Discussion
I've been employed for the past 20 years. I've always struggled with covering costs. Its tough with a young family.
Recently I was made redundant. I was then offered a contract. To be honest I've never had so much money. I am now thinking employed work isnt worth the effort. Contracting is so much more financially beneficial.
I'm 42 and a qualified accountant operating at senior level / director level or slightly below.
I'm thinking of earning money through contracting and investing money to generate passive income. I don't have a pension but have an investment.
Am I wrong to ditch employed work for contracting
Recently I was made redundant. I was then offered a contract. To be honest I've never had so much money. I am now thinking employed work isnt worth the effort. Contracting is so much more financially beneficial.
I'm 42 and a qualified accountant operating at senior level / director level or slightly below.
I'm thinking of earning money through contracting and investing money to generate passive income. I don't have a pension but have an investment.
Am I wrong to ditch employed work for contracting
Make sure you understand the rules about how you need to pay tax, IR35 has had a serious impact on the risk vs reward of contracting vs perm and it’s easy to just look at the day rate. You won’t get paid holiday, sick leave, pension, bonus etc. You are also at risk of being out of work so need to put some away for when you are. Some people like it, but it’s certainly not what it was, depends on sector.
I contracted in Finance 2014-2020 and like you, made good money.
I ended up moving to perm as the company I was contracting at is great, and matched my contractor "net" pay.
But do please think about what happens if you are properly sick, injured etc - and as an example when Covid struck, I was entitled to claim diddly squat from the Government, luckily the industry I was in wasnt too affected by it so it wasnt an issue, but it could have been a huge issue for me
I ended up moving to perm as the company I was contracting at is great, and matched my contractor "net" pay.
But do please think about what happens if you are properly sick, injured etc - and as an example when Covid struck, I was entitled to claim diddly squat from the Government, luckily the industry I was in wasnt too affected by it so it wasnt an issue, but it could have been a huge issue for me
Cimaguy said:
I've been employed for the past 20 years. I've always struggled with covering costs. Its tough with a young family.
Recently I was made redundant. I was then offered a contract. To be honest I've never had so much money. I am now thinking employed work isnt worth the effort. Contracting is so much more financially beneficial.
I'm 42 and a qualified accountant operating at senior level / director level or slightly below.
I'm thinking of earning money through contracting and investing money to generate passive income. I don't have a pension but have an investment.
Am I wrong to ditch employed work for contracting
I did it for 10 years, starting in my early 40's. At the same time I invested my extra money in property, and my pension (very tax efficient).Recently I was made redundant. I was then offered a contract. To be honest I've never had so much money. I am now thinking employed work isnt worth the effort. Contracting is so much more financially beneficial.
I'm 42 and a qualified accountant operating at senior level / director level or slightly below.
I'm thinking of earning money through contracting and investing money to generate passive income. I don't have a pension but have an investment.
Am I wrong to ditch employed work for contracting
I'm now retired (56) with most of my living expenses paid for by my BTL income. My pension is really just used for stuff like holidays.
I would thoroughly recommend it. I especially like the freedom and lack of work place politics that comes with being a contractor.
Cimaguy said:
I've been employed for the past 20 years. I've always struggled with covering costs. Its tough with a young family.
Recently I was made redundant. I was then offered a contract. To be honest I've never had so much money. I am now thinking employed work isnt worth the effort. Contracting is so much more financially beneficial.
I'm 42 and a qualified accountant operating at senior level / director level or slightly below.
I'm thinking of earning money through contracting and investing money to generate passive income. I don't have a pension but have an investment.
Am I wrong to ditch employed work for contracting
I'm in a very similar position to you, with the same qualifications, doing the same job, albeit I'm older (same age as Elise98). I have a good mix of permanent and contract on my CV, so I can give a balanced view.Recently I was made redundant. I was then offered a contract. To be honest I've never had so much money. I am now thinking employed work isnt worth the effort. Contracting is so much more financially beneficial.
