Greetings!
We also offer a book giveaway, link to a free copy of Peter Taylor's The Lazy Project Manager, and take a look at a project management within the critical chain in the Book of the Month review.
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Making the Switch from Permanent Employment to Contractor
Words: Lindsay Scott
Whatever your work status - an interim contractor or full time employee - each may envy the other's position!
Let's look at the terms involved with the different types of employment; all of these are common in the project management marketplace today
"Contract"
An interim or contract person is likely to be trading as a sole trader; through his or her own limited company; through an umbrella company; or on their agency's payroll under PAYE
Interim or contractors could be a replacement project co-ordinator to cover an absent full time employee, an additional project manager to deliver a specific one off project or a specialist project consultant assigned as a change catalyst for a strategic corporate programme.
As an interim or contractor, you have a contract between your client and your Ltd Company or yourself as a sole trader. You are responsible for raising invoices and collecting payments and ensuring you meet and pay your tax obligations. There are usually no further benefits to the contractor other than the daily rate and possible expenses allowance.
"Permanent"
In the position of a permanent or fixed term employee, salaries are paid via PAYE and in both cases you will be accruing holiday and your employer will be paying both employers and employees NI, plus income tax all pro rata for the fixed term of your employment. The only difference between the permanent and fixed term status is the contract you sign as a fixed term employee will be - as stated - for a fixed period of time.
Both permanent and fixed term employee are likely to receive the same company benefits i.e. pensions, bonus etc.
In terms of salaries; it is generally the case that the contractor and interim will receive a considerably higher salary/rate than that of a permanent or fixed term employee. This is ususally equated to the amount of time a contractor would be working in a give 12 month period; the advanced experience they possess and the track record they have in delivering short term projects or assignments
Which is Best - Contract Or Employee?
Contractors' work-life balance
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1/3rd of the year looking for work - Can you handle it?
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1/3rd of the year on a beach - Ideal eh!
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1/3rd if the year working - delivering the bacon £$£
So are you ready to forgo your holiday because the contract work is available?
Contactor holidays are generally not paid - when you go on holiday so does the earning. Most contractors will have forgone, started late or finished early their annual holiday or at least weighed up in their minds the cost of that holiday - no income and using invoiced money to pay for it. You have to think in your rate calculation how you plan in holidays as well as paying the tax man and all you other bills over the cycle of a year.
Also, it could be 90 days before you see payment of your first invoice for your first month's or week's work.
Higher risk equates to higher reward with likely greater variety in assignments and companies to work with. Or you may take the opportunity to pass on variety and become the expert in one area at a single company - and yes nearly forgot to consider the challenges of IR35!
How Do I Become a Contractor?
The vast majority of project managers we meet have been at one time a full time employee.
As an employee, they have taken the contractor route usually after working along side contactors and being impressed by the earning power and perhaps the romantic idea of working when they want.
An event or tipping point often occurs that pushes someone to contracting for example redundancy or the need to maximise incomes. Redundancy is particularly useful as this often provides the cushion required to get started.
We are often asked about becoming a contractor. If you are in full time employment it is difficult, as most contract positions are required immediately to fill a skill gap.
Availability is important and the client is unlikely to want to wait until you have gone through the process of working your notice period of a month or more. Contactors are taking a risk as they are effectively bidding for a piece of work over a fixed period of time. If they do not win that bid they may be short of work.
Do you have the right skills? Are you master in you area? Is there a demand for your skills? What is your Unique Selling Point? What does the market want now and what will it want?
Finally, as a contractor what price to promote yourself at? Too high or too low and you can miss your target role.
Finally, a Few Other Things to Consider
In summary most good contractors are looking to develop themselves by taking on new challenges in different market sectors or for example working with new technology or business processes. You can still have a career which helps job satisfaction.
Do you have business acumen? As a contactor are you prepared to be disciplined about timesheets, invoices and record keeping? Also, get an accountant and don't forget you are likely to have to register for VAT and they may visit and inspect your accounts!
Some things to consider when setting up a contracting company - in essence you are establishing a small business.
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Company set up - registration, directors, company secretary
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Accountant - to keep you inline and ensure you pay yourself and the tax man
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VAT registration - there are stipulations as to when you must be registered
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References - 1 or 2 work references plus a character reference are important to have.
