Is it better to hire good programmers or cheap programmers

Good Programmers

The article on Good Programmers is from Aussie contractor site www.Brainbox.com.au

Programmer Productivity

There’s an interesting take on programmer productivity at Joel on Software at the moment.

Joel looks at the perennial question of whether it’s better to hire good programmers or cheap programmers.

Many of us think the answer is obviously the former, but management almost constantly opts for the latter, which means they must disagree. Joel certainly does.

Best Programmers

He founded his company on the idea that hiring the best programmers is the best recipe for profit in software.

“So, why isn’t there room in the software industry for a low cost provider, someone who uses the cheapest programmers available?” Joel asks. “(Remind me to ask Quark how that whole fire-everybody-and-hire-low-cost-replacements plan is working).

Here’s why: duplication of software is free. That means that the cost of programmers is spread out over all the copies of the software you sell.

With software, you can improve quality without adding to the incremental cost of each unit sold. Essentially, design adds value faster than it adds cost.

Or, roughly speaking, if you try to skimp on programmers, you’ll make crappy software, and you won’t even save that much money.”

Computer Science Students

He looks at some data collected about computer science students’ programming assignments to see what kind of variation he can discover in productivity.

He found that out of the top 25% of students in assessment, the fastest programmers achieved the task in an average of only 6 hours; compared to 20.49 hours for the average and a whopping 77 hours for the slowest.

That’s a hell of a difference in productivity.

But Joel sees an even bigger advantage to using good programmers than mere saved hours.

Mediocre Programmers

“The real trouble with using a lot of mediocre programmers instead of a couple of good programmers is that no matter how long they work, they never produce something as good as what the great programmers can produce,” he says.

“Five Antonio Salieris won’t produce Mozart’s Requiem.

Ever.

Not if they work for 100 years.”

Internal Software

On one point he makes, I disagree with him, however.

He says his theory only holds true for software companies or “internal, in-house software is rarely important enough to justify hiring rock stars”.

Take the example of internal software at a large bank with a few million customers.

This bank is dealing with millions of small tasks every day – administration, processing transactions, verifying cheques, paying staff etc.

The main aim of internal software is to make these transactions more efficient.

That says to me that better software – meaning more productive software for the end user – could save a lot of money.

Better Software

If you implement better software for verifying cheques that saves you one minute per cheque, this could add up to millions of dollars in increased productivity.

If internal software is used to increase productivity, it makes sense to do it well. The pay off could be huge.

The same holds true for external software such as a company website used by customers.

If your website brings in thousands more customers than your competitors, that small extra up-front cost makes it worthwhile.

Of course, most bosses don’t understand this concept.

They see programmers as relatively interchangeable.

They couldn’t be more wrong.

Good programmers are much more productive than average programmers.

How to make heaps more money as an IT Project Manager

IT Project Manager: Charging for Performance Can Increase Your Profits

You’re a stellar IT project manager, yet you’re only making an average wage.

Well, it’s about time you make more.

This article digs outlines my approach to a performance-based fee structure. It won’t work for all clients, but for those it does work for you’ll see your profits soar.
So how can you make more money?

Simple: Structure a good deal, have a magic formula for success, take control, and use good project management software.

STRUCTURE A GOOD DEAL UP FRONT

At all times, businesses measure return on investment (ROI) for major spending. For example, company management may ask, if we hire an IT project manager for a 6-month contract and pay them $50,000, will we get $100,000 value back. This is where your ability to take risks comes in. I call it the entrepreneurial model.

Here’s how it works. Next time you interview for an IT project managemer gig with a company you trust to make great use of your project work, don’t settle for a flat fee rate.

Instead, tell the prospective employer that you are going to make a certain amount of money for them on this project and that you want a piece of the ROI pie.

Set the deal up this way from the get-go and the higher the ROI, the more money you will make when all is said and done.

This way you have a vested interest in seeing to it that the client makes a huge return.

