W2? 1099? C2C?

One of the questions I get asked most often from those considering contract work is whether to work as a W2 contractor or should they consider 1099, or incorporate so they can bill corp-to-corp (C2C).  The answer is – it depends – and it mostly depends on you.

If you are going to contract long term, or you have a particular expertise that you sell, eventually you will move from working as a W2 Contract Employee to being Independent / Incorporated – in other words: A vendor.  These are not mutually exclusive, BTW. When you’re a vendor that means that you could be billing on a 1099 basis or you could be incorporated and use your corporation to bill the agent or client corp-to-corp (C2C). 

When you choose to bill as an independent vendor that means you are viewed as a business, which is a separate legal entity, and completely different from being an employee. When you’re independent, you have all the privileges and responsibilities of a business owner.

“Responsibilities” is the key word here:  If you choose either 1099 or C2C, you will take home a lot more money than you would as a W2 Employee. But if you are not prepared to handle the responsibilities (and risks) of being self-employed, mo’ money mo’ problems.

Whether you are a sole proprietor, in a partnership, or a principal of a corporation, if you are deriving “Schedule C” income, you are responsible for obtaining business licenses, paying business taxes, keeping accurate records, maintaining general liability, and other types of insurance.  If you’re working as a vendor, you may need to purchase and maintain your own tools, equipment, prepare your own contracts, invoices, and track your payables and receivables. Some clients will provide you a 1099 form for taxes; some do not. Sometimes they’re accurate; sometimes not.  Regardless, you are responsible for an audit trail of your gross receipts and expenses, maintaining bank records, and insuring you adhere to all applicable laws. If there is a discrepancy, you need to be prepared to prove everything.

When you are independent or incorporated, you are a vendor. Instead of a job description, you have a statement of work (SOW). The SOW details what you are to accomplish for the client, a time frame for doing so, and what are the payment and acceptance criteria. SOWs can be very general or very specific. There’s no “standard” SOW. Its specificity varies by the complexity of the project and your relationship with the client.

When you are a vendor, the client cannot dictate the manner and means by which you complete your work.  So, if you wanted to assembly your PB&J in a different order in your kitchen that is your prerogative. The client can only accept or reject the work.

Most importantly, if you are billing as independent or incorporated, you do NOT have the same legal protections as you would if you were a W2 contract-employee. You are a vendor, just like the Crystal Geyser guy. If the customer decides to go with Sparkletts, Crystal Geyser doesn’t file for unemployment. If the delivery truck gets stolen, Crystal Geyser doesn’t ask the customer to buy them a new one. Similarly, like the Crystal Geyser vendor, you also have an implied warranty with your service.  If something goes wrong, your service is defective, you drop your Pepsi on someone’s laptop, it’s not a “My bad!” you are financially liable for that expense.  If your work is on the critical path of a project, be sure to talk to an insurance agent and your client to ensure you have the coverage you need.  If you own things – like a house – and want to keep it, you’ll need to incorporate.

You want to run a business?  Make big bucks?  We live in a litigious society. Don’t take chances.

Unlike W2 workers, your client will want to pay you every 30 days just like they pay all their other bills. But, what if your client doesn’t pay you in 30 days? What if they pay you in 45 days or 60 days?  Or not at all? How long will you keep working without being paid?  A week?  A month?  Two months? How will you collect if they don’t pay? (A big concern in today’s “virtual” world.) What if they claim your work is defective, and they refuse to pay?   Similarly, who pays for your travel expenses? Are you putting them on your own credit card and waiting for client to reimburse? What if they don’t reimburse you or take months to do so? I’ve worked in big corporate offices my entire life: You’d be amazed how many rich companies don’t pay their bills on time.

If you suffer from people pleasing, can’t say no, can’t write a contract, could never see yourself suing someone, or all this sounds just too unpleasant for you, don’t waste time billing as an independent or incorporated contractor. I’ve listened to lots of stories (mostly from women I’m sorry to say) who thought they could handle this kind of relationship, and ended up being taken advantage of by someone who was really, really going to pay them as soon as <somecrisis> passed.

There’s a certain amount of cold, hard, capitalism required when you truly work for yourself. I can assure you that no one is more unpleasant than someone who owes you money. You can’t put up with excuses. Other people’s bills and emergencies and sick kids are NOT your problem. Always track your hours and tasks; always keep copies of your work.  Be prepared to withhold work until you are paid for it.  Be prepared to walk off the job if you’re not paid on time, and be prepared to sue. 

If you have a tough time sticking up for yourself, can’t handle people’s anger, or you’re afraid of being “mean,” being a vendor is absolutely not for you.

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Excerpted from: The Temp Job: A Survival Guide for the Contingent Worker. Copyright 2021. Pierce/Wharton Research, LLC.  All rights reserved.  No part of this post shall be reproduced without permission. info@piercewharton.com.

Four Reasons People Just Don’t Want to Work (for YOU!)

Employer’s are facing a long-overdue reckoning, and like all reckonings, rather than reflect inward, the focus for many has been external. They’re angry at their inability to control events, and blame others for their predicament.

The blame du jour: Lazy people, who don’t want to work…

……for you.

(Never has a prepositional phrase been more important!)

Here’s four reasons why …..

You’re Disinterested and Indifferent

Consider a job applicant who is bored, disinterested, and going-through-the-motions in the interview. Even worse, what if the applicant were rude, curt, or clearly not listening? Would you hire them? Of course not.

Employers are being interviewed by labor, and they’re blowing it because many of your hiring managers simply do not know how to behave in an interview. They’re rude, disinterested, and entitled. As a result, people just don’t want to work for you. Do you blame them?

You Took Too Long

You’re bored, disinterested, and then call me three weeks (three months!) later and say now you’ve decided to hire me, and I need to call you back right away….yeah, right.

The days of “keeping your resume on file…” went out with the Selectric typewriter. It doesn’t work that way. (It really never worked that way.)

A tight labor market is like a tight housing market. Be prepared to act quickly, compromise, and pay over asking. If you can’t do that, stay out of the market until you’re serious about buying.

You Came in Under my Minimum

Too many employers tell you they can pay your asking price but really have no intention of doing so. Similar to the housing market, the idea is that once the applicants’ commit to the hiring process, they will become so “invested” in closing the deal, that they will capitulate on their original ask for compensation.

This is not the market in which to call people’s salary “bluff.”

If I tell you that I’m seeking $45/hr, you drag me through weeks of interviews only to offer me $43/hr (wink), I’m not amused or impressed with your negotiation savvy, I’m pissed.

