Engineering Contracting - Mechanical Design

[Gad-Westy]

Starting to consider a bit of a change of direction.

I've been in mechanical engineering design and manufacturing environment for last 15 years. In last 6 years or so, it's been mainly Engineering managerial work and I'm getting very bored of it. Mainly because I seem to spend my life dealing with politics or personnel issues. I seem to be drifting and further away from what I actually enjoy which is design and innovation.

So I'm starting to contemplate ditching a salary job and switching to short/medium term design/manufacturing/project management contracts.

Pros and cons as I see it:

Pros:
-Defined tasks rather than drifting around dealing with all sorts
-Variety of work has potential to be good
-Can stop at any time and revert to salary role if something interesting came along.
- Better rate of pay potentially or at least more take home with some.
-Maybe have more control over my own time managment

Cons:
-Security in terms of finding work and the prospect of being dropped at any moment
-Becoming a number to get every last ounce of value out of rather.
-No real potential for progression
- Maybe need to be flexible about basing myself away from home sometimes.

I probably ultimately have loads of questions but I just wonder if anyone has any pearls of wisdom positive or negative for me?

[Elneld]

I was a contractor for nearly 9 years and when it was good, it was great. When it went bad it went bad FAST.
I'm a senior designer in the O&G sector. When I was contracting I knew it wasn't for me long term (i.e until I retire) and always thought that when I decided to stop I'd pick up a staff job fairly easily and with a fair/good wage. How wrong I was.
We all know what happened to the O&G industry, 10's of thousand let go and virtually no help from local or national government to help stem the losses or find alternative employment.
For me personally, I was happy to take ANY staff job locally (there was virtually none) and also tried contracting roles in other industries in any part of the country. Other industries didn't want to know. If you came from O&G tuff luck (and I was told that more than once).

My point is this, how sure are you of your industry, is it niche (O&G isn't but it seemed suddenly become non transferable), could you get a job in any part of the country?

O&G is heavily centred around Aberdeen (where I live) when it went down the drain everyone was chasing a job (senior engineers applying for admin roles).

The other part of it is, how financially secure are you? If the mortgage is almost paid etc then jump in, if not take time to consider it (you are) and if you do save like hell for the rainy day.

Hopefully the above helps, it was a bit of a garbled mind dump though.


Oh, almost forgot, not sure how IR35 has changed over the last 2 years so that might make it far less appealing.

[BIG MOLE]

If you are a competent Mechanical Design Engineer, (note that I said competent, not good) and are prepared to be flexible with regard to location and the type of work that you do, then you will always get work.

I have been contracting now for almost 9 years, starting just before the 2008 crash, and have never been out of work in that time except for 1 month just over a year ago, and that was more to do with me being fussy.

In response to your bullet points…

Pros:
-Defined tasks rather than drifting around dealing with all sorts
-Not always. Although contracts usually start this way, often you can end up doing other stuff.

-Variety of work has potential to be good
-Yes. And even if the work does get boring, you know that this time next year you will probably be doing something else.

-Can stop at any time and revert to salary role if something interesting came along.
-Yes. Perish the thought

- Better rate of pay potentially or at least more take home with some.
-Very much this. It was my main motivation to go contracting.

-Maybe have more control over my own time management.
-Although true to a certain extent you tend to find that the reason a client is looking for a contractor is that they have work that needs doing and doing now. However, if you want to take 6 months of after a contract finishes then no one is going to say that you can’t.

Cons:
-Security in terms of finding work and the prospect of being dropped at any moment
-You do get used to that and it’s pretty easy to sense that work/money is starting to get a bit thin on a job and that it may be time to start looking for something else.

-Becoming a number to get every last ounce of value out of rather.
-Although this can be the case, I have always found that I have been treated well by my clients (better than the staff in some places) and they haven’t taken the piss with workload. In fact, as someone who charges by the hour I have tried to encourage them to take the piss.

-No real potential for progression
-Now, we’ll have no more of that. If you want to be a contractor you should leave that kind of simpering permie talk behind. Somebody did say the same to me once. My reply was along the lines of “I used to live in a 2 bedroom flat, Then a 3 bedroom semi and now I live in a 5 bedroom detached house. If I was staff I would still be in the 3 bedroom semi. That’s real progression.” Contracting is not about having a career. It is about working in a way that suits you better. For me it is about earning more money so that I can but the big house. For others it may be about variety of work or taking more time off.

- Maybe need to be flexible about basing myself away from home sometimes.
-I have to say that this is the only real downside for me. Part of the reason for my never really being out of work is that I am prepared to live away from home. This is exacerbated by the fact that I live in an area that doesn’t have lots of engineering based companies. It has become a bit of a way of life for me and my family but we have made it work.

