My experiences with US IT contractual hiring

The US IT contract hiring market is a real wild west, dog eat dog and a toxic wasteland. I conclude this from my first-hand experience in IT contracting. Depending on the situation sometimes I felt like a caged monkey in a performing circus but most of the times I felt like a cheap prostitute being sold by layers of pimps and this blog is a documentation of my first-hand experiences. I also sometimes likened myself to a vegetable in a farmer’s market trying to sell itself. If “Speed Dating” is the term used for full time recruitment these days then contracting market can be equated to “Speed Tinder”. This blog has been long in the making, primarily because I did not want to document experiences which I personally did not experience in the hiring process. The statements I make are completely factual, are based on real experience and have no right or wrong or any race connotations whatsoever and neither am I trying to explain why things are the way they are. This is just an objective blog of what I faced on the ground and what I felt as a result during my experiences in contractual hiring phase.  

Why I jumped into contracting from FTE is beyond the scope of this blog. I did not require any visa sponsorship to work in the United States. I advertised my resume in Dice and Monster US. I had 16 years of hard core software development experience and worked full time as a senior software architect in a company whose operating systems run on 98% of the world’s computers. I always wanted to code partly because firstly I liked it and secondly lot of people did not want to do this type of work or simply could not do it as well as I did. I also had four individual inventor US patents on the way and a substantially long list of relevant professional certifications. I was available for contracting and had assumed it to be a cakewalk into big money. Here is how it went.

1. IT Budgets across the world have plummeted. IT departments are hardly respected and have seen large scale redundancies and budget cuts across their FTEs. Focus has shifted to RUN(sweating the assets) from GROW. As a result, project budgets and contractor rates have also taken a serious hit. A contractor who in the mid 2000’s might have expected to make up to $220 to $240 an hour might be very lucky to make $120 per hour these days. Plummeting rates also have strong correlation to automation of work, hundreds of thousands of temporary (guest) workers on H1B and L1/L2 visas from system integrators who work out of the US, thousands of students on OPT (looking for an H1B) who in themselves are a major source of very cheap labor and to work that is offshored to cheaper destinations out of the US whenever possible. I also saw a lot of women spouses who started to work after their husbands reached a certain state in their permanent residency process.

2. IT contract jobs are typically the last mile jobs and I knew this very well at the onset. Most IT organizations do not face shortages of people/managers who are great orators, love to set visions, direction and evangelize. When rubber meets the road on execution of  technical work , very few FTEs step in and the majority the work is shouldered by contractors and outsourcing organizations. This also means that contract jobs do not go very high on the job ladder. Most contract jobs are for developers and few are for architects and that’s about it. Many implementation partners also sell projects knowing well that they do not have necessary skillsets within the org. They do then rely on contractors to help deliver the work.  

3. Before coming into this field I felt that some implementation partners were instrumental in driving down contract rates and that contracts directly with customers paid at a different order of magnitude. This I discovered was far from truth. American end customers when hiring direct contractors through agencies were seldom willing to pay an order of magnitude difference in rates when compared with implementation partners. I also discovered that expense paid contracts had become extinct. Even in this low rate game, best rates were paid by end customers when directly contracting ($120/hr to $100/hr), lower rates were offered by American system integrators ($110/hr-$90/hr) and lowest rates were offered by Indian system integrators ($60/hr – $85/hr) for the same role and skillset although I found many exceptions to this generalization. But overall the whole market appeared to be a very depressed and low rate game.

4. Most work still entailed being physically present in the office and the expectation for the contractor was to relocate to the customer site at his own cost. Given the long experience levels asked in the job descriptions I wondered how a person of that age (given the required experience) would manage to uproot himself and his family every 6 months to a year and move to a different state, family in tow. Moving costs, apartment lease costs, furniture, insurance etc are costs that would all need to be paid by the contractor. Having said that I was also solicited for roles which 100% remote were requiring no relocation but these were far and few in between.