Result: I ghost you. I tell all my friends what an asshole you are, and (possibly) post a negative Glassdoor review – permanently damaging your brand. All for the bargain price of $2 an hour. Well done.

You’re Too Far Away

If you’re in a business where I can’t work virtually, the time and distance of my commute may make any job – regardless of compensation – difficult to fill. Restaurants in expensive urban areas, or hard-to-get-to resort communities have the additional challenge of the high cost of living making it unlikely any of the help would be housed in the immediate vicinity.

Consider a commute bonus, or other ways to mitigate that expense for your employees. Otherwise, you’re going to be short-staffed, and the staff you do have will be overworked making them much more likely to quit.

Finally…

This labor shortage didn’t just happen – it’s been coming for decades – the perfect storm of Covid, bad corporate behavior, retirement/death, and ubiquitous social media has weakened the stool upon which capitalism has balanced for decades.

Historically, businesses never worried about competing against one another for talent. Now that they must complete, many simply do not know how.

If you’re still clinging to the notion that the tight labor market is about lazy millennials or enhanced unemployment benefits, and any minute we’re going to “go back” to the way it was, you’re flat-out wrong. Our world, has fundamentally changed, and if there’s one thing we know about change is that it never changes back!

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If you enjoyed this article, check out some of my my posts and podcasts on employment, interviewing, and the contingent job market. Thanks for reading!

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Four Reasons No One is Responding to Your Job Posts

The job market is on fire. Not only are we experiencing the Great Resignation, we’re in the middle of The Great Reshuffling, which will result in The Great Consolidation. If you’re serious about keeping your doors open, a “post and pray” recruitment strategy isn’t going to cut it. Want to get people in the door? Here’s four reasons no one is responding to your job posts:

Your Application Process

Every job site allows employers to choose a “quick apply” or “one-click-apply” option. Use it. Being user friendly and mobile-friendly is a must. A huge number of people ONLY have internet access through their phone. Any company that is insisting applicants go to their site, set-up an account, (some with multi-factor authentication! Really?!), and then populate several forms (with mandatory fields like month and date of my degrees and jobs), is likely to have very, very few applicants.

Also, if you’re going to use Quick Apply, use Quick Apply! Employers who embed additional questions into their quick apply aren’t clever, they’re disingenuous, and it makes me not want to work for you.

Finally, there isn’t a single recruiter out there who thinks AI screenings are helping your efforts. There’s a reason people went to college! Read the resumes! Most importantly, focus on what the applicant has to offer, not poking holes into their background and creating a checklist of what they don’t have.

Essay Questions

I know it’s super-easy and awesome to have each applicant write an essay on how they would deal with difficult stakeholders, or describing their last project, or even telling you why they want to work for you (why not all of them?) That way, you can review, discuss and critique each response and each candidate at your leisure — you don’t want waste your precious time calling or emailing anyone. Essays are perfect for you…but here’s the problem: It’s all about you, and it smacks of entitlement. Worse, it tells me that you don’t see writing as work, which it is. To do it thoughtfully and well takes (my) time, which is the same as (my) money.

Essays are perfect for you…but here’s the problem: It’s all about you, and it smacks of entitlement.

Essay questions embedded in ‘quick apply’ options are infuriating because you can’t opt out of the question or skip ahead. So, since I can’t opt-out of the question, I close the browser and opt-out of the application. It’s usually too late, though, because they’ve got my email, and I’ll be hit with a ton of notifications reminding me to complete my application (which I don’t).

Interestingly, you’d think it would be the big enterprises, and the highly-coveted employers who insist on the “tell me why I’m so beautiful” essays. Nope. It’s the small shops and public employers who have the most hoops when it comes to applying, and that’s why no one does.

Your JD Lacks Focus

A lot of JDs are a laundry list of nice-to-have experiences intermingled with tasks and requirements. Many applicants – especially women and “freshers” – disqualify themselves because they don’t meet all the requirements. More experienced applicants, note the confusion and disconnect with reality, and pass on applying.

If your JD is a laundry-list of tasks, requirements, and nice-to-haves thrown together in no particular priority, your lack of focus and thoughtfulness is a BIG red flag to any quality applicant.

A good JD should be no longer than a page. It should clearly describe the core responsibilities, and to whom the position reports. Education, credentials are clearly stated, and requirements are listed in order of priority. The Must have Security Clearance line should be at the top of the list of requirements, not the bottom! Don’t use the “Preferred” section to obfuscate real requirements (Mandarin speaking “preferred” when your entire team is in Hong Kong? Stop already!)

Most importantly, stop looking for unicorns and purple squirrels; you are not the prettiest girl at the dance, and your hubris is counterproductive to building a real team. Whenever you hire anyone, you need to be prepared to compromise and change both yourself and your organization based on the talent available in the market. If you don’t want to change…..

Bad Habits

Why are so many employer’s struggling to hire? The answer: Bad habits. Zero training on how and what to hire. Zero training on how to interview. Toxic managers with high-turnover permitted to hire and fire “at will.” With human resources the most important asset a company can have – in 2021 – how could this be?

First, let’s recognize that for the past 100+ years, employers have never had to compete for labor. Sure, they said they wanted to be “attractive,” but that’s not the same as being competitive. We know lack of competition stifles the invisible hand of the market, and the over-supply of labor verses limited jobs has resulted in a ruling class of corporate executives — America’s Royalty — whose every want and need must be accommodated because they are “job creators.”

Historically, businesses never worried about competing against one another for talent. Now that they must complete, many simply do not know how.

Labor, unlike employers, has been forced to be nimble and adaptable. We’re used to fierce competition, no safety net, and changing direction quickly. Workers have had decades of practice and advice on how to compete for work, how to write good resumes, how to answer questions in interviews, and most importantly, how to be a subordinate and compliant worker. What training do employers have in how to hire people and how to be a good employer? None.

Employers need to act quickly and level-up their hiring game. How? Create hiring committees, dump toxic managers, bottom-up your culture, hire professional recruiters and coaches, finance real retention strategies. Most importantly, understand that your interviewers are brand ambassadors, just like your salespeople. They represent The Company, The Culture, and The Brand. A bad interview experience can damage your brand – permanently – and that is not something you can afford in this highly-competitive labor market.

Final Thoughts

This labor shortage didn’t just happen – it’s been coming for decades – the perfect storm of Covid, bad corporate behavior, retirement/death, and this ubiquitous social media has weakened the stool upon which capitalism has balanced for centuries. Covid’s timing could not be more remarkable. It has jolted our attention to the global economy, our reliance upon technology, the importance of essential workers, and a Kafka-esque understanding that we are more than our labor.