With regard to the point Elneld made about working across different industries, I have never really had much of a problem with this. This may be due to the fact that I had chopped and changed quite a lot as a permie so I had small amounts of experience of different sectors, materials, CAD systems etc. A little knowledge can take you quite a long way.

In short, I went contracting because I wanted to earn more money. It worked for me.

[Gad-Westy]

Elneld said:

I was a contractor for nearly 9 years and when it was good, it was great. When it went bad it went bad FAST.
I'm a senior designer in the O&G sector. When I was contracting I knew it wasn't for me long term (i.e until I retire) and always thought that when I decided to stop I'd pick up a staff job fairly easily and with a fair/good wage. How wrong I was.
We all know what happened to the O&G industry, 10's of thousand let go and virtually no help from local or national government to help stem the losses or find alternative employment.
For me personally, I was happy to take ANY staff job locally (there was virtually none) and also tried contracting roles in other industries in any part of the country. Other industries didn't want to know. If you came from O&G tuff luck (and I was told that more than once).

My point is this, how sure are you of your industry, is it niche (O&G isn't but it seemed suddenly become non transferable), could you get a job in any part of the country?

O&G is heavily centred around Aberdeen (where I live) when it went down the drain everyone was chasing a job (senior engineers applying for admin roles).

The other part of it is, how financially secure are you? If the mortgage is almost paid etc then jump in, if not take time to consider it (you are) and if you do save like hell for the rainy day.

Hopefully the above helps, it was a bit of a garbled mind dump though.


Oh, almost forgot, not sure how IR35 has changed over the last 2 years so that might make it far less appealing.

Many thanks for this. I know a few people who have worked in or around O&G and know all too well how tough things have been. It's not really my field at all, though I'm aware that there are knock on effects over the whole engineering spectrum depending on how things are doing in the O & G field. So I'll proceed with caution.

Same applies to IR35. I've tried to understand the implications of this and it would seem that generally I would be looking at roles where I would not be IR35 but having read the other thread it seems possible that some HR departments will apply a blanket policy. So I guess I need to tread carefully rather than be totally put off at this stage.

[Gad-Westy]

BIG MOLE said:

If you are a competent Mechanical Design Engineer, (note that I said competent, not good) and are prepared to be flexible with regard to location and the type of work that you do, then you will always get work.

I have been contracting now for almost 9 years, starting just before the 2008 crash, and have never been out of work in that time except for 1 month just over a year ago, and that was more to do with me being fussy.

In response to your bullet points…

Pros:
-Defined tasks rather than drifting around dealing with all sorts
-Not always. Although contracts usually start this way, often you can end up doing other stuff.

-Variety of work has potential to be good
-Yes. And even if the work does get boring, you know that this time next year you will probably be doing something else.

-Can stop at any time and revert to salary role if something interesting came along.
-Yes. Perish the thought

- Better rate of pay potentially or at least more take home with some.
-Very much this. It was my main motivation to go contracting.

-Maybe have more control over my own time management.
-Although true to a certain extent you tend to find that the reason a client is looking for a contractor is that they have work that needs doing and doing now. However, if you want to take 6 months of after a contract finishes then no one is going to say that you can’t.

Cons:
-Security in terms of finding work and the prospect of being dropped at any moment
-You do get used to that and it’s pretty easy to sense that work/money is starting to get a bit thin on a job and that it may be time to start looking for something else.

-Becoming a number to get every last ounce of value out of rather.
-Although this can be the case, I have always found that I have been treated well by my clients (better than the staff in some places) and they haven’t taken the piss with workload. In fact, as someone who charges by the hour I have tried to encourage them to take the piss.

-No real potential for progression
-Now, we’ll have no more of that. If you want to be a contractor you should leave that kind of simpering permie talk behind. Somebody did say the same to me once. My reply was along the lines of “I used to live in a 2 bedroom flat, Then a 3 bedroom semi and now I live in a 5 bedroom detached house. If I was staff I would still be in the 3 bedroom semi. That’s real progression.” Contracting is not about having a career. It is about working in a way that suits you better. For me it is about earning more money so that I can but the big house. For others it may be about variety of work or taking more time off.

- Maybe need to be flexible about basing myself away from home sometimes.
-I have to say that this is the only real downside for me. Part of the reason for my never really being out of work is that I am prepared to live away from home. This is exacerbated by the fact that I live in an area that doesn’t have lots of engineering based companies. It has become a bit of a way of life for me and my family but we have made it work.