I'm 42 and a qualified accountant operating at senior level / director level or slightly below.
I'm thinking of earning money through contracting and investing money to generate passive income. I don't have a pension but have an investment.
Am I wrong to ditch employed work for contracting
The answer to your question, as with all things finance, is: "it depends".
Right now you're thinking "brilliant, I'm being paid £650 (or whatever) per day, I'm RICH" and it may well be that you're financially better off at the moment. Depends on in/out of IR35, pension arrangements etc, but you will almost certainly end up with more money in your pocket right now. You can also end up with really interesting work (I certainly have) and if you like project work, it's great, as you're brought in for a defined purpose, sort the problem, then depart with your pockets bulging. Win-win, right?
I'd say that contracting in finance at a senior level has much to offer, but it's not all milk/honey. There are things that many interim FDs won't tell you, such as:
1 When you go into contracting you essentially step off the promotions ladder. That's fine if you'd already topped out, but if you had another couple of moves in you (and you should have at 42) then that's promotion foregone. And obviously, as you get promoted, the bonuses tend to be higher, the possibility of picking up equity in a PE deal gets more likely.
2 You can end up totally stressed out. An FD's been fired, so the high-price interim is brought in and has to sort out the problems. It has to be fixed TODAY, so sort it out - we're paying £5k A WEEK for you, so deliver. Not everyone, even the most competent of accountants, can deal with the need to go 0-100 in zero seconds and be able to maintain that level of focus throughout the engagement. I've had times when I was utterly frazzled through stress and it's really, deeply unpleasant. I was being paid £1200/day for that one, so it went with the territory, but that was hard-earned.
3 Not everyone is good at sitting a Board down and telling them some home truths. I often have to have to be able to sell my message, adding some consultancy/strategy as well as just the numbers, and not all accountants find that this comes naturally.
4 Consider the uncertainty. Right now there are lots of roles out there for contractors and they're paying well, but you don't really have a great deal of control of this, other than to try to jump into a 12-month contract when the economic weather looks iffy. You might or might not be able to do this, so to make a success of contracting, you have to be able to tuck away 3-6 months of family living expenses and accept that there are times when you're not working.
5 You're often seen as the outsider, the evil b
d brought in to fire people (or at least to advise the Board that they need to) and there's not much sense of belonging. Only you will know how much you value being part of a team6 It's fine at 42, but the phone doesn't ring as much in your 50s. Sorry, but it's true. I'm lucky in that I've worked at maintaining contacts, networking and generally snuffling out opportunities, but it's something I hate doing. I'm just not a naturally networking-ey person so this is one of the worst parts for me.
All of that said, I live a very comfortable life, have several properties and could stop work now. Financially my portfolio career has worked for me. You don't need to be the world's best accountant to do this (I'm proof) but you do have to be a good business operator. If you're not, you just get pulled in to do year end audit stuff and the like, and that's deeply dull.
But despite contracting having worked for me, I'm going back into perm work from the end of this month. I want to be fully part of a team again and I've managed to find a position where my business turnaround and team restructuring skills are of value for the next several years, not just as a one-off hit. I've negotiated a very good deal - I'd be hard-pushed to get any more as a contractor - and certainty has a value. Plus there's equity ......
longblackcoat said:
2 You can end up totally stressed out. An FD's been fired, so the high-price interim is brought in and has to sort out the problems. It has to be fixed TODAY, so sort it out - we're paying 5k A WEEK for you, so deliver. Not everyone, even the most competent of accountants, can deal with the need to go 0-100 in zero seconds and be able to maintain that level of focus throughout the engagement. I've had times when I was utterly frazzled through stress and it's really, deeply unpleasant. I was being paid 1200/day for that one, so it went with the territory, but that was hard-earned.