No workers = No customers = No business

If you’re still clinging to the notion that the tight labor market is about lazy millennials or enhanced unemployment benefits, and any minute we’re going to “go back” to the way it was, you’re flat-out wrong. Our world, has fundamentally changed, and if there’s one thing we know about change is that it never changes back!

When it comes to sales, businesses understand competition. That same focus and concern must carry over into resource management. If they can’t compete, just like in sales, they will be out maneuvered by those who can.

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If you enjoyed this article, check out some my posts and podcasts on employment, interviewing, and the contingent job market. Thanks for reading!

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Tight Labor Market is Here to Stay

If you’re clinging to the notion that enhanced unemployment is the reason you can’t hire help, let me be the first to say you will find yourself short-staffed – if not closed – come this time next year. Here’s why….

A LOT of People Died; They’re Not Being Replaced

Covid has cost us more than 600,000 lives, and it’s not over yet. The ripple that those deaths have caused throughout our country and culture hasn’t even been examined never mind calculated. The loss of a parent has enormous repercussions on a family – not just for a few months, but for years. Worse, we’re all getting old. Our crap diets, epidemic of obesity, Type 2 diabetes, and a variety of other “behavioral” and “non-compliant” health issues will contribute to the rapid exit of many from the labor market.

Declining birth rates, along with a declining sperm count, has been a back-burner socio-economic issue for decades. China’s lifted the one child rule. There’s a huge shortage of women in both China and India, and some countries are now encouraging motherhood via subsidies and other programs.

I’m not sure this will make much of a difference in the birthrate, though. Seems that regardless of incentive, wealth or opportunity, women choose to have fewer or no children, and that trend will likely continue. Maybe motherhood isn’t the greatest job a woman can have.

Wealth Transfer

You think millennials are spoiled and entitled now? Wait until they inherit a ton of money….

We are on the cusp of the greatest generational transfer of wealth in our nation’s history. As Baby Boomers die, they are transferring their wealth — not necessarily to their children — but often to their grandchildren. According to the WSJ, the average inheritance is a little over $200K. That is a life-changing amount.

Money gives you freedom. Money gives you options. Money gives you the ability to take risks. Money makes it whole lot easier to tell people to fuck-off.

Business owners take heed: If you’re difficult to work for and/or your business depends on a never-ending supply of people who are poor, desperate, or have few economic options, you may need to reconsider your business model.

Retirement

The tail end of the Baby-Boom generation (those born in the late 1950s early 1960s depending on who’s talkin’), is nearing retirement age, which can range from 62-72, or earlier, depending on how much money you want to pull from Social Security and your other accounts.

It’s estimated that Covid “forced” about 2 million people into retirement. Some could be enticed back into the job market, but most of these are permanent life changes – they will never return to the labor market.

Money managers are quick to point out that people can’t “afford” to retire, and you are likely to outlive your money, but that’s mostly their commissions’ talkin’. You’d be surprised how little you need to live on when you only have two old people to feed, and all your stuff is paid for.

Nevertheless, depending on the nature of the work and people’s health, some of boomers, of course, will continue to work. However, those are more likely to be at the very top-end or very bottom-end of the income spectrum. The rest of us will sell our homes, move to someplace cheaper, and be done with working for “the man” every night and day.

Small City Employers are at a Disadvantage

Gone are the days that a company in Des Moines or Charlotte or Salt Lake could pay less than a company in San Francisco or New York. If your profession is in demand, and you can work virtually, no longer does your compensation and career path need to be stifled because you want to live in a smaller city.

This is the start of a golden age for labor. Companies that pay more and support virtual workers will suck talent out of smaller markets – to the detriment of those companies headquarter or office-ed there.

Regional pay scales are on the shelf next to the fax machine. No one cares where your office is. If you want IT talent, other highly skilled, gold-collar workers, you’re going to need to level-up your compensation, or you are not going to be able to compete. And, if you can’t compete? You’re not going to be in business.

The Commute? That’s Comin’ Outta YOUR End!

Jamie Dimon, a champion of capitalism (until he’s short on cash, then he’s first in line at The Fed), has “demanded’ JPMorgan/Chase workers return to on-site work and Jamie’s “culture,” adding that if people didn’t like the commute, that’s “too bad.”

Maybe Jamie isn’t good at math? Let’s say you have a 45-minute drive to work, and are on-site five days a week (eight hours working, one hour unpaid lunch), that’s 52.5 hours a week “dedicated” to work – minimum. Men, add in an additional hour of “prep” time; women 1.5 hours of prep each day and now you’re up to 78.75. In other words, almost double the amount of time compared to the hours you are paid for….!!

So, if you’re making $35/hr your real hourly is closer to $17/hr – before taxes and before other expenses and lost opportunity costs, like your side hustle or education. That’s why the poor stay poor. And, that’s also why I’m not going to drive to your office, or commute to a restaurant, or hire a sitter (if I could find one). I think I’ll just stay home, cook from scratch, take on-line classes, and look for job where I contribute 40 hours and get paid for 40 hours. That’s just a smart business decision. It doesn’t make me an entitled ass-hole who doesn’t want to work.

It’s not about the commute — it’s about being paid for all my time. I’m contributing time (which, I believe, is the same as money), to enhance Jamie’s “culture” – whatever metric that is. However, all that good culture money is coming out of my end, not Jamie’s. He’s all up for the “free” culture, but I’ve yet to hear him say that his culture is important enough that he’s going to part-with-some-cash for it.

I believe in karma (and capitalism), so I feel confident Jamie and his other banking buddies will receive a big message about onsite work (probably when one of their cloud APIs goes down in a smoldering heap of technical debt). At that moment, they will see that labor isn’t as forgiving as The Fed. I think Jamie will also learn that he’s not a home-town hero, a lot of employers are more than willing to hire talent from Ohio.

Finally….

Here’s a universal truth: When you’re rich, life doesn’t change very quickly or very radically. For the affluent, things roll-along, even in the worst of times. Because many wealthy capitalists haven’t personally “felt” the change Covid has brought to the labor market, they don’t think that it’s real. They don’t understand this “entitlement” of labor, or that the world is fundamentally different now, and why we just can’t order people to “go back” to our good-old pre-Covid cubical culture.

Even before Covid, the rise of gold-collar, knowledge workers was beginning to reverse the employer advantage in competitive labor markets like tech and healthcare. Crisis, as a cultural accelerant, has firmly flipped the advantage to labor – and economists predict it’s going to stay that way for a l-o-n-g time….

Labor has had decades of opportunity and advice on how to be a good employee. That cannot be said of employers. Most employers are spoiled, entitled, and have a long history of a “Doritos” style of talent management (“They’re just people, we’ll get more…”). And because so many employers historically have shown zero interest in being a good employer, now they can’t seem to hire anybody.

