2012 Edition: What’s your raise this year?

[blahblahblah]

[quote=dumbrenter]I pay IT consultants for their services and always thought their rates are too high for what they do.[/quote]

Their rates seem high because:

* They pay DOUBLE SS/MDCR tax
* They pay for their own health insurance
* They pay for their own life insurance
* They don’t get 401K matching from you
* They don’t get any bonuses
* They don’t get a yearly raise
* They don’t get paid vacation
* You can get rid of them at anytime, and they may be unemployed for a period of time with no income
* They have a lot more paperwork and taxes to deal with at the end of the year.

With consultants you are paying for the convenience factor. My experience is that most of them do not make any more money than your typical 9-to-5 employee at the end of the day and many make less.

[sdrealtor]

[quote=CA renter][quote=ocrenter][quote=CA renter][quote=ocrenter][quote=sdrealtor]But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.[/quote]

ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.[/quote]

I’m pretty familiar with a number of public employers and their compensation numbers. Of the ones I’m familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.[/quote]

But that’s looking at a short term deviation from the norm secondary to budgetary crisis at all levels of government. Overall, the government employees are significantly overpaid.

http://www.bls.gov/news.release/pdf/ecec.pdf%5B/quote%5D

Where does it say that?

From your link, on page 4:

“Comparing private and public sector data
Compensation cost levels in state and local government should not be directly compared with levels in
private industry. Differences between these sectors stem from factors such as variation in work
activities and occupational structures. Manufacturing and sales, for example, make up a large part of
private industry work activities but are rare in state and local government. Professional and
administrative support occupations (including teachers) account for two-thirds of the state and local
government workforce, compared with one-half of private industry.”
——————

Here are some articles and studies regarding compensation in the public vs. private sectors:

http://abcnews.go.com/blogs/politics/2011/02/working-in-america-public-vs-private-sector/

And this more “mixed” analysis from the Reason Foundation — hardly a “liberal” or “pro-union” organization:

http://reason.org/news/show/public-sector-private-sector-salary

And from Mother Jones (to get all sides in here), another “mixed” bag:

Chart of the Day: Federal Government Pay vs. Private Sector Pay

——————

One comment I have to make about the higher pay for the jobs with fewer degree requirements — many of which are public safety jobs — there are no similar jobs in the private sector with which to compare them.

Not only that, but they mention the much lower turnover rate in many public sectors jobs; this is very important to public employers. The (necessarily) bureaucratic hiring process and extensive initial, and ongoing, training required for these employees is VERY expensive. They cannot afford to have high turnover rates. IMHO, even if they were to go to defined contribution plans (as many suggest), I don’t think they’d end up saving very much (anything?) in the long run. One of the main reasons people are attracted to these jobs is the benefits packages. Take that away, and the turnover rates — and related costs — would be much, much higher.[/quote]

If there are no comparable jobs in the private sector then why do we have to pay them so much? Why would they leave? Where would they go? There are no comparable jobs in the private sector. You just murdered your case. The defense rests.

[sdrealtor]

[quote=CONCHO][quote=dumbrenter]I pay IT consultants for their services and always thought their rates are too high for what they do.[/quote]

Their rates seem high because:

* They pay DOUBLE SS/MDCR tax
* They pay for their own health insurance
* They pay for their own life insurance
* They don’t get 401K matching from you
* They don’t get any bonuses
* They don’t get a yearly raise
* They don’t get paid vacation
* You can get rid of them at anytime, and they may be unemployed for a period of time with no income
* They have a lot more paperwork and taxes to deal with at the end of the year.

With consultants you are paying for the convenience factor. My experience is that most of them do not make any more money than your typical 9-to-5 employee at the end of the day and many make less.[/quote]

SOunds like my job

[SK in CV]

[quote=CONCHO][quote=dumbrenter]I pay IT consultants for their services and always thought their rates are too high for what they do.[/quote]

Their rates seem high because:

* They pay DOUBLE SS/MDCR tax
* They pay for their own health insurance
* They pay for their own life insurance
* They don’t get 401K matching from you
* They don’t get any bonuses
* They don’t get a yearly raise
* They don’t get paid vacation
* You can get rid of them at anytime, and they may be unemployed for a period of time with no income
* They have a lot more paperwork and taxes to deal with at the end of the year.

With consultants you are paying for the convenience factor. My experience is that most of them do not make any more money than your typical 9-to-5 employee at the end of the day and many make less.[/quote]

We’re talking apples and oranges. Most IT consultants work for/are employed by IT consulting firms, they’re not independent contractors. Hourly rates for these firms commonly range from $100 to $400+ per hour.