Although most people do not operate under this kind of model out of fear of missing a mortgage or a car payment, it is by far the most effective way I know for an IT project manager to make the most money on a job.

Sure, a flat fee is safe, guaranteed, but it’s not going to yield the kind of money you really want to make. So the next project, take the risk and reap the reward!

DETERMINE YOUR MAGIC FORMULA TO SUCCESS

In conjunction to structuring a project-performance deal up front, you need to clearly state where the return is going to come from.

What are the metrics you’re going to use to measure this ROI?

Success has a number. Make sure that your key metric ties directly to the prosperity your clients reap from your work.

Your magic metric is what will yield the ROI, which in the end will yield higher returns for you.

It will also serve to gain you more confidence from your employer.

If they see a formula that works, they’re more willing to give you all the control on the project as you need, as well as agree to your cut of the ROI pie.

TAKE CONTROL

When I was in the business of being an IT project manager for companies, I kept the schedule under my direct control.

This does not mean, however, that I would necessarily do any of the extra work.

I controlled and directed others by assigning tasks to people with the right skill sets.

When you have guaranteed authority and control, you will be able to successfully manage and control your project and deliver on your set success metrics.

USE GOOD SOFTWARE

If you need help, get a good project management program.

The best program is one that can help you plan all kinds of projects from small to large-scale deployments.

I also recommend one that seamlessly integrates with Microsoft Office, and task-manager Outlook.

I dumped IT Contracting after 10 years & made Million in a Year

Dumped IT Contracting

This was posted by a reader after our recent article Ten Reasons Why You Won’t Get Rich IT Contracting by reader Ex Con. It’s how he made a million quid in a year after he dumped IT Contracting.

I thought it was worth a wider audience.

No Security in IT Contracting

This article echoes my own thoughts on contracting and wealth. I’ll tell you why I dumped IT Contracting.

I could never quite accept that after almost 10 years of contracting, I still had no security and could go from earning £500 a day to zero with only 2 weeks notice.

The money was good, but I could never really live to my means as I was always saving for the next downturn.

Development Skills

I dumped IT Contracting about 8 months ago to use my development skills to start a new business.

I knew if this business failed there would be a real possibility that I would find it very hard to get another contract.

8 months without an IT contract is a lifetime in the eyes of a lot of agents.

Million Pounds in a Year

Well things have gone well, really well in fact and I’m on target to make (almost) one million pounds profit this year since I dumped IT Contracting.

That makes the company worth somewhere between £10m and £20m.

I owe a lot of this to contracting.

If I were a permie, I don’t think I would or could have ever started this new business.

IT Contractor Comment

I did the same as you Ex Con. After many years in IT Contracting I never had any real money.

I decided to set up ITContractor.com (or NamesFacesPlaces.com as it was).

The reason I did it was to have something of value I could sell after I was no longer working for it. It would be my pension if you like.

I haven’t made anything as much as you have but I do make as much as a good IT contractor.

Own Boss

I’ve now got my own business, I’m my own boss, I can do it in my own time and I have something of saleable value rather than just a limited company that is just worth the cash that’s in the account rather than a multiple of profits.

I’m very glad I dumped IT Contracting.

I could be stuck in some office somewhere chasing a deliberately too tight deadline.

Instead I’m going to have a walk along the shore of the lough now and when I come back I’ll do my Su Doku puzzle in The Times before writing and loading up my next article at about 1:30pm.

Working Away From Home | How to live more luxuriously

Working Away From Home

A lot of IT contractors tend to slum it a bit when they are working away from home, renting flats where they have to do all the cooking and cleaning or living in low quality accommodation.

They don’t want to add too much to their costs, as they have to pick up the tab themselves.

Often this isn’t necessary and contractors could live in far more comfort when working away from home at prices not much more than they would pay for a flat or B&B – and it might even be similar or less.

Good Deals

Often you can get very good deals from local hotels if you are going to be living there for an extended period of time. There’s nothing like having recurrent income for businesses.