The tight labor market isn’t about lazy millennials or enhanced unemployment benefits. Things have changed, even if they haven’t changed for you personally. Employers need to accept reality, and level-up their hiring game or they’re going to be out maneuvered by those who will.

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If you enjoyed this article, check out some of my other posts and podcasts on employment, interviewing, and the contingent job market.

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Why You Can’t Hire Anyone

The Great Resignation and The Great Reshuffling have converged. It’s official: There’s a shortage of labor. And, the labor you do find wants to be paid more, and if you don’t pay them more, they’re going to quit.

If you need people to run a business, and you want to continue to run a business (because, the thought of you being someone else’s employee (gasp!) is just too horrifying a scenario for you to consider!), here’s where to start:

Lose the Attitude

The “Impress Me” Interview

My headhunter friends are fond of reminding their (predominately white, male) clients that they are, “~not the cutest girl at the dance.” But, even if you’re smokin’ hot, there’s nothing more off putting than someone who thinks they’re better looking than they really are. And, it’s amazing how quickly those killer looks become invisible when you’re in a relationship with someone who is patronizing and entitled.

Too many employers grossly mis-over-estimate their attractiveness at the Employer Cotillion. They think everyone wants to dance with them. They don’t. You’re not doing anyone a favor when you hire them. This is a transactional relationship, not personal one. You’re simply buying time from a service provider to perform a service that you need. And, often times, it is a service that you cannot do yourself. Your hubris and entitlement is counterproductive to building a high-performing team.

Sadly, attitude and entitlement seems inextricably intertwined with implicit/explicit bias. They’re not dismissing you because of your gender, your accent, your age, your college, your clothing, your life choices. They’re dismissing you because you’re not a purple unicorn, and because they’re paying you (!) they WANT A PURPLE UNICORN, dammit! (Note: they have no barn, no feed, and no idea how to care for a unicorn, but they want one nevertheless)

Let me assure every employer, big or small, prestigious or unknown, that your “impress me,” entitled hiring manager interviews are killing your recruitment program, and your brand.

You’re Lookin’ for Love (in all the wrong boards)

I Don’t Feel a “Connection” Interview

Liking the help isn’t listed on the job description as a requirement, but it’s always the #1 requirement for every job. I’ve lost count of the number of folks I’ve listened to grumble about how they’re short staffed, how they can’t find anyone, and how they’ve interviewed sooooo many people, but well, they don’t know, but, ahh, err, I just didn’t feel, aahh, err, a “connection” with anyone.

Enough with the “connection”! This isn’t Tinder. You need someone to manage your SAP implementation, not marry your daughter. You want connection with someone? Post on Match, not Monster.

Looking for love is the root cause of enumerable workplace disfunctions. Too often likeable incompetents (“Someone I’d like to get a beer with…”) are hired rather than awkward, aloof experts. When you consider the competence/congeniality axis, incompetent sweethearts can suck the life out of your company’s bottom line faster than any irritating high performer.

You want to stay in business? You want to grow your business? Focus less on finding a love connection, and focus more building a team with solid skills.

BTW: If you want to hire talent, you need to learn how to manage and retain talent – they have options. When’s the last time you went to a seminar or picked up a book about how to be a better boss?

Your Dream Doesn’t Pay My Bills

What about MY Dreams!

NOTE: Entrepreneurs and small shops: People work for the money. Stop looking to them to finance your “dream.”

The my-dream-must-be-your-dream types generally start their interviews with questions like, “Why do you want to work here?” “Why should I hire you,” (also part of entitlement), or the puppy-dog eyes, and deep, soulful, sigh, “So, tell me, why [companyname]???”

It’s like meeting a blind date, and the first question asked is, “Why are you soooo into me?” Or getting a bid from a plumber, and then asking him, “Sooooo why my garbage disposal??” Nothing could be more irritating.

Am I some kind of dream-killing Nazi? No. I’m a person who is paid to manage time. And, when I hear someone ramble on about the “dream,” what I hear is “~~there’s lots of long days, unpaid overtime, and probably a few unpaid weekends as well.” At no time does anyone ask about MY dreams…

More than 90% of start-ups fail in less than five years. Those that make it past the five year mark don’t catapult to the top of the NASDAQ. More often, they continue to struggle with cash flow, sales, and customer retention. You know: the stuff dreams are made of….

When I look back at the thousands of hours donated to someone else’s “dream,” I realize that what I was really doing was compromising my own dreams, my own career, and worse, my own finances for an “entrepreneur” with a corporate AmEx card and a BMW that never ran out of gas.

My dreams are different now. Now, I dream of a matching 401K.

It’s All About The Benjamins

I Work for the Money!

You can couch it however you’d like, but people work for the money. Period. And, your dreams, ping-pong table, and Thirsty Thursday’s Kombucha pizza parties aren’t going to make up paying 30% below market.

While gold-collar workers may chose more cutting edge or risky work over compensation, they are the few and the lucky rich. Most of us, and especially those at the lower end of the pay scale, we don’t have that choice. For us, it’s all about the money.

Interestingly, I’ve noted that the CEOs bitching the loudest about the Invisible Hand of Capitalism aren’t losing people because they got an extra $30k at their new gig – they’re losing people for an extra $1-2 an hour! Less than $100 bucks a week! That’s not a lot of money for someone who routinely picks up bar bills bigger than that, but let’s pretend you’re not spending your money on $10 beers. An additional $400 a month is enough to cover a car payment, utilities, and a cell phone bill. An extra $5 an hour is more than $10K a year, and while it’s not a life-changing amount, it’s almost an extra $1K a month – half of an average mortgage payment. If you add in a boss who isn’t an entitled asshole, you can see why people are saying, “I’m outta here!” Cleaning hotel rooms, restaurant work, customer-service — those jobs are pretty much the same no matter where you go.

It’s Your Brand

Are you ready to accept reality, and up your hiring game? Here’s what you can do: Hire a professional recruiter. Listen to his/her feedback, and then DO to what s/he says. Be courteous and respectful to all applicants, even the ones you don’t want to hire. One bad interaction can sour a person on a company for the rest of his/her career! AND, if you’re going to be an entitled jerk to your applicants, don’t think for a second that they’re not going to tell their friends, family, and social media contacts about it.

Every interaction, every touchpoint is a chance to enhance or damage your brand. No where is that more important than in the hiring process.

Ensure all hiring managers and interviewers are trained. No one should be a “Brand Ambassador” for your company or be involved in hiring decisions until the are trained. Feedback and mentoring is required. A lifetime of bad habits isn’t likely to change after one training class.

