Key Takeaways
Welcome to the party!
I am Nado the creator of CorpToCorp Solutions. CorpToCorp Solutions is an educational blog for helping IT professionals navigate the IT contracting world.
We don’t discriminate, all contractors are welcome here so feel free to tag along for the ride if you find the content helpful.
If you’ve been an IT contractor for some time, you’re aware that all projects have a shelf life. This is part of the allure for many IT Contractors. With that said, finding W2 contract opportunities is significantly easier than C2C for some roles.
CorpToCorp was created with the goal of making it easier for contractors to find opportunities.
Intro to IT Contracting
According to ComputerWorld, General IT staffers at large enterprises staffers saw an average 3.23% increase in salary. When you factor in inflation, salaries are simply not keeping up with adjustments in the economy. Ultimately, the low increase in salary on a yearly basis means less money which impacts your personal goals and quality time with friends or loved ones.
We have to be somewhat selfish, but strategic when moving throughout our careers when it comes to our goals and financial growth.
Some employers will have you think you must get in the gladiator coliseum called your boss’s office to fight for a reasonable salary increase every December.
Job Flexibility
For those looking for flexibility, IT contracting gives contractors the option to try different sectors, negotiate a higher salary, and break into new industries easier. I and many others have been able to increase our salary by 13% or more by doing IT contracting at various points in our careers.
The current IT contracting world can be fruitful for you and your loved ones if you know how to navigate effectively. CorpToCorp aims to demystify the world which has helped many people do the same work but get paid more and ultimately spend more time with their families and friends.
IT contracting is where you serve as a consultant performing work for a client company for a set term or project but the company paying your paycheck is a 3rd party or your own company.
IT Contracting is also referred to IT consulting. I will use IT contracting and consulting interchangeably.
What is the pay like?
The short answer is typically higher when comparing it on a net paycheck basis. I will be creating a more in-depth post on assessing opportunities between contractors vs non-contractors. There are other factors to consider such as benefits which are important but we’ll save that for a different time.
For now, know that IT contractors typically are paid more on an hourly basis in addition to any other benefits the 3rd party agency you’re working with may offer.
Some of you reading this might be familiar with these random emails asking you if you’re in the mood for a new job. Both of these emails are the pandemic so the current market rates may adjust a bit. I will also talk about different ways to funnel these emails to come to your inbox.
What’s good about these sorts of emails is typically you have all the key details such as initial rate, location, and expectations outlined to start a conversation. Now, remember there’s always room for negotiation these numbers are often just starting points. It’s not uncommon to get $4-$10 more on the hourly rate after negotiations.
Important Rule: Every $1 per hourly rate equates to about $2k extra to your yearly salary
If you’ve ever worked at an enterprise company, then you’ll know it’s not too uncommon that you have consultants essentially doing the same role as full-time employees but making marginally more per pay period. Let me illustrate.
Let’s take this email for this Agile Product Owner role in Connecticut. For simplistic sakes, let’s say we agree to an hourly rate of $55/hr on w2. Now let’s say the same product owners for this role make $95,000 on a yearly basis.
I like to use our friendly calculator at talent.com for quick calculations on net pay estimations. You can see that the IT contractor makes about $460 more after taxes than the product owner to perform the same role as if they were working at the client.
In this example, the difference is not too wide but I’m sure most people could figure out something to do with an extra $900 per month. There are examples where the differences are even larger which is why I think depending on where an individual is in their career this can be a great opportunity to consider.
Why would a company hire IT Contractors?
The business world is competitive and companies need to react quickly with the right tools for the right job.
Let’s say an IT manager at a bank wakes up one day and realizes their mobile application is absolute trash and they are losing business. More importantly, their employees lack the skillsets to quickly improve their mobile applications.
This is a very real example that many managers realize every day.
The IT manager with the help of a business sponsor convinces some finance wizards to approve the hiring of highly-skilled contractors to help the company get up to speed.
Now companies typically have to choose between trying to find an employee themselves or using a 3rd party company to do the recruiting of the employees. Normally larger companies may not know where to look for employees or have the resources to dedicate to finding a new employee. This is where 3rd party agencies come into play and they find potential candidates for the client in return for a determined fee.