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Go to market plan - how will you sell yourself and to who - what is your unique selling point? In a competitive contractor market you need that edge
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Invoicing and Expenses process - unlike most salaries, invoices are not always paid on time!
What Makes People Want to Leave Their Job?
- overly bureaucratic project structures;
- inability to let go of projects;
- the company's next project isn't of interest;
- inspiration is lacking;
- project's over, so that's it: job done!
Peter Taylor is the renowned author of The Lazy Project Manager (which is available free - details below) and its accompanying blog: "As a project manager I tend to view all my jobs as projects. Therefore, for me, it is time to think about moving on when the current 'project' is coming to an end; and the next one on offer within the same company is either not stimulating or not visible."
Ron Rosenhead is a veteran project manager and runs Ron Rosenhead's Project Management Blog: "One reason that I have seen is that they were sold something that does not exist e.g. we have a robust project management culture but when the person arrives it is far from robust. Yes, they should do their due diligence; however this is difficult and may not be seen until you have actually started in the business. There are lots of others that for me are like the stones in your shoe:
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no sponsor so who makes the key decisions or a sponsor in name but not in operational project management terms
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poor governance of projects
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not allowing project managers to make decisions - the over bureaucratization of projects
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poor risk management
Derek Huether, PMP, runs The Critical Path blog (via Twitter): "People quit their jobs when they feel they no longer make a difference or feel uninspired."
- Change jobs to stay motivated. Every two years is good. As a PM that might be as simple as taking a new project. Company moves are more dramatic changes, but sometimes necessary.
- Start a new job by being a change agent, and then you'll have that 'persona' and people will expect it - you will be able to do more to quiet your frustrations.
- Don't be afraid to change companies, but realise that the grass often only appears green from a distance...
- Put work in the overall context of your life - how much does 'work' matter as opposed to 'funding the family' - when you understand your personal business case for going to work, you can take corrective action when the business case becomes breached.
- Find ways to make work fun. It makes the week go much quicker."
Josh Nankivel, PMP, runs pmStudent.com: "Primary factors include:
- Dissatisfied - basic needs are not being met (salary too low, etc.)
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Unsatisfied - meaning that basic needs are covered (pay is right, etc.) but there are other aspects that are not up to par"
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Pay
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Professional Growth
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Organizational/Team Culture and Communication
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Individuals who they must work closely with and can't get along with, are working against them, etc. (especially a boss)
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Industry/Role change
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Lack of alignment/purpose for individual contributor to larger team/organizational goal
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Under utilization of skills
Emilie (last name withheld) is a Project Manager for a educational resources provider: "I have a couple of factors which could be, in my opinion, reasons to search or take another job.
- Career progression: project management evolves around time-bound project life cycles. With each project closure comes the usual evaluation of the work done for the project...but also what as been achieved as a project manager. So there prompt to review personal objectives within the overall career progression. Within a company project managers may also be known as specialist for one type of projects and want to take a step further and learn new skills. I believe career progression is one of the key factors.
- Salary: even though companies usually offer salary increase, it's usually easier to achieve a higher salary increase when taking on another job than applying for a salary increase within the same company. Beside, these days, most companies have frozen internal pay rise due to the economical environment
- Mobility: to follow a partner or relocate to a more suitable environment (need to leave the busy big cities to move to the country side, or the other way around)
- Internal conflicts, need to change environment...slightly less positive but definitely a factor to move to another job."
Pawel Brodzinski is a seasoned manager in the software industry who blogs regularly at Software Project Manager: "Let's consider for this argument that people are generally happy with their current jobs. What changes over time that they get motivation to look for another job? A few things are possible:
- Some of nice-to-haves become mandatory requirements. Typically it would be an option to get promoted or move to another, more interesting, position as we get more experienced. If I want to move to other position but my current company offers me no choice I look for another job. And it doesn't necessarily have to be about promotion to management.
- We become tired of the current role. If it's not directly about changing the role it's usually about burnout. We don't want to work on the same project we have worked for the last five years or we want to learn new technology or something like that. If the organization doesn't provide any options to achieve that we start considering a different job.