“The world doesn’t owe you a living,” and it most certainly does not owe you a business!! If you’re going to be entitled, insist on free labor to finance your dream, and only hire people you want to have a beer with, finding labor will be very, very difficult for you.

When People Quit, They’re Firing You!

Employers Need to up their Game

Since the dawn humankind, capital has had the advantage over labor. Revolutions, strikes, unions, labor laws, and even unemployment insurance have helped to level this advantage – but the scales were always tipped in favor of the capitalist employer. Those days are over.

Pre-Covid, the rise of gold-collar, knowledge workers was beginning to reverse the employer advantage in competitive labor markets like tech and healthcare. Crisis, as a cultural accelerant, has firmly flipped the advantage to labor – and economists predict it’s going to stay that way for a l-o-n-g time….

Labor has had lots of opportunity and advice on how to interview and how to be a good employee. That cannot be said of employers. Most have zero training in how to interview and little interest in being a good employer – which is why, now, they can’t hire anyone. I won’t be the last to say it: You need to level-up your game or you’re going to be out of business.

***

Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Should I Quit my Full-Time Job for a Contract Gig?

Dear Plume de Poison,

I’m one of those people who has been sticking it out through Covid at a job I hated 18 months ago. My resume is current, and the job boards are filled with positions that pay more and could level-up my career, but the majority of them are contract, and only for six or 12 months.

I’ve never worked as a contractor before. Should I apply for (and take) a contract job? There’s a lot of them out there, but I feel like it might be step down from being an employee. And, I dread the idea that I’d have to look for another job in six months or a year. What should I do?

– Unsure

***

Dear Unsure,

There is no right or wrong choice here, the question is this: What would you do if you weren’t afraid?

You’re right, gig work is a higher risk, but it’s also higher paying, and there’s lot of gigs out there. It’s certainly not a step-down from being an employee. Many highly paid, “gold-collar” experts work only as contractors. If you’re stuck in a dead-end job or dying industry, definitely consider contracting. Contracting offers a way to hop out, acquire some new skills and experience, and level-up your career.

For those new to contracting, know a great gig can be found in a company you might not find suitable as a a long-term employer. For example, you could spent 6-18 months building a software application for an insurance company. That doesn’t mean you want a career in the insurance industry. Similarly, you might desire the stability and culture of public employer, but that comes with the risk that your position could have little private sector marketability, and if (really, when) you lose that job, you could be unemployable.

Being employed is great, but Covid has taught us that being employ-able is much more important.

The contingent workforce has exploded over the past decade. Why? Because CapEx money is much easier to get and manage than fulltime headcount. If you’re going to contract, know your client is hiring a contractor because they do not have permission to add headcount. In many cases, they never will.

Moreover, one of the biggest misconceptions about contracts and contractors is that the contractor’s goal is to work for the client as a full-time employee. This is akin to assuming that every blind date wants to marry you. Nothing could be further from the truth.

While there are some contracts designed to convert contractors into employees, those contracts are the exception, not the rule. It’s much more likely you would renegotiate or extend your contract. (You may not want to extend, so be prepared for that!) When you work as a contractor understand that all contracts have a fixed duration. Know when yours ends, so you can be prepared to move on to another opportunity. There’s lots of them out there.

The choices you make for your career should never be driven by fear, avoidance, or discomfort. Focus on the “what’s next?” not the worse-case scenario of “what if?” If you want better work, you’re going to have to take a risk. If you’re serious about your career, you’re going to have to keep looking for better jobs. Success isn’t one job or one company; it’s sacrifice and difficult choices — if you want it, you going to have to make some of those.

Lastly, some work is just not suitable for contracting. Jobs with P&L, fiduciary, management, or agent responsibilities must be done by full-time employees who have the legal authority to represent the company. A contractor cannot represent the company. In tech, contractors often have limited access to systems because of security protocols. This is why many companies hire employees for IT/DevOps, but use contractors for other IT positions. If your work is not impacted by legal or security constraints, contracting could be an important career strategy for you.

Contractor or employee? In today’s gig economy, it really doesn’t matter much anymore. Evaluate each opportunity presented to you on its own merits, AND without fear. In that way, you’ll be better able to choose what is in the best interest of you and your career.

***

My book, The Temp Job: A Survival Guide for the Contingent Worker offers straight-forward, no-nonsense advice to anyone navigating today’s contingent labor market. If you’ve never worked as a contractor or consultant, it’s essential reading.

***

Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

The Effective “Agile” Executive

Most of us have read at least one of Peter Drucker’s more than 35 books. If you haven’t, you should know that Drucker’s writings are considered landmarks of the managerial profession. A long-time professor at Claremont Graduate University, he is credited with defining management as a distinct profession, and coining the term “gold-collar” and “knowledge workers.”

One of his most popular books, The Effective Executive, was published in 2004. Reading it now, almost two decades later, it’s easy to see why so many of Drucker’s insights have had such an enormous impact on the shaping of the modern corporation.

As an Agilist, I was gratified to see that the core principles of an strong, well-functioning Agile practice are the same disciplines Drucker outlines in the Effective Executive. If you and your organization are looking to become more Agile, here are two key take-aways from Drucker’s, The Effective Executive.

Know Thy Time

When I meet with clients who are dealing with failed projects, high turn-over, missed deadlines, spotty delivery, and assorted other maladies, my first question is this: How does the team track it’s time? The answer always is: They don’t.

My next question is: Do YOU track your time? The answer: I’m an “executive.” (In other words: No.) This is generally followed by an agitated, if not terse, lecture about why they are too busy to track time, or how time is not why their projects are over budget and behind schedule, and then I’m dismissed with: “Everyone is working hard…”

Consider the above, only now replace the word time with money. Were I to ask any executive or portfolio manager, “How do you track your money?” I would be treated to a barrage of spreadsheets, dashboards, and death by PowerPoint. I certainly would not hear, “We’re too busy to track money….”

Time IS money! If you don’t track it, you’ll never have any control over it.

Sure, people show up. People work hard, okay. But if you’re telling me that your Corkscrew Upgrade Project is your #1 priority, and I see that only 40% of your team is allocated to that project (and 60% of that team’s time is spent on website enhancements), then the Corkscrew Upgrade Project is NOT your #1 priority. (That’s assuming you actually have priorities because if you have more than three, you have none.)

People who sell time – attorneys, consultants, physicians – have a keen understanding the value of their time. They understand billable hours, and “The Thousand-Dollar Meeting.” Unfortunately, this intuitive understanding of time is not reflected in many of the steady-paycheck-white-collar Americans I’ve encountered. It’s even worse in the executive ranks, many of whom see time their subordinates’ time as endless (and free).

