Do Contractors Earn More Than Full-Time Employees?
To contract or not to contract—that is the question. Whether ‘tis nobler to sit at a desk as a full-time employee, and spend your years interacting with the same group of people, or to sail forth as a contractor, and deal with a variety of clients of varying tempers and budgets… Actually, let’s cut the Shakespeare: Do contractors make more money than full-time employees? That’s the only question on the minds of many tech pros, especially the ones who can’t stand working for a particular company anymore and want to try their hand as a gun-for-hire. According to the latest Dice Salary Survey, the average salary for full-time employees is $93,013. Meanwhile, the average salary for contractors employed by a staffing agency is $98,079; those contractors who work directly for an employer (i.e., without an agency as an intermediary) pull down an average of $94,011. Yes, contractors earn (on average) a bit more than full-time employees—but contracting comes with its own set of issues. For example, full-time employees (hopefully) have a range of benefits and perks to supplement their salaries, including health insurance and paid vacation; contractors, unless they work for a staffing agency that provides insurance and other good stuff, must cobble together their own benefits. That being said, many agencies offer health and dental plans, along with retirement benefits, paid vacation, and other perks. With the tech industry’s unemployment rate notably low, and companies hungry for tech pros with the right combination of experience and skills, staffing agencies are more willing to negotiate with contractors who want these perks. Contractors who aren’t affiliated with a staffing agency could still have the opportunity to negotiate for benefits and perks with their clients, although this is often a trickier process. Some clients are more than happy to give contractors access to some of the same perks as full-time employees, such as use of the corporate cafeteria; negotiating for something like paid time off, however, may require a lot of time and effort (not to mention delicacy), if only because it often means contracts will need to be re-written. Key to such negotiations is documenting performance. Whether they work for a staffing agency or operate independently, contractors must have a clear SOW (statement of work) and take care to document their achievements and attributes. If you prove yourself a vital part of the client’s operations, it’s easier to leverage that for benefits and perks. Documentation is the foundation from which all future negotiations rise. For a handful of skilled, lucky contractors, it’s possible to pair the flexibility of the contracting lifestyle with at least some of the perks and benefits assigned to full-time workers. But as the Salary Survey shows, even contractors without benefits can still expect to make a very healthy amount of money, provided they have in-demand skills.