It might be an idea to try and do a deal with a local hotel. Often they’ll give a big discount on their normal rates for someone who is going to provide them with recurrent income for an extended period of time.

You need to speak to the manager at the hotel though rather than one of those at the desk, so you would be better to call up.

Because of the recent downturn they might just bite off your hand with a decent offer.

Local Hotel

Another thing to try is to contact the firm you are joining and ask them if they have a deal with a local hotel.

Some companies have a cheap deal with local hotels where they put visitors up, especially if they are able to guide quite a few people to them. The hotel might even do you a better deal than that if you are bulk purchasing.

Yet another approach to this is to talk to a local travel agency to find out if they have any cheap deals at local hotels and whether they can negotiate an even better rate for someone who is going to be staying there 4 nights a week for an extended period of time.

You might get the chance to stay in a decent hotel for 4 nights a week rather than having to try to rent a place for the whole week or having to live in some cramped and uncomfortable bed and breakfast.

That’s OK if you get on with the B&B landlord and / or landlady, but you might prefer a more impersonal relationship that you would get in a decent hotel when working away from home.

Living and Working Away from Home

It really makes living and working away from home so much easier if you are living in some decent place with a good breakfast in the morning and a decent bar – and you don’t have to worry about any cleaning, washing up etc.

It also makes it easier to talk your partner, if you have one, into coming up to spend the occasional night there.

The last thing you want, when you have had to take a contract away from home, and away from friends and family, is to live in some awful hole when you could have got something far more comfortable and even luxurious which softens the blow a little.

I did well at an IT interview. Should I cut out the agency?

This question was posed by one of our readers who asks if he should cut out the agency.

Cut Out the Agency

Recently an agent (whom I have never had work from before) sent me on an interview.

The agent called me this morning to say that the project was not looking good. The client likes me, but the cost is a problem.

Should I call the client and offer to go direct to cut out the agency? Through the agency nothing will happen, so I am not doing the agent out of any money

ITContractor Comments

What you are talking about is a high risk strategy if you try to cutout the agency. For instance it is possible that companies only take contractors through agencies.

It is also possible this particular agency is on the Preferred Supplier list. It is even possible that this agency is the sole supplier.

If any of these are the case then you are pretty certain to lose the job opportunity if you take the action that you suggest, i.e. phoning up the client and cutting out the agency.

Direct Contractors

It would only work if the company takes direct contractors – which most companies don’t do.

It could be that the agency are genuine in what they say, i.e. that the money is too much for the client. It does often happen, especially nowadays, that clients have a new perception of what they want to pay.

It could also be the case that the agent is trying to cut down your rate, either to make sure of the business or to increase their cut.

Depends on Situation

A lot depends on your particular situation if you try to cut out the agency. If you have other irons in the fire, but you particularly like this job, then you might think that it was worth giving it a shot.

Also, if you have a skill that is in shortage and you are confident of being able to get something else at the rates that you would like, then it also might be worth giving it a shot.

My instincts would be to try to find some sort of compromise solution on the rate. It looks as if the rate is the only sticking point as far as you being back in work is concerned.

High Risk Strategy

If you really did want to go ahead with your high risk strategy and cut out the agency, it might be worth your while to get a friend to phone up the client and find out some details, i.e. if they take contractors direct, if they have a Preferred Supplier List, what agencies are on it etc. before you take the leap into the dark.

I would tend to say that you need to bring this to a conclusion with your agency one way or another before you try other routes. Perhaps you could give them a deadline.

Job Gone

If the agency tells you that the job has gone, then you are then free to pursue other routes, either by trying to go direct or by finding another agency who takes less of a cut.

You would be free then to phone the client to say that your agency has told you that the job is gone because of cost and you were wondering whether there was another way around this.

The final advice I would give you, though, would be not to take too many risks in this market of ending out of work for any length of time.