[an]

[quote=sdrealtor]If there are no comparable jobs in the private sector then why do we have to pay them so much? Why would they leave? Where would they go? There are no comparable jobs in the private sector. You just murdered your case. The defense rests.[/quote]
I was thinking the same thing. Why pay someone more when you know they can’t and won’t leave? Lets try to pay them less and less till we find where the breaking point is. Then that would be the market price. With the money saved, we can either lower taxes and improve service by hiring more.

[an]

[quote=SK in CV]We’re talking apples and oranges. Most IT consultants work for/are employed by IT consulting firms, they’re not independent contractors. Hourly rates for these firms commonly range from $100 to $400+ per hour.[/quote]
$400+/hr for IT? Really? For software engineer contracting house, they’re charging between $100-150/hr depending on experience. Those contracting house provide healthcare, 401k, etc., so they typically charge twice the hr. rate they pay their contractors.

[SK in CV]

[quote=AN][quote=SK in CV]We’re talking apples and oranges. Most IT consultants work for/are employed by IT consulting firms, they’re not independent contractors. Hourly rates for these firms commonly range from $100 to $400+ per hour.[/quote]
$400+/hr for IT? Really? For software engineer contracting house, they’re charging between $100-150/hr depending on experience. Those contracting house provide healthcare, 401k, etc”, so they typically charge twice the hr. rate they pay their contractors.[/quote]

Yes, $400/hr. The label “IT Consultant” spans a pretty wide range of services from programming to installation and customization plus tech consulting. Rates at $400+ per hour at some of the global SI’s are not uncommon. We’re not talking about come and set up my router. (I think that’s usually about $100/hr.) Consulting related to installation of big ERP systems commonly run in the many many millions of dollars.

And it’s more like 2.5-3.5 x hourly pay rate, which is lower than most professional service industries.

[an]

[quote=SK in CV]Yes, $400/hr. The label “IT Consultant” spans a pretty wide range of services from programming to installation and customization plus tech consulting. Rates at $400+ per hour at some of the global SI’s are not uncommon. We’re not talking about come and set up my router. (I think that’s usually about $100/hr.) Consulting related to installation of big ERP systems commonly run in the many many millions of dollars.

And it’s more like 2.5-3.5 x hourly pay rate, which is lower than most professional service industries.[/quote]
I wasn’t referring to the “come and set up my router” type. I’m talking about come and setup big ERP system. I’ve setup a small scale ERP system before (Microsoft Great Plains). It’s not rocket science. It’s much easier than writing those ERP software. I did that while I was fresh out of college too.

At $400/hr, that equivalent to hiring someone full time and pay them ~$800k/yr. I’m not in IT consulting, so I don’t know, but I’m skeptical about the $400/hr rate since I was in the S/W consulting business. Even at the best of time, a S/W architect can’t fetch anywhere near $400/hr.

I didn’t know IT consulting is more lucrative than S/W consulting. Typical rate today for S/W consulting range for 1.5-2x hourly rate (Wipro type to more high end Teleca type). I’d impress to know that there are people who would pay that much more for IT consultant. Even at the high end of your range, 3.5x hourly pay, your typical Sr. IT is probably making around $40-50/hr., so 3.5x that would be $140-175/hr. That’s a far cry from $400/hr.

[Coronita]

Can we all agree being salaried w2 sucks?

I look at my pretax paycheck on my full time gig, and look at it after all deductions and taxes. It’s pathetic.

[SK in CV]

[quote=AN]I wasn’t referring to the “come and set up my router” type. I’m talking about come and setup big ERP system. I’ve setup a small scale ERP system before (Microsoft Great Plains). It’s not rocket science. It’s much easier than writing those ERP software. I did that while I was fresh out of college too.

At $400/hr, that equivalent to hiring someone full time and pay them ~$800k/yr. I’m not in IT consulting, so I don’t know, but I’m skeptical about the $400/hr rate since I was in the S/W consulting business. Even at the best of time, a S/W architect can’t fetch anywhere near $400/hr.

I didn’t know IT consulting is more lucrative than S/W consulting. Typical rate today for S/W consulting range for 1.5-2x hourly rate (Wipro type to more high end Teleca type). I’d impress to know that there are people who would pay that much more for IT consultant. Even at the high end of your range, 3.5x hourly pay, your typical Sr. IT is probably making around $40-50/hr., so 3.5x that would be $140-175/hr. That’s a far cry from $400/hr.[/quote]

The guys that are doing the installs for the big ERP systems (not GP, which is now MS Dynamics), like Oracle and SAP systems pretty typically bill in the $175-$225 range. The EPM guys that do Hyperion and SAP’s EPM solution tend to be a bit higher. Solution architects tend to be a bit more. The tech guys related to those installations are $250 at the very low end, up to $400. The $400/hr for the non-tech work is typically for the very esoteric stuff. (like SSM and PCM work) I may have exaggerated a bit, in that for one, there aren’t too many of those guys out there, and second, there isn’t that much work for them. (Literally, there may not be more than a dozen guys in the US that know SAP’s SSM module inside and out.) But that is the standard rate for some firms.