5. Everything was not what it seemed in the contract market. Just because one got a call from the first line recruiter did not in any way mean that one would land the job or that there even a exists  a job for one to land into. In many cases I discovered that the solicitation or job advertisement was just a “Resume Collection” exercise as one recruiter sheepishly admitted. Resume collection roles were deliberately advertised with a 30% premium rate ($150/hr) just to attract potential contract seekers and encourage them to send their resumes so that the recruiter could quickly build a database.  Recruiters and customers frequently claimed that projects would start in a weeks’ time and subsequently not get back for many weeks or even months. I have had vendors call me in May and say "we submitted your resume in February and we have the customer come back and ask us now if you are still available". In time I discovered that promises, claims, start date and budget confirmations from recruiters, IT partners and even customers had little to no credibility in the world of IT contracting.

6. Continuing on the premise of unpredictability and situational fluidity, vendors, implementation partners and even customers  in reality  had very little idea of what the contract is actually worth and how long it would last but this did not prevent them from making tall grandiose claims of the "potential" of the contract being multiyear multi hundred million dollar just to keep the strong candidate in play. The "potential" multiyear possibility was specifically used frequently to negotiate lower rates at start. In fact, when it comes to legal paperwork I found that all customers kept contract duration of 3 to 6 months at a maximum with option of renewals with multiple caveats of contractor performance, project requirements and budget. But this did not not stop vendors and implementation partners from emphasizing the potential long length of the contract (“long term” contracts) with an intent to drive the rate down. In one instance a vendor sold me a 12 month contract with a major oil and gas company in Houston. The customer’s hiring manager however said during the interview that he had no more than 4 months of budget visibility for the role.  The vendor when informed of this disclosure said he would get back to me on why there was a discrepancy(12 Months vs 4 Months ). I am still waiting to hear from them. On another occasion, I was asked to work through the weekend to close on the paperwork (which I did) for what was sold to me as a $425 million, 5 year project in Dallas TX for a major Dallas headquartered airline company, only to be told on Tuesday that the role was on hold indefinitely because of a management decision. Post this the vendor did not return my calls when I reached out. Thankfully I had not declined another good contract and had good sense to hold on that till this one had materialized.  Post this and many such smaller incidents, I did not vent, but started to pay very little heed to these tall claims and took the grandiose visions and contract length claims that were narrated to me by vendors and customers with a lots of grains of salt.  

7. I learnt not to expect to get the job just because I was a great fit skill wise and very good at what I did. In what appeared to be a well-oiled machine there were internal connections, rate margins and rate commissions that changed hands and one did not get the job just because they were the best. To my surprise, in this world “Cheap” + “OK” always triumphed when competing with “Expensive” + “Great”. Hunting for great guys at cheap prices seemed to the art that everyone was trying to master here.

8. Out of the so called 1000 or so calls I received from contracting role recruiters only 2% were from Americans. The overwhelming majority of solicitations were from Indian recruiters most of whom were physically located in India and used IP telephony devices like Vonage or MagicJack.  I could easily identify Indian accents and names and in many cases these recruiters themselves stated that they were in Indian cities of Gurgaon and Hyderabad and were working the night shift. I did not receive calls from very many other nationalities or countries. Many recruiters whom I interacted with struggled to frame simple English sentences and had severe grammar and pronunciation inconsistencies. Most of them used simple fake christian first names like John and Mark with equally built up western surnames.I also spoke to 100’s of “Raj”’s which is a common Indian name, albeit in the Bollywood movies. Gender wise there were a lot of women who called and I could hear babies wailing in the background indicating that they may have been stay at home spouses. I documented one such call to show the type of folks whom one can expect to interact with regularly(he even gets my name completely wrong). https://drive.google.com/open?id=0B2GyLVKfgVRqRWdnWFRmNnA3ekE

9. I did not notice too many multi-vendor situations. In most cases the recruiter claimed to have a direct connection with the end customer or the implementation partner. There were a couple of cases where the recruiter openly disclosed at the outset that they were working through another vendor, but these were far and few in between. However some vendors tried to sell the job based on who the end customer was. For example I was sold jobs where I was told that T-Mobile or Boeing was the “end client” but the details of the middle tier(the system integrator) was with whom I would actually be signing the contract was conveniently withheld at the initial stages.