Whenever someone asks about contracting I always tell them, you HAVE to be able to sort it out, whatever it is, and do you have the skills/confidence or whatever to do it. I know plenty of overconfident/inexperienced accountants that think its for them that fail very quickly.
My "favourite" experience was when I arrived at an SME to replace an FD of 25 years that they had dismissed, there's your desk, we have no idea what he did or how, just do it please. Oh and by the way all deadlines remain. Fun
longblackcoat said:
I'm in a very similar position to you, with the same qualifications, doing the same job, albeit I'm older (same age as Elise98). I have a good mix of permanent and contract on my CV, so I can give a balanced view.
The answer to your question, as with all things finance, is: "it depends".
Right now you're thinking "brilliant, I'm being paid 650 (or whatever) per day, I'm RICH" and it may well be that you're financially better off at the moment. Depends on in/out of IR35, pension arrangements etc, but you will almost certainly end up with more money in your pocket right now. You can also end up with really interesting work (I certainly have) and if you like project work, it's great, as you're brought in for a defined purpose, sort the problem, then depart with your pockets bulging. Win-win, right?
I'd say that contracting in finance at a senior level has much to offer, but it's not all milk/honey. There are things that many interim FDs won't tell you, such as:
1 When you go into contracting you essentially step off the promotions ladder. That's fine if you'd already topped out, but if you had another couple of moves in you (and you should have at 42) then that's promotion foregone. And obviously, as you get promoted, the bonuses tend to be higher, the possibility of picking up equity in a PE deal gets more likely.
2 You can end up totally stressed out. An FD's been fired, so the high-price interim is brought in and has to sort out the problems. It has to be fixed TODAY, so sort it out - we're paying 5k A WEEK for you, so deliver. Not everyone, even the most competent of accountants, can deal with the need to go 0-100 in zero seconds and be able to maintain that level of focus throughout the engagement. I've had times when I was utterly frazzled through stress and it's really, deeply unpleasant. I was being paid 1200/day for that one, so it went with the territory, but that was hard-earned.
3 Not everyone is good at sitting a Board down and telling them some home truths. I often have to have to be able to sell my message, adding some consultancy/strategy as well as just the numbers, and not all accountants find that this comes naturally.
4 Consider the uncertainty. Right now there are lots of roles out there for contractors and they're paying well, but you don't really have a great deal of control of this, other than to try to jump into a 12-month contract when the economic weather looks iffy. You might or might not be able to do this, so to make a success of contracting, you have to be able to tuck away 3-6 months of family living expenses and accept that there are times when you're not working.
5 You're often seen as the outsider, the evil b
d brought in to fire people (or at least to advise the Board that they need to) and there's not much sense of belonging. Only you will know how much you value being part of a team6 It's fine at 42, but the phone doesn't ring as much in your 50s. Sorry, but it's true. I'm lucky in that I've worked at maintaining contacts, networking and generally snuffling out opportunities, but it's something I hate doing. I'm just not a naturally networking-ey person so this is one of the worst parts for me.
All of that said, I live a very comfortable life, have several properties and could stop work now. Financially my portfolio career has worked for me. You don't need to be the world's best accountant to do this (I'm proof) but you do have to be a good business operator. If you're not, you just get pulled in to do year end audit stuff and the like, and that's deeply dull.
But despite contracting having worked for me, I'm going back into perm work from the end of this month. I want to be fully part of a team again and I've managed to find a position where my business turnaround and team restructuring skills are of value for the next several years, not just as a one-off hit. I've negotiated a very good deal - I'd be hard-pushed to get any more as a contractor - and certainty has a value. Plus there's equity ......
You've given me a lot to digest. I think you're right on the promotions piece. In my former job I was a FP&A director. I think that has helped me to position myself to achieve a decent rate I'm on. The next step is the CFO position which I'm not fully ready for.
The other point on equity is interesting. I've not had equity before. How much can one make through this? I appreciate it varies company to company
MOBB said:
Oh yes, been there.