Executives are salaried; and, for the most part, they come and go as they please. I have yet to meet a single one didn’t think s/he worked hard, but I’ve never met a single one who tracked his/her time with any accuracy. Truly a missed opportunity.

If no one – including you – is tracking company paid time against tasks or goals, then you truly have no idea where time is spent until it’s gone. You don’t know the real duration of anything (there’s no roadmap for future efforts), nor do you have any data to determine whether or not the time expended in these activities was a good value compared with other tasks.

Tracking time is not about punching in and out. I’m not questioning your work ethic, I’m questioning the value of the work produced. Those are two different things.

Tracking time allows you to see exactly how projects are advanced (or hindered) by activities. It’s about metrics, priorities, difficult choices, saying no. By tracking time, you will learn exactly how much of your time, AND your team’s time is consumed in churn, or consumed producing low-value work. Keep in mind, low-value work is not the same as poor quality! A perfect widget only has value if someone wants to buy it!

The inability to assess the value of activities as it relates to time expended is why projects fail and, frankly, why people fail.

Tracking time and tasks is not difficult. It requires a little discipline, but it is one of the easier things to fix. In some organizations, though, this is akin to stepping on a scale. You know you’re overweight and not running a healthy show, but you’re just too afraid to see the actual number! What happens when people start tracking tasks and time? Just like your money (or your food!) you realize that you’re spending a lot of it on things that bring no joy and offer little long-term value.

What am I Contributing?

The mindset of an Agile executive is the humble acceptance that the higher-up the food chain you are, the more removed you are from the actual work, and the less likely it is that you are effectively contributing to the success of effort. You might have a bigger title, make more money, or sit in an office with a big window, that doesn’t make you valuable to the project.

Executives need to ask themselves: What, exactly, am I contributing? Does this team need my expertise to direct their work? Is my participation improving output? If so, how am I measuring that improvement? How much time is this taking from my other priorities? What, exactly, is my role? Role is not the same as title.

Effective Agile Executives don’t just report up to their managers, they are also responsible for owning the relationships with their peers, and even more importantly they need to meet their “downward” obligations to their teams. Scaled Agile Executives insure alignment, negotiate with peers and stakeholders, communicate strategy. They don’t dictate the manner and methods by which the work is completed.

Drucker and Agile agree: Executives accustomed to hierarchy who now support Agile teams must resist the temptation to pull rank, second guess the Team. If your organization is making an Agile transformation, understand that if you want to be an effective executive, you must change your work habits and your leadership approach.

How to Become an Effective Agile Executive

The first step toward becoming an effective Agile executive is understanding that hierarchy – as an organizational model – is a relic of the industrial age, and it is poorly suited to managing knowledge workers and knowledge projects.

Traditionally, to be a “boss” implied that you were an excellent individual contributor. Being made “boss” was a reward for your hard work. The thought behind this structure of hierarchy was that the boss, as an all-star worker – would impart his wisdom and best practices to others. The result of his supervision and management would be subordinates who produce the same excellent results as the boss did.

In theory, this sounds perfectly reasonable, but in practice, we all know, it is a failed model. While being a good individual contributor offers some advantages when you’re the boss, now, it is commonly accepted that management – in itself – is a profession that requires special skills and aptitudes.

This boss-helper model is the foundation for factory management where work is repetitive and “neck down.” In knowledge industries, such as tech, this model is just not scalable. Why, because these industries are dependent upon high-skilled, highly-specialized “gold-collar workers.” Moreover, The Standish Group in Boston annual report shows, through data analysis, that traditional top-down management actually has a negative impact on an organization’s ability to deliver consistent value in cognitive and creative work like, IT, marketing, and sales.

Unfortunately, despite the overwhelming evidence of its lethargic ineffectiveness, top-down leadership is still practiced and greatly loved – by those at the top. Decisions are made, late or ad hoc, good or bad, thoughtful or capricious, and everyone jumps. It’s awesome. Having people do what you say, when you say it, without argument or push-back is kind of sweet. As time goes on, hierarchical organizations develop cultures that value compliance, over disruption. Inevitably, they become stale, risk adverse, old. No one ever gets fired for the bold decision that they never made.

Drucker correctly predicted that “Gold Collar” knowledge workers would ultimately elevate the role of labor and demolish hierarchy in future organizations, and it looks like he was right on trend. In 2020, Gartner predicted that AI would replace as much as 70% of a traditional manager’s workload. This shift will change the executive’s role to that of coach, not commander.

The relationships and mindset essential for a strong, successful, progressive, and high-performing Agile organization are the the exact same qualities Drucker encourages in The Effective Executive,

Executives are not paid to tell people what to do. They are paid to ensure that the right things are done, and that the money and the time expended return a value to the organization. The best way to support a meaningful value stream in a modern organization is to move from top-down boss-helper to bottom-up team-roles where the effective executive functions as a coach and advocate, not as a boss and commander.

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For a more nuanced view on change in mature organization, view this outstanding Ted Talk from Martin Danoesatro, What are you willing to give up to change the way we work? (15 min)

Turn the Ship Around, a video of one of L. David Marquet’s outstanding Talks at Google. In this session Capt. Marquet discusses common myths of leadership and how to become a more effective “flat org” leader in a large organization. (45 min)

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Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

Ghosting: The Unrequited Love of Today’s Job Market

I see a lot of social media posts from people in angst over unrequited love. However, that love isn’t for disinterested romantic partners, rather it’s for jobs – jobs they never had.

Interviewing is a lot like dating, and the world is filled with bad advice on how to do both. Here’s mine:

Consider the Ubiquity of this Post

“Not hearing back from <prospective employer> is really hard. There is no closure or feedback, and it makes it incredibly challenging to gain insights to improve. It would be great if <prospective employers> were able to tell me why I wasn’t their best candidate, or that there were better candidates, or any kind of constructive feedback. Even if it’s harsh or disappointing, it will help me to be a better candidate.”

Signed: Every Rejected Job Candidate Ever

Now, let’s replace <prospective employer> with <blind date>, and let’s consider the absurdity of this same post:

“Not hearing back from a <blind date> is really hard. There is no closure or feedback, and it makes it incredibly challenging to gain insights to improve. It would be great if each of my <blind dates> were able to tell me why I wasn’t their top candidate, or that there were better candidates, or any kind of constructive feedback. Even if it’s harsh or disappointing, it will help me to be a better <blind date>.”

