It occurred to me pretty early on that it would be useful to others if I should write up my experience of entering the IT contracting market. I hope that this account of my first week as a contractor will be useful to others.
Having been working in Spain for a number of years, I took time off work to try programming some ideas which had been burning slowly in the back of my mind with the intention that if proven workable and not the mad ravings of a loony, it could form the start of my own company. This happened in May 2002, and by December 2002 it was clear that not only were my ideas workable, they were a vast improvement in technology and held within them the next evolution in computer software.
Unfortunately, venture capitalists wouldn’t invest for the three years I needed, business angels decided against a risk with someone they didn’t personally know and partnership with other companies proved impossible. Government grants proved too small, and NESTA, the UK government blue-sky investment fund, unwilling. Ultimately, I needed one or both of two things: (i) 100,000 euros (£64,000) and (ii) business contacts.
It was because of all these things that I thought contracting would be ideal: in between contracts, I could work on my evolutionary software. I would also earn the money I needed in two to three years, and changing jobs every six months introduces you to lots of the right people. It seemed ideal.
Just a quick explanation for those who don’t know (skip it if you want): Contracting is the name given to short-term fixed length periods of work. They tend to be very well defined in terms of responsibilities of each side and because they are defined as temporary work by legislation, much of the overhead of employing someone full time is removed and thus contractors can earn considerably more than permanent employees.
Clients tend to have agencies find the contractors for them . They specify what they want, the agency forwards a list of suitable candidates and they choose which to interview. If approved, the agency will sign a pre-discussed contract with the company representing the contractor. Then each party does their work for the agreed time (charged per hour of work), and more often than not all is good.
For many years, there was a tax-avoidance mechanism in private limited companies of paying yourself mostly dividends and this mechanism still remains available. However, for work mostly on-site of the client (plus many other complicated conditions), the recent IR35 legislation applies and thus tax can no longer be avoided. The majority of contractors thus must now pay full tax. 
Hence, since you can only make maybe 10% more as a contractor , there isn’t much point in it any more especially when weighed against the loss of job security, worker rights and things like sick pay. It’s likely to become a job only for the young and those without ties to one place – and most especially those who enjoy the extra freedom it offers over permanent positions (e.g. working when you want, not at some stupid predefined hour the boss has decided).
The job hunting begins
I arrived in the UK (London) after the costly and hard work of moving everything you own between countries at the end of February. I had already done my homework and realised that with IR35, the best approach for a first timer was to join a PAYE-style umbrella group (a company which for tax purposes employs you as a permanent employee – but you do all the job-hunting and work). This offers flexibility and low start-up costs, especially when you have spent all your savings and are sleeping on the sofas of friends and family. Hence I chose one for twenty five quid per month, and after a quick form fill out on their web page, that part was ready.
I then sat down every morning in front of ContractorUK’s contract search page and after creating accounts on the engines with your CV, found it was very easy to apply for jobs – click the apply button, write a cover note, and send. Probably my favourites would be planetrecruit.com and jobserve.com – these allow boolean searches with AND and OR letting you say for example: London AND contract AND (C OR C++ OR Assembler). They also provide a summary of the advert so you don’t need to keep opening each entry – great! – and it’s something other sites could learn from.
Pretty quickly, the phone calls began. Agencies would ring you and give you a five minute interview. The first one was a total surprise, so I did a lousy job of selling myself, but for subsequent ones I was much better. These continued and I also received emails notifying me of interest, but at the time of writing I haven’t been offered a single interview. That got me onto thinking why, and below are my conclusions.
I am lucky in that I am good at what I do. Indeed, I know of only five engineers who can properly trounce me, and I am talking about the cream of the international crop here . I have regular debates with the leaders of software technology basically by emailing them with a knowledgeable discourse on why whatever their pet project is broken, and it usually generates an excellent response that both of us learn from.
I have also worked in a number of countries in a number of (human) languages. I have successfully piloted tens of thousands line projects through some seriously troubled waters and would be best called a consultant in that I can wear a management hat, troubleshooting hat, design hat and coder hat. I have worked on a dozen operating systems (even written my own) and could be considered an expert in half a dozen programming languages (though I can use plenty more). I find embedded systems as easy as desktop or mainframe and I have no difficulty becoming productive in a totally new environment in days. By all measures commonly used, I am a good engineer.
Imagine then my surprise when I find agents won’t forward me as a candidate because I don’t have the relevant experience. I don’t get this – I know the market is depressed right now, but since when has experience ever strongly correlated with ability? Sure, if I were a virgin programmer just out of university, then experience is highly important – however I have seven years of professional experience, and eighteen years of programming experience. What more experience do they want? 
