Contractor Math for Dumbheads (and Hiring Managers)

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I've done my fair share of hiring and firing as a Chief This and Vice President of That over the last fifteen years. Since I've taken the dive into independent consulting recently - putting me on the other side of the interview desk - I've discovered that there's a lot of hiring managers out there that just don't seem to understand the simple math of contracting.

In short, the ever-repeating story goes something like this, "Thank you for your time, but we've decided that your rates are higher than what we're looking for, so we've decided to go with another candidate," followed two or three weeks later with, "Hello, do you have time to speak again? The other candidate didn't quite work out."

So what's the math? It's quite simple. Take our fictional contractors, Dudley, the hobbyist contractor, dabbling in many technologies, master of none, and Clark, the seasoned veteran of the dot-com bubble who spent the last decade specializing in the particular technology you're using. Dudley, for some inexplicable reason that doesn't seem to concern the hiring manager, has had several jobs over the last nine months, but he only charges $50 an hour. Clark, whose resume lists all of three companies over the last decade, including publications in trade journals, charges a whopping $90 an hour, nearly twice Dudley's rate.

Of course the logical choice is cheap Dudley, right? Bzzt. Project X is pitched to both candidates and they both come back with a one-week estimate. For the sake of our hypothetical scenario, both candidates tackle the project independently. Dudley was a little off on his estimate, and it actually took him two weeks. Cut him some slack; he just started reading the O'Reilly book before the first interview, and he had to start over once because he lost all his work to a hard-drive crash. What's version control? Clark, of course, delivers on time.

This brings us to the first part of the math. Dudley took 80 hours at $50 an hour for a cost of $4000. Clark took 40 hours at $90 an hour for a cost of $3600. Ooh boy look at those savings, right? Yeah, Clark's value is evident in the invoice cost, but the real value is even deeper.

Dudley's inexperience has lead him to write some brittle code. How brittle? We don't really know because he was pressed for time and didn't bother writing tests. Ah, and don't lose any sleep over the fact that the his version works fine on his laptop but not on your servers. Something must be wrong with your hosting provider. If you extend his contract for another couple weeks, he'll figure it all out for you.

Clark, on the other hand, has provided a system with a comprehensive suite of tests, and an automated deployment script. How quaint. As an added bonus, he's also developed a clean object model which will make future enhancements and integration relatively painless; it's the gift that keeps on giving.

In the bigger picture, by going with Dudley you've paid more money for a far worse system. You'll be paying the technical debt for a long time to come. Don't make your hiring decision based solely on rates. Look at the candidate's job history. Can they hold a job? Do they have repeat/long-term clients? Look at their technology portfolio. Are they "experts" in what you need, or do they dabble in whatever happens to be shiny right now? And don't be afraid to pick up the phone and call references. Former employers will rarely say anything bad about a hire, for legal cover-your-ass reasons, but if they liked the candidate, they'll usually praise them and their work.