- Money. Despite what we use to say we can be bought simply for more money. How much more? It is an individual thing but majority of us have a price tag attached. Paying that price will make us to change the job even if we are happy with the current one and don't actively look for another. Head hunters often use this path to take over specialist for their clients.
- Our job sucks. As we work we learn about the organization and realize how many things we don't like about it. We learn that the company doesn't really fulfill every point on our mandatory requirement list. It appears our boss suck or the organization is totally formalized or we have virtually no freedom. This process of learning the company can last long time, especially if we get promoted along the way thus get access to new levels of knowledge.
I think one more thing is worth stressing. We rarely change the job just to get more exciters, as long as nothing important frustrates us. Even more, as most of people prefer to play safe even if we get frustrated just a bit it is rarely an impulse to look for another job. We have to overcome our natural fear of losing safety first so we usually need much negative motivation to make a move."
The Funetic Alphabet Book Giveaway Contest
Words: Michael Hides
Having the fairly modern telecommunications equipment is no guarantee that we still communicate effectively and invariably we end up having to spell names whilst on calls. Whilst we try to use the phonetic alphabet, I must admit to occasionally substituting different words. With this thought we felt the time was ripe for a more up-to-date phonetic alphabet and wondered what a more culturally relevant version might be. If nothing else, it can often enlighten a telephone call. This is our collective thoughts but would be interested to hear yours.
Note from editors: If you respond to us with what we deem to be the best suggested - and completed - alphabet, we'll provide you with a free copy of The One-Page Project Manager for Execution by Clark A. Campbell with Mike Collins.
Review: Critical Chain Project Management
Author: Lawrence Leach
Publisher: Artech House
Size: 276 pages
If you wanted a book as a primer for CRITICAL Path Project Management (CCPM), this is not the book for you; it is somewhat disappointing in terms of content and clarity. It sits on the fence between a primer in basic project management and heavyweight project management. Worse still, it takes until Chapter 6 to get to the real focus of the book, which is then convoluted by constant references to other authors and project management luminaries such as Dr Eliyahu Goldratt, and Dr W. Edwards Deeming. The prose is awkward and inconsistent and where verbosity would be a distinct advantage, brevity takes its place.
This book purports to be for the professional [project manager] but makes constant reference to basic, and at times very basic project management principles or methods. There is a constant battle of pro and con between the author and Goldratt, and others, with the author proposing his thinking as preferable. In fact the references to Goldratt and Theory of Constraints (TOC) are so many that one wonders why use this book when Goldratt has written several excellent books around this subject leading into CCPM. There is not enough groundwork on project management principles to be useful as a primer and far too little on CCPM to be valuable for the professional.
I personally don't think this book presents anything unique on CCPM but rather a critique of other authors works. I found it an unconvincing book and one unlikely to sway the majority towards CCPM, especially considering that very little software exists for CCPM whereas the greater majority supports critical path. Without doubt, the author is clearly well read and knowledgeable in wide ranging aspects of project management, and particularly CCPM, but the writing style used in this book does him no credit and is difficult to assimilate. The book starts with an outline of project management, except not enough for the person new to [critical path] project management wanting to know why CCPM may indeed be a better method. It then presents a hurried look at the major influences to project management such as PMI Book of Knowledge, Lean, TQM and its successor Six Sigma. Even the section on project constraints sheds no new wisdom but merely quotes from several of Goldratt's books.
Chapter three introduces the constraint theory and contains useful but basic information on resource application and leveling but the constant references to Goldratt's works are almost a book review in themselves. We get nearer the mark in chapter four where methods for developing the constraint - critical chain - buffer management are presented but also includes a lot of "padding" extracts from the PMBOK and Goldratt. The fifth chapter adds very little to the core subject by outlining some basic project-process summaries. The book doesn't really get into its stride until the sixth chapter but at last, a focused chapter on single project CCPM but all too brief and with insufficient detail. The next chapter develops the theme started in the previous but extends it to an enterprise or corporate or more commonly, programme basis but again I fear, too brief to be valuable as a reference work.
Chapter eight includes details of proprietary software (Concerto) and project control and the importance of buffer monitoring on a regular basis to assist with forward planning. Chapter nine is about implementing the change to CCPM and the pressures caused by the change process itself and despite the brevity, captured the salient points that project managers need to address when faced with such an implementation.