With regard to the point Elneld made about working across different industries, I have never really had much of a problem with this. This may be due to the fact that I had chopped and changed quite a lot as a permie so I had small amounts of experience of different sectors, materials, CAD systems etc. A little knowledge can take you quite a long way.

In short, I went contracting because I wanted to earn more money. It worked for me.

Ever so grateful for your time on this. It's sort of confirmed some thoughts for me and it's good to hear a real account. Out of interest, have you been effected/concerned about IR35?

My real driver behind this isn't necessarily to earn more than I do now, it is more to be able to earn a similar amount without having to work in a managerial role. It's one of my huge frustrations with engineering that those who do well as an engineer are rewarded by being elevated into management roles that they may or may not be good at and may or may not enjoy. I would say I'm distinctly average with regard to management but I find it soul destroying. I think I'm a good engineer but can only earn peanuts doing it.

I actually sent you an email the other day based on your response on another thread but wasn't sure if they filter through. One question I have is where you typically go looking to find work? Web or agency, linkedin or a bit of everything? Is there typically an interview process or is it normally less formal than that?

I'm partly asking these questions as my current notice period dictates that I may have to quit my job 3 months in advance of being available to do something else so I suppose I'm trying to reassure myself that I'll be able to hit the ground running when the time comes.

I assume it's still worth setting up as a limited company and paying a good accountant?

[Angrybiker]

+1 to Big Mole. I contract in another industry.

It's more of a rollercoaster and there are more things to think about; but if you can get the work readily enough then it works out financially much better than a day job. You need to be tough to brave the emotional lows in-between contracts but once you're in your next one you look back and laugh.

[BIG MOLE]

Gad-Westy said:

Ever so grateful for your time on this. It's sort of confirmed some thoughts for me and it's good to hear a real account. Out of interest, have you been effected/concerned about IR35?

My real driver behind this isn't necessarily to earn more than I do now, it is more to be able to earn a similar amount without having to work in a managerial role. It's one of my huge frustrations with engineering that those who do well as an engineer are rewarded by being elevated into management roles that they may or may not be good at and may or may not enjoy. I would say I'm distinctly average with regard to management but I find it soul destroying. I think I'm a good engineer but can only earn peanuts doing it.

I actually sent you an email the other day based on your response on another thread but wasn't sure if they filter through. One question I have is where you typically go looking to find work? Web or agency, linkedin or a bit of everything? Is there typically an interview process or is it normally less formal than that?

I'm partly asking these questions as my current notice period dictates that I may have to quit my job 3 months in advance of being available to do something else so I suppose I'm trying to reassure myself that I'll be able to hit the ground running when the time comes.

I assume it's still worth setting up as a limited company and paying a good accountant?

I have never had any IR35 issues and I have had HMRC give my accounts a good look over on more than one occasion when my accountant has been inspected. In the time that I have been contracting there have been a couple of occasions when we have all been told that the government is going to make life harder for contractors and it has largely come to nothing. There is talk of the same at the moment but I will start to believe it when I actually see it implemented.

I understand completely where you are coming from with regard to wanting to earn a decent living but still work as an engineer and you are right. Salaries for Design Engineers are pretty woeful in most places give the level of academic qualification and technical experience most companies are looking for.

I didn't get you e-mail but I am a bit of an IT dunce (CAD systems aside). When you want to start looking for work my advice would be get your CV up to scratch and post it on a few job sites (Total Jobs, Job Site, CV Library etc.) and tick the box saying that you are looking for work. Make sure that you re upload your CV every few days as this pushes it back to the top of the pile. Also get your LinkedIn account up together and talk to every agency who contacts you in the early days as it gets your name and CV out there. If you did this now (probably better to wait until Feb 2018) you would get a pretty good gauge of the market even before you handed in your notice.

Yes, there normally is an interview process but the tend to be much less formal and you don’t get asked things like “where do you see yourself in 5 years’ time” or “if you were a type of cheese, which one would you be”. They just want to know if you have the technical ability to fulfil their needs. Also you don’t end up doing 2nd interviews and I have got roles just based on phone interviews.

I was lucky when I started contracting as I was in my probationary period at my last permie roll so I only had to give 2 weeks notice but I think with a bit of forward thinking I think you should be able to get the timing about right.

Get a good accountant (ask around for recommendations). Smaller firms are better on the whole as they can look at the specifics of your case in more detail. They will be able to help you set up a Ltd company if you need any assistance although it isn’t difficult.

One more thing. The coolest character in all of the Star Wars films was Bobba Fett, and he was a contractor. Coincidence? I think not.

[thainy77]

BIG MOLE said:

One more thing. The coolest character in all of the Star Wars films was Bobba Fett, and he was a contractor. Coincidence? I think not.

Nothing to add but .