10. Recruiters first sent an e-mail with the job description and called immediately thereafter which I will admit was a convenience. The overwhelming number of recruiters appeared to read from a defined script in an attempted American accent which went like. “Hi I am a Mike from XYZ systems. How are you doing? Are you looking for a job? I have a XYZ job in location ABC …. “.The hum of a call center in the background was distinctly audible. It seemed more like an industrial resume to role matching machine. After going through these conversations for a while , exchanging and responding with the same enthusiasm to these little English greeting expressions started to feel fake and burdensome. Initially I had felt that it was very unnatural for an Indian to speak like this, that too so many people consistently speaking this way at the same time.  I later discovered that the few American recruiters whom I had interacted with, greeted and started conversations in the same way and perhaps this was the reason that the Indian recruiters chose to speak this way.

11. I have tried to create a dialogue out of the interaction for the readers. I can attest that almost all conversations went or more or less the same way. However , the quality of the recruiter’s English varied greatly from conversation to conversation.

The Introduction Phase

Recruiter: Hi I am John calling from ABC corp. How are you doing?

Me: I am doing good. (When tired / fed up I also said just “good” or nothing at all )

Recruiter: Are you looking for a job?

Me: What do you have?

Recruiter: I have a MNO role at Place ABC and have already sent you the job description?

Me: Ok what’s the rate ?

Recruiter: What rate are you expecting?

Me: For my profile and expertise $X would be appropriate. What rate are the offering?

The Haggle phase   

Recruiter: Oh.! (Could hear a brief gasp for air or a sudden stoic silence)… what your best rate? ("Best Rate" in IT contracting world colloquialism is another word for cheapest that you can work for)

Me: Well, least rate would be ($X - $10) / hr.

Recruiter: Would you work at ($X-35)/hr ? This is a X year(stresses the long duration) contract.

Me: Can you come to at least some to ($X - $15) / hr.

Recruiter: Ok, Let me check with my manager and get back to you.

The Manager Phase

I noticed the manager involvement in all conversations where the recruiter would reach out to a manager and then come back to a rate. The manager in most cases was another Indian guy or girl but with much better English conversational skills. It also appeared to me that these chaps were physically located in the US.

12. I understood that resume keywords were the way hiring happens at least in the first 2 filters. This was so important that even an obvious lion would need to have key words like “stalk”, “hunt” ,”zebra” and  “growl” in his resume to be selected into a “Lion Pride” project. In most cases the recruiter, his manager, Implementation partner or the customer had no clue of the technology, when it was launched and how it is implemented or when and what value the contractor brought in his experience. On multiple occasions I was told they did not find enough keywords in my resume and I was asked to create or generate more keywords which would be discoverable using the shortcut ‘Cntrl+F” in Microsoft Word.

13. On many occasions I had to verbally or textually quantify my experience in years in each of the required sections that was present in the job description. This was always a mechanical exercise with the recruiter’s manager who paid absolutely  no heed on when the technology was launched, how much is  it really needed and used in projects. I was asked to quantify the number of “years” I had worked in otherwise “hot” technologies which I knew to generally available only within the last couple of months.

14. Every dollar I made went through a long list of middlemen before it reached me and I must disclose that I was fully aware of this arrangement before I entered this form of work. In many cases around 20 to 30 cents or more of every dollar I made at source was siphoned away by middlemen. The call from the first line recruiter in all cases led to a long list of people whom I needed to speak to. I have tried to elucidate the list here for the readers. Also, shown below is the way $120 arithmetically reduces. If the customer pays $120 that is (most do not). While the customer expects work of $120/hr the consultant gets paid $76/hr and is expected to deliver work worth > $120/hr. All this is before taxes. The below flow is only representative and I personally did not face such a severe pay chain and was paid pretty decently. All numbers are per hour. Shorter chains resulted in more money reaching the consultant. The act of siphoning ones pay away felt like parasitism. Customer(120)→ Implementation Partner(120-20 = 100)($120/hr) → Preferred Vendor(100-5 = $95) → Recruiter’s Manger → Call center recruiter → Consultant’s Employer(20% of $95 = $76) → Consultant’s Share($76)
15. Timing of the payment was another matter of concern. I learned that there are certain payment terms like Net30 , Net60 which meant that payment would be made 30 days post the work was "invoiced" (not performed) . This meant that if the work was performed from April 1 to April 30th was invoiced on May 10th , the payment would happen on June 10th for Net30 and July 10th for Net60 terms to the employer. Add to that, travel expenses incurred on behalf of the customer were expensed in a similar way but with the added burden of receipt submission to the mid tier vendors. I was educated that this was done to protect cash flows of the mid tier vendors and that they could only pay after they had received the inward cash from the end customer. I had to meticulously track every hour worked and every dollar owned and rarely did anyone reach out to me pleasantly reminding me of a payment I was expected to receive. It was always me following up for payment status and getting "we were sending it today as we speak" type of answers. Overall I felt that no one showed any urgency or discipline in compensating the contractor for due services that were rendered. It was absolutely OK if I had slipped on calculations on my due payment in which case it would never be paid.

