[UPHPU] Freelance Opportunity Starting ASAP

[Robert Merrill]

On 12/4/06, Joshua Simpson <std3rr at gmail.com> wrote:
>
>
> On 12/4/06, Robert Merrill < merrilr at sostechnical.com> wrote:
> >
> >
> > I can agree to this in principle, but if you extend the equation further
> > it
> > doesn't work any longer.
>
>
> Why not?  Why not charge a flat rate instead of a percentage of  the pay?
> Isn't that a more logical way to tax someone for finding an employer?
>
> Now, if you were assisting in project management, reviewing code of your
> employee, etc, it might make a little more sense.  But you're not.
>
> dw
>
>
>
Good points.  Sometimes agencies do charge a flat rate.  In fact, it's
easier for me to do it that way in most-respects, though all companies are
setup a little differently.  For me, it all depends on what the client company
wants to do.

I do think, however, that an hourly fee is more exact and more efficient in
economic terms than a flat fee.  It's like the electric meter at your house,
minutes on your cell-phone, or a gas tax levied as pennies extra paid per
gallon of gasoline you buy.  From an economic standpoint, estimating the
value of a fee as a flat-rate is an awkward and inefficient measurement.
Who knows if a programmer will be needed for 50 hours, 1,000 hours or
5,000?  Who knows if a programmer that's hired on will milk the company
purse for a nice check and then walk out the door a few months later?
Nobody knows.  Charging a flat fee up-front surely works, but it's actually
smarter for a company to divide the fee up into hourly chunks and only pay
for what is in fact "used".

Also, Its often easier to get an $X/hr consultant fee approved through
finance than it is to get a separate consultant fee and a recruiter fee
approved, even if the total amount is exactly the same in the long-run.

Finally, project-management, code-reviews and the like are surely
value-added services that can be provided, and some shops do exactly that.
There are plenty of other value-adds though, that recruiting shops provide
that don't appear readily important.  Things like recruiting (obviously),
taxes, insurance, unemployment insurance, worker's compensation insurance,
benefits, HR consultation, mitigating co-employment risk, payroll
administration, cash-management, invoicing, collections, credit, internal IT
staff and infrastructure, other communications expenses, etc, etc... All of
those services are outsourced via the contractor agreement to the agency.
They need to be paid somehow, and a few extra dollars per hour is usually
the simplest and, I would argue, most economically efficient, way to
accomplish that.


-- 
Robert Merrill
SOS TECHNICAL
801.426.6120 (w)
801.885.0400 (c)
www.sostechnical.com

Uniting Talent with Technology ™

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