Signed: Seeking Validation from Strangers

Were I to publish the above is any self-help feed, no doubt I’d be hit with an avalanche affirmations to “be yourself,” and not to waste as single-second feeling bad about not hearing from my blind date, and that I should move on to someone who deserved me. Why don’t we feel the same about job interviews?

Interviewers Are NOT Better than You!

I’ve been on literally thousands of interviews over the course of my career. I’ve also had the misfortune to interview applicants. Let me assure you of one universal truth: The notion that the person who is interviewing you is somehow superior, more knowledgeable, more insightful, or “better” than you are is completely false.

We have been programmed to believe that any employer or anyone interviewing or evaluating us for employment is somehow a superior being. Nothing could be further from the truth. Sadly, many of the interviewers I’ve met over the years really have no business interviewing anyone! They have zero training, are terrible judges of character, and most are completely unaware of their implicit biases. Often they have little to no understanding of the job for which you’re interviewing, they’re unprepared, most know nothing about you, many haven’t even looked at your resume.

Worse, in far too many cases, an interviewer’s hubris and poor manners reflect poorly on the company and brand. As a result of this negative interview experience, the job applicant feels, “These guys are a bunch of ass-holes; I’m never working here…” Worse, that feeling is often shared with their friends and associates. This is why many companies now find themselves unable to attract talent.

People get rejected for jobs all the time. It has absolutely nothing to do with your qualifications or your worthiness, or your answer to this question or that question. Similarly, people get hired for jobs, and often it has nothing to do with their qualifications or worthiness, either. Stop internalizing rejection. It’s a number’s game. Keep throwing chips out on the board. Your number will come up.

Stop Dreaming

“I have to fight the urge to stop looking once I’ve applied to a dream job. It’s a tough market and I need to keep looking and keep applying while I wait to hear back.

Signed: Living in a Dream World (It’s cozy inside)

Applying for a “dream job,” isn’t the same as being hired for your dream job. You should never be “waiting to hear back,” from anyone unless you’ve countered their offer of employment. Applying (even if you’re “perfect” for the job), and “waiting” for them to call you? That’s akin to buying a lottery ticket, and then not doing your laundry because your winnings will allow you to hire someone for that.

Keep in mind, even if a job description seems perfect for you, that doesn’t mean you’ll be interviewed. Once interviewed, it doesn’t mean you’ll be hired. Also, just because someone offers you a job doesn’t mean you’re going to accept it. And, just because you’re hired, it doesn’t mean you’re going to stay.

In my book, The Temp Job: A Survival Guide for the Contingent Worker, I recommend to never stop looking for work. I think we have all seen that life is very unpredictable, and jobs can change very quickly. Being employed is great, but in the long-run, it’s much safer and better to be employable.

You’re Mourning the Life You Thought You’d Have

Like buying a lottery ticket, whenever you interview for a job, it’s only natural to dream about your future life and the possibilities. If you’ve been out of work for a while, these emotions can be even more intense. Perhaps the gig is exactly what you’ve been seeking. It might be in a more desirable city or location, the building is in a swank area of town, you’re looking forward to making new friends. Maybe you are in a awful job now, and this opportunity seems like the golden ticket to the chocolate factory. You go to sleep at night with sugar plum fairies dancing in your head, and awaken to a world that is shiny and bright and full of possibility.

And then? You never hear from them.

You call, no response. You email, crickets. And, poof! The perfect life you imagined for yourself is gone, and you are left in disgust, despondency, and despair.

Consider that ghosting is really less about the employer, and more about lotto fever. You’re not upset over the loss of a job — a job you never had — you’re suffering from the loss of the “perfect” life you imagined this job would bring you.

But why, why??!! Why no call? If you consider that question in the same context as you would a blind date, you can easily see the answer: They found someone they liked more OR they’re not ready for a relationship. Those are the only reasons. Do I have to send you a letter? What else is there to know?

It’s a Conversation

“It’s difficult to maintain motivation when there’s a complete lack of responses and reactions to the vast majority of applications. Searching for a job can feel like pouring time and energy into a black hole never to see a return on the investment.”

Signed: Confused about Investment v. Conversation

One of the best pieces of advice I’ve received from a professional head-hunter was this, “It’s a conversation, it’s a little bit of your time, you have nothing to lose, and everything to gain,” and he’s 100 percent right!

Stop looking at applications and interviews as something you are entitled to receive a return on, like stock or real estate. Instead, look at every interview as if it were a conversation with friend or neighbor. I wouldn’t walk away from a cocktail party or conversation in the park thinking, “I spent so much time taking to her. I hope I’m not pouring my time into some black hole!”

If that doesn’t work, try to see your interviews as less of an evaluation of your worthiness and your credentials, and more of a low-pressure sales call. All great salespeople know the chance of rejection is high, but they also know that there’s a pipeline: You’re forming relationships, making an impression. Sometimes you make sale that day, most times you don’t. It doesn’t mean you’ve wasted your time. You got to meet people who are in your business. You got to practice interviewing, asking questions, listening, and evaluating jobs and companies. It’s a little bit of time that you spend paying it forward. I’ve had people call me y-e-a-r-s later after no-go interviews to ask me to join their team. I’ve had interviewers refer me to other companies. I’ve met friends and networking contacts. I’ve gotten referrals for hairdressers and restaurants and other services people. I’ve seen new areas of town, new cities, and learned new things. It’s just a conversation – go!

Ghosting is the Norm, Not the Exception

Life has changed since 1970’s when a secretary typed out rejection letters on her (never his) IBM Selectric, then, typed your address on an envelope, and then folded up the letter, put it in the envelope, and then ran the envelope through the postage meter, hoping the envelope wouldn’t catch on the flap, and rip the envelope. In which case, they would need to lather, rinse, and repeat. And why did they do this? To let you know that they were NOT going to hire you? Who in 2021 thinks this is a good use of anyone’s time?

I can hear all the, “Yes, but(s)” from here! Tough love time: We don’t live in that world anymore. Understand and accept that you will NOT hear from a prospective employer or staffing agent unless they’re interested in hiring you. If you can do that just much, you’ll save yourself a lot of ghosting angst.

***

My book, The Temp Job: A Survival Guide for the Contingent Worker offers straight-forward, no-nonsense advice to anyone navigating today’s labor market. If you’ve newly unemployed, or have never worked as a contractor or consultant, it’s essential reading.

Your job isn’t just a revenue source; your job is a relationship. And, interviewing for a job is a lot like dating. It’s 100% natural to be a little nervous and want to make a good impression, but not every date is going to result in a relationship, and that’s okay!

When interviewing, just like dating, focus less on yourself and more on your date. Spend less time thinking about what you want to say, and more time listening attentively, and asking thoughtful questions. In this way, both you and your prospective employer/client will feel comfortable pursuing a long-term a relationship.