15. The fakery problem was mentioned to me many times and I was educated by recruiters that majority of the resumes they receive are not genuine. Efforts were made by organizations to validate my credentials rigorously even after I had provided enough details voluntarily in my resume to endorse and allow verification of my genuine experience. During initial conversations customers quickly realized the authentic nature of my claims and refrained from pestering me much thereafter on this topic. Many customers insisted that they wanted to conduct face two face interviews to prevent fraudulent candidates but they did not want to reimburse me for my travel and logistics which I found was unfair. Face to face interviews in the contractual works happens on the interviewee’s dime as I soon discovered.

16. I did not know that there existed agencies who interviewed consultants for a price. All you needed to give them was a list of skills and they would ask you a set of questions on those skills from their database. I went through a couple of these interviews paid for by customers (thankfully so 😊) and they sounded like a telemarketer on the phone asking survey questions. Even if you have spoken to them for 20 minutes about Azure and Cloud in a previous question, they would ask you in the next question, “Have you ever worked on Azure? “. Also , if you told them you have not worked on Amazon Cloud formation , they would still ask you 10 questions on Amazon Cloud formation. There was a human doing her job but her voice was robotic, creepy to the point of being scary. During the interview my mind raced to certain scenes from the movie “Elysium” which starred Matt Damon.

18. A single role released by a customer typically generated lot of telephone traffic from scores of distinct vendors for the same one role. It was as if hungry zombies from all directions were migrating towards fresh human flesh. I got upwards of 50 solicitations on some days from different vendors for the same role released by the one customer. They all offered me marginally different rates and each claimed to have the “preferred vendor” status with the customer or the implementation partner. They all wanted me to contract through them. This seemed like a dog eat dog scenario.  

19. After I was on a contract I got many calls from the vendor company in what initially felt like a pretext to checking on my personal well being and to see if everything was going well. The person calling me used a generic US name and on asking further gave me a common generic first Indian name. I was’nt sure if it was his real Indian name.  Based on his questioning pattern and help that he said he could provide I quickly realized that this was just a ploy to get more contacts within the customer organization I was working in in order to to sell more people and in reality had little to do to with checking on me. The person who called me wanted to know phone numbers and e-mails of people whom I was reporting too in my contract and the names and contacts of key people from the HR organization. I did not provide any such details to them and protected the privacy of the end customer.
20. I worked for a certain customer manager who I discovered was overzealous in learning solutions and technologies themselves . This I attributed to firstly retaining their jobs and secondly growing in their own IT organizations. My role in this project was simply reduced to providing guidance and delivering the difficult pieces of software whereas the customer manager appeared to deliver similar pieces and then take credit for the accomplishments thereafter. Consulting and contracting was anyways a thankless job and I did not take such behavior to heart.
21. After spending some almost a long grueling year in the IT contracting industry, I'd had enough. I looked for a great full time position and went back into full time roles . I also promptly disabled and hidden all my resumes from most job portals. Unfortunately I still get scores of calls every day from contracting vendors who had saved my resume and number on their internal databases and I still have the arduous task of cleaning my personal mailbox daily which is filled with tens of of solicitations for IT contracts. My IT contracting experience was a huge disillusionment and left a very bitter taste in my mouth. It also taught me how difficult life can be for people who do this with the added uncertainty of continuing employment on a work visa. I understood that expertise, experience and knowledge all taper off at a certain point when it comes to IT contracts and nothing really matters. You are but a warm body expected to deliver on certain difficult technical asks for a lowest remuneration and once you are finished you are once again a nobody.