Well, it would seem that they want direct actual commercial experience in the job. For example, if they want a C++ programmer working on financial systems spread across Unix and NT (common in the City), you might have thought I’d be ideal as technology-wise, I’m a perfect fit. But no, there seems to be a fundamental misunderstanding that experience is not transferable – that somehow a financial computer system is fundamentally different to any other. Just because the technology is 100% exactly the same seems to matter not a jot.
What’s even worse is that any experience not practised in a commercial setting is completely discounted. Much of my skill base is self-taught i.e. me playing with stuff in my own free time. Although I and the majority of other engineers would correctly say technology learned for fun is superior to something you had to learn, this simple and intuitive concept is completely lost on them.
Whenever I interview someone for a position, I test their ability usually by asking impossible to answer programming questions. The first words I want to hear are “I don’t know” – if they try to blag it, they’re out the door. The next thing I want to see is how they go about solving the problem – the steps they take. Just that ten minute process tells me vastly more about their worth than any degree, qualification or experience. A quick learning hard worker with the right mental processes is ten times the programmer others can be. If you don’t believe me, go read “The Mythical Man Month” by Frederick P. Brooks (-www.ercb.com).
Yet from my experience in the contracting market, there seems to be an absolute lack of understanding of this. Employers seem to think that the dregs of those with direct experience will somehow always outweigh a better engineer with no experience. The agencies merely are representative of the employers view, not the cause of it.
There seems, in my view, a lack of will to invest in workers in the UK. Businesses seems to think that employees will teach themselves or be taught by the state – or more importantly, they should be taught by anyone other than business itself. Furthermore, they don’t like encouraging employees to self-improve, because then you have to pay them more or they will get a job with the competition.
This reflects a fundamentally broken view of industry. Employers constantly complain about the lack of training of employees and how many of them are incompetent. Never do they realise that their own selfish practices cause the national pool of employees to be sub-standard. Therefore, their own lack of willingness to invest in employees causes deep-seated and institutional difficulties in getting decent workers i.e. the problem is cyclical and self-perpetuating.
I have loads more to say on this, including how I’d radically reform IT company management structures (quite frankly in the UK, IT management really sucks – even the Spanish have better management on average than the British, and the Germans certainly do) but it’s outside the scope of this article. If I ever form my company, I’ll put them into practice there and if successful, expect a ground-breaking book!
I’m still looking for contract work, but quite frankly it’s looking bleak. Once agencies receive your CV for the first time, they show some interest but quickly you become forgotten and just another number. Hence, it’s looking like a permie job, with all the bollocks about being in on time every morning and the usual entrenched mismanagement which sucks out at least 75% of potential worker productivity. If anyone wants an excellent explanation of this, “The Office” a dark comedy by the BBC is all you need to see. I swear, if I have to go on another employee morale boosting day, I’m liable to chuck a monitor at someone!
If you’re looking to become a contractor, my advice to you would be as follows: You need direct experience of the roles (as in, have done precisely the same job before). You will need this direct experience very recently, in fact it’s best if it’s your current job. You will get no opportunity to diversify or learn new skills, and you will be stuck doing the same job forever because without direct recent experience in something else, you won’t even get the interview. You can’t even train yourself in new technologies, because unless they come with an expensive certification (like a MCSE), they’ll be completely ignored.
All in all, very disappointing. If you want to show me how wrong I am, please write to niallworkoffers at nedprod . com – and oh, I’m based in London.
: I discount the many contracts which are not made public ie; very often a client will ring up an old contact and have them do the work. The number of clients who advertise a contract on their own is tiny - almost all outsource it to one or more agencies.
: This is not to say contractors cheat the tax man! Tax avoidance is legal and practiced by most people without realising it whereas tax evasion is not legal. Tax avoidance is optimising how you pay tax in order to pay the least.
: This was calculated by using current average rates (March 2002), a contractor using a PAYE-style umbrella company and that a contractor will be employed for less than fifty weeks each year (ie; the worst possible scenario). Other options such as composite umbrella and private one-man companies may yield significantly higher earnings as taxes can be offset against certain expenses plus IR35 may be avoidable.
: I am not saying I am the sixth best programmer in the world! I am saying I only know of five programmers better than I.
: I use the word "experience" as the dictionary defines it
Look out for a subsequent article to this series which collates advice and feedback received in response to this article. In the meantime, I suggest http://www.pcg.org.uk/capture.php?filename=Guide_To_Freelancing.zip