When a company hires an employee, they have a laundry list of things they have to do:
- Verify you are not a murderer
- Purchase a laptop
- Handle your health insurance
- Pay you a bonus for your hard work — we only hope at least
- Double-check that you are not a murderer
- Plenty of boring paperwork you don’t care about nor should you care about it
When using a 3rd party agency, the client passes a majority of the responsibility to the 3rd party.
Now you’re probably thinking Nado, why are we okay with these companies passing the buck to a 3rd party? Sometimes clients only need an IT contractor for 6 months and sometimes 5 years. Clients feel they often are getting to test drive before they commit, which is why they are willing to pay you more than a typical rate for your services and if they like you they may even hire you. Who doesn’t like doing the same work but getting paid more?
How Big is IT Contracting?
The market is massive and always growing. As of February 20th, 2023, there are 3,156 contract positions looking for employment within a 15-mile radius of New York according to dice.com. These positions vary from DevOps engineers, Product Managers, Risk Analysts, and many more titles.
What’s even better is that with the current job market, you’re seeing more 100% remote contractor roles dependent on the skill set and the client.
Why do some professionals choose IT Contracting?
Top reasons reported by friends and others:
- Flexibility – Ability to try different sections or roles quicker than navigating the internal transfer process
- Pay Increase – When you get into contracting, the rate you are getting paid is often known early in the process which helps you filter out jobs that might lowball you
- Short Interview Time- Typically when interviewing for a full-time position you often must go through multiple series of interviews (2-3+). While I can’t promise it will be simple, I have had many IT contracting opportunities where I had 1 screening and 1 interview within a week. From there I had a new job opportunity worth a 20% salary increase.
- Low Commitment – IT contracting often has a shelf life of 6 months up to 5 years for a project. Jumping between contract positions is often seen as more forgiving than jumping between full-time employers.
Note: I believe life is about relationships and while you may be able to leave at any time. I think you should still give clients some respectable notice if you decide to pursue another project or effort.
I will take more about each of these topics in detail in other posts.
Current Landscape
The process of finding C2C contracts relies on the below:
- Random chance – A recruiter happens to call you at the right time you’re open to a new opportunity
- Your existing vendor has another opportunity that aligns with your skill sets
- Networking
- Job Boards (e.g. Dice, Linkedin, etc)
The struggles of finding IT contracts by random chance
We believe that for IT contractors being too passive is a sure way to block your blessing. If you are not proactively thinking about where to find leads, then you can easily find yourself surprised if a contract ends and your search takes longer than you want.
I found with the random LinkedIn recruiters, often there was not enough transparency in terms of the client accepting C2C or what the potential pay was. It often could lead to time being wasted for both parties.
It got to the point that often with recruiters, I would ask within 2 minutes if the role is okay with C2C.
Often many clients were ok with C2C, but it was more paperwork for recruiters who didn’t want to go through the hassle. Continue to push along because at the end of the day, it’s your money and don’t let yourself miss out because someone does not want to do additional paperwork.
Why you shouldn’t rely on 1 existing vendor for opportunities?
Vendors are incentivized to find opportunities that work because they make a referral fee for finding great consultants like yourself. However, vendors also are limited to often certain types of contracts. For instance, some vendors only focus on finance clients.
I think keeping relationships with different vendors is an essential approach for keeping potential opportunities in your pipeline.
Most job boards are not suited for C2C
For C2C contractors, the time-consuming aspect is often finding the contract that fits your interest but also is willing to pay your requested rate. Payment transparency is often lacking to help make an informed decision if an opportunity is for you.
What’s Next for CorpToCorp?
Short Term (Next 3 months)
- We’re figuring out our cadence but expect new content at a minimum on a monthly basis.
- Create a repository for IT contractors to share different agencies they have worked with
Long Term (June 2023 – August 2023)
- CorpToCorp plans to create a newsletter/job board to help reduce the archaic IT Contracting job process
If you’re interested in getting started, I recommend you check out our C2C Bootcamp guide.