***

If you are unemployed, DM me for a free copy.

Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

So…You Want to Be a “Consultant”?

I’ve worked as a contractor, consultant, and direct employee. Each of these relationships is different; none of them is perfect. Are you ready to ditch your FTE and become a consultant? Here’s a few things to think about….

Can You Run a Business?

I’ve met hundreds of talented individuals who are terrible business people. Consider the great doctor who can’t manage or afford his/her private practice. The finish carpenter who can’t accurately bid out a project or generate an invoice. The full-stack software architect with no ability to write a statement of work or manage a project.

This is where I hear, “Ohh, puh-leeze, I’ll hire someone for that!” to which I respond, “Oh, puh-leeze, no one is interested in working for you!” (Small shops are not competitive employers – don’t think you can hire “some kid” to manage your website). Moreover, hiring help entails huge legal and financial responsibilities, and BTW, where are you going to come up with a weekly salary and benefits and pay taxes when you have one client and can barely support yourself?

Consider the following activities:

  • Marketing/Sales: Finding, qualifying, and pipelining new clients; promoting the business. You.
  • Legal: Licenses, in$urance, banking, taxes. You.
  • $oftware: Updates, equipment, desktop troubleshooting, web page(s), WiFi, Cloud storage. You.
  • Finance: Contracts, proposals, invoices, time cards. You.
  • Overhead: Office rent, supplies, printer cartridges, computers. You.
  • Benefits: Vacations, holidays, sick days, medical insurance, family leave. You.

And that’s before you do any real “billable” client work – which is often >40 hours per week, more if you are juggling multiple projects.

If you read that list and thought, “Ugh!” stay an employee.

Can You Run a Project?

Do you track your time? Do you track your money? Are you disciplined and organized in your personal life? Can you put together a schedule? Can you write a contract? What about a statement of work? Can you track, measure, and demonstrate progress? Can you make a deadline? Can you manage change and say no to difficult people?

When I meet with clients who are dealing with failed projects, high turn-over, and assorted other maladies, my first question is this: How does the team track their time? (They don’t.) Do YOU track your time? (Answer: I’m an “executive.”) Then, I get a big lecture about how hard everyone works, and they don’t have time to track their time.

Here’s my point:

I wasn’t questioning their work ethic, I was questioning their activities.

The inability to assess the value of activities as it relates to time expended is why people fail at consulting – and fail at a whole bunch of other stuff as well.

When you’re a consultant – time is EVERYTHING. Billable time, bizdev time, vacation time, career development time, commute time. And, there’s other things that take your time: Laundry. Food prep. Cleaning. Video Games. Your relationship(s). Did I mention the kids? You’ll need to manage ALL your time like the precious, finite, resource it is. That means you need to say, “I’m sorry, but that’s not a good use of my time,” even to your spouse.

Are You a Push-Over?

If you suffer from people pleasing, or have a hard time saying no, I beg you: For the sake of your personal health, personal finances, and happiness do NOT become a consultant!

Consulting is not all Power Point presentations and conference rooms with killer views. Consultants are small business owners, project managers, and buzz-kill realists. To be one requires a certain amount of cold, capitalist, callousness. How will you handle scope creep? Can you give bad news? Can you graciously deal with getting fired? (coz you will be). What about your ethics? Can you graciously dump a client (coz you’ll need to).

You want to run with the big dogs? You’re going to get pissed on. Consultants don’t have a boss, or HR, or a union, or labor laws – you have client and a contract. What are you going to do if they don’t honor it?

Are You Just Assuming You’ll Get Paid?

Very early on in my career, I worked for a couple of unscrupulous salesmen who refused to reimburse me for almost $2K in travel expenses I had foolishly put on my personal American Express card. This was back in the ’90’s, so that was a LOT of money then, and even more for an irresponsible 20-something who didn’t even have a savings account.

Although I eventually got my money, this whole thing was a huge financial fiasco, and it took me a l-o-n-g time to recover from it. These guys had let me go on Christmas Eve (for real), no severance, no final paycheck. I had to borrow money from family to pay AmEx and rent and bills. I had to go to court to get commissions, expenses, and back wages due me; and I had to freeze their bank account to collect. All of this taught me very important lesson:

No one is more unpleasant than someone who owes you money.

When you are a consultant, you’re a vendor. You don’t have the same legal protections that you would as a W2 employee. Consider the Crystal Geyser guy. If the customer decides to go with Sparkletts, Crystal Geyser doesn’t file for unemployment. If the delivery truck gets stolen, Crystal Geyser still has to service their accounts. They don’t call and ask their customers to buy them a new truck and front them for water.

An employee must be paid no less than twice a month. But you’re not an employee, so your clients will want you to bill every 30 days, and then pay you in 30 days – just like they do all their other vendors. But, what if they don’t pay you? What if they’re late? What if they disagree with the invoice? How long are you prepared to work without being paid? A week? Two weeks? A month? Three months? What if they claim your work is defective and refuse to pay? What about travel? Are you putting that on your personal credit card? What if they don’t reimburse you or take months to do so? What are you going to do about it?

I’ve worked for big, corporations my entire life.

You’d be amazed how many rich companies don’t pay their bills on time.

When you truly work for yourself, you can’t put up with excuses. Other people’s bills, emergencies, sick kids, corporate “process” and vacation time is NOT your problem. If you can’t write clear acceptance criteria for your work, can’t say no, or could never see yourself suing someone, don’t waste time trying to be consultant. I’ve listened to lots of people (mostly women, I’m sorry to say), who thought they could handle this kind of relationship, and ended up being taken advantage of by someone who was really, really, going to pay them when <crisis> passed.

When you consult, you need to track your time and tasks, keep copies of all your work, be prepared to withhold work until you’re paid for it, be prepared to walk out if you’re not paid, and be prepared to sue.

If you have a tough time sticking up for yourself, can’t handle people’s anger, or just can’t be “mean,” being a consultant is absolutely NOT for you!

Final Thoughts

Do you want to consult, or do you want more control over your scope and the direction of your career? Do you want to consult, or do you want more free time?

If you’re a full-time employee, and if you’re wondering if consulting could be for you, I strongly encourage you take a few contract, “temp” jobs. This will give you a feeling for what it’s like to have a client instead of a boss, and also give you some practice at managing the scope of your work and duration of your project.

My book, The Temp Job: A Survival Guide for the Contingent Worker offers straight-forward, no-nonsense advice to anyone navigating today’s contingent labor market. If you’ve never worked as a contractor or consultant, it’s essential reading.

***

Copyright 2021 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission.

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