Whenever someone asks about contracting I always tell them, you HAVE to be able to sort it out, whatever it is, and do you have the skills/confidence or whatever to do it. I know plenty of overconfident/inexperienced accountants that think its for them that fail very quickly.
My "favourite" experience was when I arrived at an SME to replace an FD of 25 years that they had dismissed, there's your desk, we have no idea what he did or how, just do it please. Oh and by the way all deadlines remain. Fun
Cimaguy said:
MOBB said:
Oh yes, been there.
Whenever someone asks about contracting I always tell them, you HAVE to be able to sort it out, whatever it is, and do you have the skills/confidence or whatever to do it. I know plenty of overconfident/inexperienced accountants that think its for them that fail very quickly.
My "favourite" experience was when I arrived at an SME to replace an FD of 25 years that they had dismissed, there's your desk, we have no idea what he did or how, just do it please. Oh and by the way all deadlines remain. Fun
Lol!! Tell us me. Did you pull it off?
Then it started to develop into a nice role, I made the usual improvements and they thought I was the nuts, I was thinking, could quite see myself staying here.
Then they sold the business the f
kers!!If contracting within Engineering Consultancy is anything to go by, (Chartered senior/lead design engineer level), it is a complete no-brainer to work on a Contract basis.....even taking into account sick, holiday, pension, accountancy fee's, insurances, responsibilities, IR35 concerns, dividend tax increases etc etc etc, it would still never pay to back into a staff position - the pay really is that poor.
I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn £125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn £125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
Edited by MattyD803 on Thursday 19th May 15:54
Cimaguy said:
This is a brilliant response. It really is. I am thinking to invest in property too. If I can generate 6k per month by the time I'm 50 through investments I don't need to stress about working or not getting calls. I think you're right it gets tougher when over 50. If in a job at 50 I will be happy.
You've given me a lot to digest. I think you're right on the promotions piece. In my former job I was a FP&A director. I think that has helped me to position myself to achieve a decent rate I'm on. The next step is the CFO position which I'm not fully ready for.
The other point on equity is interesting. I've not had equity before. How much can one make through this? I appreciate it varies company to company
2 Equity obviously depends - when did you get into the deal (from inception or later?), sale price etc. With the usual piece of string caveats, I'd say that if it's a decent PE firm that bought/sold at the right price and that they give you shares in line with a sensible salary, you should see multiples of your annual salary on exit. Everyone will have a different story, but certainly that's what's happened in my career (worked out twice, the third one failed to achieve and we made nothing from it).
Good luck with it. I recommend a year or so of contracting to everyone, even those who don't really think it's for them - you learn so much about hitting the ground running, sorting a finance team in weeks not months, influencing in order to get the decision you need/want. It's a high-wire act (or it can be) but you learn a lot that the average career bod takes years to acquire. And because it's high-consequence - you earn zero if you don't do a good job - you tend to take it seriously and really put the effort in.
OP - are you finding a lot of FD roles outside IR35?
I've contracted for several years at FD or Head of department level but they've always been PAYE. The only roles that were deemed "outside" were where Ive worked on Systems implementation or (in a few cases) setting up a new Finance department. Don't get me wrong, the money's still better than being perm but being "inside" makes a significant difference to your net takehome in my experience.
I've contracted for several years at FD or Head of department level but they've always been PAYE. The only roles that were deemed "outside" were where Ive worked on Systems implementation or (in a few cases) setting up a new Finance department. Don't get me wrong, the money's still better than being perm but being "inside" makes a significant difference to your net takehome in my experience.
Different industry so might be different for you, but a couple of downsides I found when contracting...
- When I had work on there was always loads of it and I was doing long hours to get as much of it done as a I could and maximise the pay. When I didn't have work on and wasn't sure when the next contract was going to come in I was reluctant to spend any money. I'm in a fairly specialist field so the number of potential employers is small, but the number of experienced contractors is also small.
