to “Employment Agencies”. There also, you
will see bold headers, bulleted keywords, little descriptive text,
and no dates. The same theme is repeated over and over throughout
the yellow pages in every full-page, display ad.
I suggest that you consult Resumes
For Contract Professionals at The
Contract Employee's Handbook. Here you will learn how to write
a skills profile (P.A.C.E. Functional Resume) that focuses on the
projects you have completed. Project managers want to know
two things about a vendor of consulting services: "What do
you do?" and "How well do you do it?"
Now, create a bulleted summary of your best projects, emphasizing
specifically how the client benefited from your contributions. Use
numbers, dollar savings, percentages, etc. to quantify your contribution.
Don't just list the skills you used. Demonstrate specifically
how your contributions contributed to faster production, lower costs,
higher revenues, better customer satisfaction, or whatever you did
specifically that pleased the client. In other words: How
did you justify your rate during that project?
You see, vendors don't worry about gaps in their resume because
vendors don't use resumes to market their their services to clients,
and because when and where they worked is irrelevant to the fundamental
questions that a project manager wants to know about a vendor of
consulting services: "What do you do?" and "How
well do you do it?"-- 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.
Health benefits
Insurance benefits paid under a health insurance plan to cover the
costs of health care. The term is often used as a catchall for medical
insurance, dental insurance, vision insurance, and long-term care
insurance.
Home office
As the name implies, a home office is an area of the home dedicated
to conducting business. A home office may be your dining room table,
a nook in the kitchen, a desk in your bedroom, or a spare room equipped
with a dedicated phone line, high-speed Internet connection, computer,
printer, fax, desk, ergonomic chair and keyboard, and all the other
accouterments of a fully equipped office.
Hourly billing
Charging the client for each hour of work.
Hourly billing rate
The amount of money a professional charges the client for each hour
of work.
Hourly contractor
A Contract Professional who charges the client for each hour of
work.
Hourly employee
A regular employee who is paid an hourly wage by the employer for
each hour of work.
Hourly pay rate
Equivalent to an hourly wage. Temp agencies and recruiting firms
make their profit on the spread between the hourly pay rate and
the hourly billing rate that they can charge the client for your
direct consulting services. By focusing on the hourly pay rate,
and refusing to disclose the hourly billing rate, an agency can
hide the true cost of its job matching and employer of record services.
Hourly wage
Compensation paid by an employer as gross wage to an hourly employee.
Hourly worker
Any worker who is paid for each hour worked.
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.)
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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
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
CENewsletters@pacepros.com
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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.
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Subscribe to The Contract
Employee's Newsletter
The Contract Employee's
Newsletter: Sign Up Now! Useful News & Updates
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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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