How I was guilty of ageism in hiring IT contractors

This article about ageism in IT was sent by a reader.

Ageism in IT

I think a useful article/topic would be ageism in IT contracting.

I have always thought that IT contracting is very discriminatory against older contractors.

Indeed, I am guilty of it myself – when I have had to recruit other contractors for projects. I have occasionally received CVs from older (40+) contractors who offer a lot of experience at a cheaper rate than the 20-somethings.

I have always gone for the latter, maybe because of the idea they “would make better fit with the team” excuse or just the belief that younger = more technically able.

IT Contracting

The perception I have is that IT contracting in the UK pretty much ends at 40 unless you can get into senior board level or upper management level consultancy roles.

As always in every field, it’s not how good you are that counts, it’s how good you are in relation to your competition.

So I am thinking of getting a CV boost by accepting a permanent role (incidentally from the client who is currently messing me about with this train the accountant nonsense).

The role would be to create and head a Profitability Systems functional area.

The client is a big telco with a £12bn turnover so there would be lots of room for advancement.

Permie Salary

I am 33 and am thinking about making provision for the future should the gravy train end when I get older.

On the other hand, I’d have to take a pay cut down to a 70k permie salary.

ITContractor Comment on Ageism in IT

I’ve found it the other way around. If there is ageism in IT, I would say that ageism is with permanent roles. Clients are not to bothered what age IT Contractors are because they are not there for the long term.

What does it matter if an IT Contractor is 62 if he, or she, can do the ob and is only there for 3-6 months?

I am too old so I will have to become an IT Contractor

Too Old

This was by a reader in reply to our article ‘If you are good you will get work’.

Looking for Work

As a redundant IT Support Analyst and experienced IT Technician / Manager, I have been looking for work within the IT sector too, but at 53 years of age no-one and I repeat no-one wants you. You are too old.

I have tried diversifying as I am a qualified post 16 teacher and a trained technical author. I have also tried to get jobs within my area of experience and skills sets, which I acquired during my RAF Service career.

People will tell you oh I don’t think it’s because you are over 50 Mr XXXX it’s just there’s no work.

Well I can only say ‘Huge buckets of goose fat to that!’.

Forced to Become a Contractor

Now I am forced to try self employment as a Contractor and read all the hideous accounts of clients who would shaft you as soon as look at you. I am now too old for a permie role.

Plus to get into the game you need experience as well as qualifications.

I have probably forgotten more technical knowledge than most of the youngsters in the game at present, and I am constantly trying to keep my academic knowledge up-to-date as well.

Will this all be just so much sweat and effort for nothing? Am I just too old?

Cheating and Lying

Perhaps if I took up a career as a liar and a cheat I could rip people off like so many of the brass necked dishonourable gits I’ve met in the last few years.

Oh yes this brings me to the point of this little bit of pros.

What ever happened to honour truth and integrity?

Many people these days disregard the fact that if you sow a wind you will reap a whirlwind. And there are far too many dishonourable unscrupulous gits who get away with crimes and then make money from it.

Regards to the editor Chillo.

How I select IT Contractor candidates for Interview by IT Client

Contractor Candidates

This article about selecting contractor candidates was posted by m@t In reply to one of our articles.

Skill List

For IT Contracts I just want to see the skill list.

If it seems suitable, I’ll look closer.

I know it’s a contract role, so I don’t mind seeing skills on the list that aren’t relevant, as long as the ones that are relevant are listed.

For permie roles, then the CV must be customised to show me that you do match what I’m looking for. Making your CV stand out in any way makes you a more interesting prospect.

Selection Process for Contractor Candidates

I only use a few agencies.

If I receive a CV twice, from agencies on my approved list, then whoever got it to me first is the agency I deal with.

If I receive a CV from an agency unsolicited, it doesn’t get read.

So I think it makes sense to get your CV out to a good number of agencies.

And don’t send me anything longer than 3 pages. I get bored easily.

Unsolicited CVs from individuals will be examined, but only if I have a current requirement.