- You're trading on the skills you already have, no matter how much extra training you do when you've not got a contract on, you're going to lose out on a contract to the guy who's got experience of that particular area, whereas a permanent member of staff can often get personal development opportunities to get that experience
MattyD803 said:
If contracting within Engineering Consultancy is anything to go by, (Chartered senior/lead design engineer level), it is a complete no-brainer to work on a Contract basis.....even taking into account sick, holiday, pension, accountancy fee's, insurances, responsibilities, IR35 concerns, dividend tax increases etc etc etc, it would still never pay to back into a staff position - the pay really is that poor.
I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn 125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
I've heard people recommending engineering consultancies as quite interesting and decently paid work as far as engineering goes. I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn 125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
Edited by MattyD803 on Thursday 19th May 15:54
Can I ask how did you get into contracting in this sector initially?
Apologies for the hijack, find it interesting as I work as a Mechanical Eng. myself mainly in Analysis and Design.
I was previously a "contractor" but really just temp staff role and the pay wasn't worth it at that level, I worked out I was better off permanent. Although back then this was more a junior-intermediate level so that was probably why. Feel free to PM/mail to avoid further derailing if you want! Thanks
MattyD803 said:
If contracting within Engineering Consultancy is anything to go by, (Chartered senior/lead design engineer level), it is a complete no-brainer to work on a Contract basis.....even taking into account sick, holiday, pension, accountancy fee's, insurances, responsibilities, IR35 concerns, dividend tax increases etc etc etc, it would still never pay to back into a staff position - the pay really is that poor.
I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn 125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
I generally agree with the sentiment of your post as an ex. Contract CEng Mechanical engineer. However I can assure you there are plenty of staff positions available earning 125k+ salary (and that's in the North never mind the South East) for people who have the drive to run the engineering businesses not just work in them. I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn 125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
Edited by MattyD803 on Thursday 19th May 15:54
For a CEng (or fellow) technical director upwards type engineer £125k+ is not a problem in London and the south east.
Cimaguy said:
The other point on equity is interesting. I've not had equity before. How much can one make through this? I appreciate it varies company to company
Something you may want to consider is that contracting can be a stepping stone towards setting up your own practice. Many people make the mistake of thinking that contracting (and consulting) constitutes self-employment which it sort of is, but in essence, you don't so much own a business but own a job. However the experiences you gain and contacts you make can lay the foundation for setting up something yourself.
John Laverick said:
MattyD803 said:
If contracting within Engineering Consultancy is anything to go by, (Chartered senior/lead design engineer level), it is a complete no-brainer to work on a Contract basis.....even taking into account sick, holiday, pension, accountancy fee's, insurances, responsibilities, IR35 concerns, dividend tax increases etc etc etc, it would still never pay to back into a staff position - the pay really is that poor.
I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn 125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
I generally agree with the sentiment of your post as an ex. Contract CEng Mechanical engineer. However I can assure you there are plenty of staff positions available earning 125k+ salary (and that's in the North never mind the South East) for people who have the drive to run the engineering businesses not just work in them. I have all of the major international design consultancies on my door step here in the South East (most within 5 miles), who work across pretty much all of the various specialised sectors (Rail, Nuclear, Oil, Gas, Defence) and have worked for most of them over the years and there isn't a single staff role amongst those guys that would match the same take home pay as I currently achieve as a contractor, on what is quite an 'average' rate.
Best of all, I suffer no office politics, no need to climb the greasy pole, no painful and useless development review nonsense and a get nice variation in workload, working environments and teams. I chose the projects and clients I work for and politely decline those positions which are clearly looking for a 'scapegoat' - I wouldn't change it for the world.
I fully appreciate that other sectors may be different and there may be situations where a 40 year old might be able to earn 125k+ salary......but engineering isn't one of them sadly. If I can get a further 20 years doing this, and keeping my head down, I'll be quite content.