These guys get paid more than $50/hr. Some of them a lot more. I’ve got a contractor I pay $165/hr because he has skills that very few had, and he won’t become an employee. His 1099 was over $300K. he’s being cut loose because of that, but the employees that have acquired his skills have W-2’s >$200K, and they bill at $250+. On the lower side of margin %, but still a high margin $ for the industry.

[blahblahblah]

[quote=flu]Can we all agree being salaried w2 sucks?

I look at my pretax paycheck on my full time gig, and look at it after all deductions and taxes. It’s pathetic.[/quote]

Hey at least your employer pays you for vacation time, for half your SS/MDCR tax, for some health and life insurance, and maybe even gives you stock options or a 401K match. If you have a good salary and some job security (HA! who has that anymore?) it can be hard to beat actually.

[Coronita]

[quote=SK in CV][quote=AN]I wasn’t referring to the “come and set up my router” type. I’m talking about come and setup big ERP system. I’ve setup a small scale ERP system before (Microsoft Great Plains). It’s not rocket science. It’s much easier than writing those ERP software. I did that while I was fresh out of college too.

At $400/hr, that equivalent to hiring someone full time and pay them ~$800k/yr. I’m not in IT consulting, so I don’t know, but I’m skeptical about the $400/hr rate since I was in the S/W consulting business. Even at the best of time, a S/W architect can’t fetch anywhere near $400/hr.

I didn’t know IT consulting is more lucrative than S/W consulting. Typical rate today for S/W consulting range for 1.5-2x hourly rate (Wipro type to more high end Teleca type). I’d impress to know that there are people who would pay that much more for IT consultant. Even at the high end of your range, 3.5x hourly pay, your typical Sr. IT is probably making around $40-50/hr., so 3.5x that would be $140-175/hr. That’s a far cry from $400/hr.[/quote]

The guys that are doing the installs for the big ERP systems (not GP, which is now MS Dynamics), like Oracle and SAP systems pretty typically bill in the $175-$225 range. The EPM guys that do Hyperion and SAP’s EPM solution tend to be a bit higher. The tech guys related to those installations are $250 at the very low end, up to $400. The $400/hr for the non-tech work is typically for the very esoteric stuff. (like SSM and PCM work) I may have exaggerated a bit, in that for one, there aren’t too many of those guys out there, and second, there isn’t that much work for them. (Literally, there may not be more than a dozen guys in the US that know SAP’s SSM module inside and out.) But that is the standard rate for some firms.

These guys get paid more than $50/hr. Some of them a lot more. I’ve got a contractor I pay $165/hr because he has skills that very few had, and he won’t become an employee. His 1099 was over $300K. he’s being cut loose because of that, but the employees that have acquired his skills have W-2’s >$200K, and they bill at $250+. On the lower side of margin %, but still a high margin $ for the industry.[/quote]

The nice thing about when I use to work for a major EAI integration company was that I had a lot of exposure to a lot of the CRM and ERP systems, because my job was building automation to workflows between these systems. I can tell you although I worked for a competing technology, having experience in these ERP systems + having integration experience with things like Tibco/MQSeries, you could bill out at around $250-300/hr, because not many people at the time knew it. The most lucrative positions were big companies that and a mess of an infrastructure. This rate has fallen somewhat, but the trend has and always been that folks who were “solutions architects” with good knowledge of pre-packaged ERP/CRM and other major backoffice systems and could design the system architecture and walk the talk of non-techie’s often could bill out more so than someone that can “write IT programs, particularly J2EE”…The way most things are going, it’s all about pre-packaged solutions.

There’s a common misconception imho.. Working in I.T. is NOT working in technology. Most likely, you are not working at the bleeding edge, but rather trying to fix sh1t that everyone else created. I.T. is NOT engineering and for the most part not software engineering these days.
Pay can be good if you realize your value is better knowing how to do solutions rather than coding. I.E. you’re better off being a solutions architect versus knowing J2EE/Java/php/name_your_flavor_programing_language in and out. You can find many many people to be the code monkey, but very few people can do a decent job about being a solutions architect. If you find yourself in the coding category, and you’re hired to be a coder, expect to compete with folks in Banglore or the likes who, given a perfectly worded specification and write a module or two for you. You’re probably in the wrong role and you’re probably going to be looking at yoy decline in pay as a result. If you’re in the role of telling people what the solution should be like and finding people to actually write the code to implement your solution, then you’ll do just fine.