Otherwise they are unread.

cheers

m@t

ITContractor Comment

This article from a reader about how he selects contractor candidates for interview is very interesting information for IT Contractors. It’s always useful to get an insight into how clients select contractor candidates for interview.

Of course different clients may use different methods for selecting candidates, so one must be careful how much one reads into the comments of just one client.

It can be added to other information that you have.

Have you ever asked at interview how they selected the contractor candidates for interview?

If you did that at every interview you could build up quite a good picture that could be worth tens of thousands of pounds to you in the future.

I’m sure that the interviewers would be quite happy to tell you.

They do like to talk, don’t they.

Backstabbing Permies | I’m sick to death of them says Contractor

by Kiwi Chick.

Backstabbing Permies

I have been the victim of backstabbing permies who were consumed with jealousy over
a) my ability and skills, and
b) my remuneration.

I am sick to death of backstabbing permies sitting in their cushy little jobs, doing nothing all day except complaining about IT contractors and doing everything they can to discredit them.

Reasons for Higher Pay

As far as the money goes, IT contractors are paid a higher face value wage because they do not have the stability of permanent work nor the enormous perks that go along with it.

Permies get stable jobs, free training, benefits such as pensions, company cars, health policies, gyms etc, paid holidays and sick pay, and a low tax rate.

A contractor has to provide all of these things for him/herself and also has to pay twice the amount of tax.

So when you look at the bigger picture, and take all of these things into account, it probably averages out to be roughly the same in the end.

Backstabbing Permies – ITContractor Comment

The stupidity of some permies has always astonished me. They pay vast sums of money (as they see) to IT Contractors – and then spend much of their time de-motivating them.

Surely, the last thing you would want to do if you are splashing out loads of money is to de-motivate the person earning it.

That is surely counterproductive. However, that is what many backstabbing permies do – even those who hired the IT contractors in the first place.

I’ve seen this happen lots of times in lots of places. In fact, it is almost de riguer.

At places where they are used to hiring IT Contractors it is not so much of a problem. It is in places where they are less used to IT Contractors that the problem mainly happens.

I remember going to one place where I was told, on the first day, that I was the first IT Contractor they had ever hired.

They expected me to be the guru of all gurus “on the money you’re on”.

It was impossible to live up to this.

However, it didn’t stop backstabbing permies constantly sniping all the time. I served my three months there and went.

I almost lost IT Contract | IT Contractor

Almost Lost IT Contract – From a Reader

I have been in the position where I was going for an IT contract and the company phoned me direct to ask why I kept trying to push my rate up or I would not take the contract.

I explained that this wasn’t my doing, but the agents. I told the company the rate I wanted and let them fight out the agents margin.

They later told me that had this not happened they would have given up with hiring me as they were tired with the agents constant bartering. It would have been a lost IT contract for me – and  would have known nothing about it.I would have been blissfully unaware of it.

Absolutely Ridiculous Margin

As it happens, the agents margin was absolutely ridiculous and once the company was in a winning position they nobbled them down!

My relationship with the company flourished, I stayed 2 1/2 years and even had my IT contract renewed when they had a 10% headcount reduction worldwide.

At the end of the day agents are salesmen, and would rather see their grandmother fed to the ravenous bugblatter beast of traal rather than lose out on getting more bucks!

ITContractor Comment

I wonder how many of us have had a  lost IT Contract for reasons that we knew nothing about. I would be willing to bet that I have lost more than one through nefarious dealings by agencies.

The greed of this agent nearly cost this IT Contractor a perfectly good contract at a site where he spent the next 2.5 years.

It could so easily have been a lost IT Contract for him and he would never have been any the wiser.

It’s a shame that,legally, agencies don’t have t reveal their margin. If they did, this would put a stop to all of this.

Indeed, I can’t think of any good reason why keeping their margins private is good for the industry. It’s certainly not good for IT Contractors and IT clients.