Edited by MattyD803 on Thursday 19th May 15:54
For a CEng (or fellow) technical director upwards type engineer 125k+ is not a problem in London and the south east.
For what its worth I completely agree with Matty.
I started contracting after only being in staff roles (Mechanical design engineer) for a few years. I was looking around me at more senior engineers jumping through hoops for "jam tomorrow" and I thought "f
k that".I have been contracting for almost 15 years now and have never struggled to get work, lots of it being repeat work from longstanding clients.
I regard myself as a bog standard contract design engineer. I don't sell my self as senior or lead. I never bothered to get chartered status. I just go to the client, they ask me to design XYZ, I design it, client is happy, I leave.
I have never worked a weekend, my phone doesn't pick up work e-mails, I never have to travel for work, don't go to many meetings, have no responsibility for the work of others. For all of this I get a net income that would require a salary of £100-150k/year depending on which industry I am working in at any time. Obviously I don't get the sick pay, holiday pay, and have to sort my own pension, but a similar type of role as a staff position where I live (South coast) would be £40-50k with more politics and responsibility.
If you are an engineer and want/need to earn more, it's a bit of a no brainer.
Just as a bit of a counterpoint to the engineering contracting, I am currently going the other way. Rates have been stagnant for some years which hasn't been the case with the equivalent salaries. I am in civil engineering and tend to work in heavy engineering, so petro-chem, mining etc, North East based.
Also quite a few of the bigger companies are now IR35 risk averse so a fair amount of the roles are going inside if not already there.
I've secured a salaried role that sits somewhere between the lower and upper of what I would accept as an hourly rate ltd comp. Skewed more towards the lower end though.
My plan is to sit out a couple of years on staff, rinse the training budget and get professionally accredited. Hopefully this settle and the bigger players take a more pragmatic approach to IR35 and I can leverage a better rate come that time.
The caveat to the above is that I can only talk from my point of view in my industry but I have been 17 years as a ltd comp contractor. Also you may want to read up on the current MSC carryon before you decide on an accountant.
Also quite a few of the bigger companies are now IR35 risk averse so a fair amount of the roles are going inside if not already there.
I've secured a salaried role that sits somewhere between the lower and upper of what I would accept as an hourly rate ltd comp. Skewed more towards the lower end though.
My plan is to sit out a couple of years on staff, rinse the training budget and get professionally accredited. Hopefully this settle and the bigger players take a more pragmatic approach to IR35 and I can leverage a better rate come that time.
The caveat to the above is that I can only talk from my point of view in my industry but I have been 17 years as a ltd comp contractor. Also you may want to read up on the current MSC carryon before you decide on an accountant.
Edited by duffy78 on Monday 23 May 09:58
John Laverick said:
I generally agree with the sentiment of your post as an ex. Contract CEng Mechanical engineer. However I can assure you there are plenty of staff positions available earning 125k+ salary (and that's in the North never mind the South East) for people who have the drive to run the engineering businesses not just work in them.
For a CEng (or fellow) technical director upwards type engineer 125k+ is not a problem in London and the south east.
You not wrong, I have friends and family who work for some of the big names, earning large £100k+ salaries as 'Technical Directors' and similar......but their responsibility levels, duties and expectations are a world away from mine. They spend their life answering calls and emails all times of evening and weekend, dealing with regional bosses & client fall out, expected to attend & host various national meetings, seminars and conferences, hiring and firing, office expansion/relocation, dealing with major office politics and general BS....with very little actual engineering involvement.For a CEng (or fellow) technical director upwards type engineer 125k+ is not a problem in London and the south east.
I was really trying to point out that at my age / experience / level of responsibility / young family, it is a complete no brainer. In my current role, I turn on my laptop at 0700hrs (at home), do 10hrs of engineering, turn it off at 1800hrs (still at home), work only 4 days a week, with zero Line Management concerns and zero responsibility outside of my own day to day workload. I wouldn't change it for the world.
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