If your heart really is about creating the most advanced, breaking technology/innovation hands on coding, work for a real technology company instead of being an I.T. consultant, or create your own products and push them.

It’s for the very reason why I left the I.T./integration business years back and haven’t looked back since. Was tired of spending so much time NOT focusing on technology and on internal bullshit of a companies. I mean, one company I spent years with had a cluster-f of an infrastructure and couldn’t even send out targeted emails on demand because they decided to home-grow an email solution that got so coupled with their ERP system that it couldn’t do anything else but send out email for that ERP system. Could don’t anything related to the web solution and couldn’t do anything for the SAAS offerings. The first thing I did was to help eliminate it and replace it with a SAAS third party system. Heck of a lot cheaper to run, and with guaranteed availability from the third party.. I don’t understand why the company took so long to do it. I mean come on, email has been around for ages.

[Coronita]

[quote=CONCHO][quote=flu]Can we all agree being salaried w2 sucks?

I look at my pretax paycheck on my full time gig, and look at it after all deductions and taxes. It’s pathetic.[/quote]

Hey at least your employer pays you for vacation time, for half your SS/MDCR tax, for some health and life insurance, and maybe even gives you stock options or a 401K match. If you have a good salary and some job security (HA! who has that anymore?) it can be hard to beat actually.[/quote]

Um… No. Actually my current employer eliminated vacation time, and it’s just following what the going trend is… The newest vacation “policy” that employers are pushing goes like this.

You no longer can acrue vacation. Instead if you need to take time off, you just ask your manager for time off for up to 2 weeks. Longer than 2 weeks blocks need SVP approval. Technically, you have unlimited vacation time as you can request as many vacation blocks as possible, BUT it’s always at the discretion of your manager to grant you the time off, subject to whether your work schedule permits.

They are doing this so that people no longer can accrue vacation and have an outstanding liability to pay employees for accrued time. The only people that this really screws though are people like me who work a lot…Since we rarely took vacation, we counted on being paid out for the accrual. Now you don’t accure anymore….

This was documented earlier as a perk. Trust me it’s not a perk. Because you’re now subject to the whime of
1) whether your manager likes you (mine happens to like me)

2) whether your schedule permits

http://money.cnn.com/2011/01/31/news/companies/no_vacation_policies.fortune/index.htm

Consider this. If you’re an old timer, and didn’t always take your 4+week of vacation, at least you accrued the time so that when you left the company, most of it was paid out.. No longer the case. If you don’t take your vacation each year, it’s really you lose it.

P.S…. I doubt you would ever find this done in the public sector.

[blahblahblah]

[quote=flu]
Um… No. Actually my current employer eliminated vacation time, and it’s just following what the going trend is… The newest vacation “policy” that employers are pushing goes like this.

You no longer can acrue vacation. Instead if you need to take time off, you just ask your manager for time off for up to 2 weeks. Longer than 2 weeks blocks need SVP approval. Technically, you have unlimited vacation time as you can request as many vacation blocks as possible, BUT it’s always at the discretion of your manager to grant you the time off, subject to whether your work schedule permits.
[/quote]

Yeah that sucks and you are probably right about the reason they are doing it. It’s like a stealth pay cut. Time to start taking vacations!

[an]

[quote=SK in CV]The guys that are doing the installs for the big ERP systems (not GP, which is now MS Dynamics), like Oracle and SAP systems pretty typically bill in the $175-$225 range. The EPM guys that do Hyperion and SAP’s EPM solution tend to be a bit higher. Solution architects tend to be a bit more. The tech guys related to those installations are $250 at the very low end, up to $400. The $400/hr for the non-tech work is typically for the very esoteric stuff. (like SSM and PCM work) I may have exaggerated a bit, in that for one, there aren’t too many of those guys out there, and second, there isn’t that much work for them. (Literally, there may not be more than a dozen guys in the US that know SAP’s SSM module inside and out.) But that is the standard rate for some firms.

These guys get paid more than $50/hr. Some of them a lot more. I’ve got a contractor I pay $165/hr because he has skills that very few had, and he won’t become an employee. His 1099 was over $300K. he’s being cut loose because of that, but the employees that have acquired his skills have W-2’s >$200K, and they bill at $250+. On the lower side of margin %, but still a high margin $ for the industry.[/quote]
OK, that makes a lot more sense. When you know something that only a tiny portion of the population know, then you can charge that rate. Especially when your job is not steady, since not everyone need that service all the time. I thought you were talking about your average IT guys. At the $400 level you’re talking about, it’s almost like being hired on as a CTO.

[Author]

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