Chapter ten outlines the usual matrix approach to risk analysis and management and how CCPM simplifies the management by eliminating common-cause variations. I found chapter eleven most instructive in that it presents various matrices that describe how CCPM links and relates to other processes. Its prose is more flowing than previous and this in itself makes reading and assimilation easier. I am all for brevity when appropriate but grasping the concepts of CCPM needs more detail and background or supporting information than this book presents.
Reviewed by Peter McKenzine-Midland
ABOUT OUR REVIEWER: Peter McKenzie-Midland is a Senior Project Manager and has 28 years worldwide experience of oil and gas, energy, environmental, and ICT projects. He is currently responsible for renewable energy projects including offshore wind farms, tidal, and wave power generation systems. Peter's experience is predominantly in the offshore and marine arena and has spent many months on vessels of opportunity managing such scopes of work as inspection, maintenance, repair, survey, construction, and soil intervention such as dredging and rock dumping.
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Q&A
"Why is there a change in how recruitment is being conducted - the process is taking so long!" - Lakshmi, Manchester
Thank you for your very valid question - firstly let me begin by stating that not all employers are taking their time with the recruitment process but yes there is a notable shift in how organisations are bringing new talent on board. There are a number of reasons for this shift; one being that "sign off" or approval for roles is taking much longer as financial directors are pressured to consider every cost independently and stick to tight budgets. This may mean that line managers are instructed to go ahead and start the process of engaging with recruitment agencies whilst sign off is being sought.
OK so we have covered a number of areas in regards to in-house process but there are other elements to consider such as the shift from traditional contractor position interviews being a one hour CV Q&A, offer and jump on board swiftly - start to end of process (from CV being presented to line manager to start) within 2-4 days. Now we have requests for candidates to take tests, competency based interviews at two stages and presentations also; stretching the process out to often two weeks before a contractor begins the new assignment. As the contractor recruitment is moving toward the traditional permanent recruitment route the shift on the permanent side has also shifted to much more stringent testing also.
When applying for positions ensure you ask the question - what is the process? When your CV is being forwarded to employers through recruitment agencies, agree a communications plan with your agent. This should ensure you are kept in the loop without having to resort to pester!
If you would like to put a question to Nicola, contact us and it could end up in a future edition of the Tipoffs Q&A. For more examples like this and/or further help & advice regarding extending your search and creating professional and effective cover letters refer to our Project Management Careers clinic / Project Management Careers Advice pages.
Got a question for us? Contact us today.
In This Issue
Featured Article
In 2008, Tipoffs and the Benchmark Report were concerned about project management practitioners' hopes of securing a solid work-life balance. And when it comes to job satisfaction in the new decade, a litany of factors are being considered by PMPs.
Vacancy of the Month
Social Media Roundup
Around the Web
- ANDY MURRAY'S BLOG: Prince2Author
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Prince2.com
- P2UG - The International Forum for Prince2 Users
- Queensland University of Technology Report: "Creating Value In Project Management using PRINCE2"
- "Executive Guide to Directing Projects within a PRINCE2 and MSP Environment"
From Arras People & How to Manage a Camel
- Arras People Registration
- CAMEL: APM or PRINCE2 - One or Both?
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TIPOFFS (June 2009 - PDF): The PRINCE2 Issue
- CAMEL: Got PRINCE2? So What? Now What?
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CAMEL: PRINCE2 Meets the Grumpy Old Man
Websites
Podcasts & Vodcasts
- The Project Management Podcast from Arras People
- Parallel Project Training
- Project Shrink
- The PM Podcast
- PM411
- PMThink!
Arras on Twitter
Looking for Project Careers Advice?
Need project management careers advice? Arras People can help
It's difficult finding someone to talk to about your project management career - if you're looking for a job and not getting the interviews you need or thinking about your skills gaps and capabilities but not sure about where you need to focus - Arras People can help you.
A third party view of the world providing an one-to-one session with you could be just what you need to plan your next move.
Take a look at the project management career clinics for more information
Project Management Training
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The Arras People Project Management Training Directory has been created to help you navigate the project management training courses and provider options available to you.