First, I am posting this for a friend who has never posted on Core before. I received the email from them and thought it would be good to hear what others think. So for once lets try to keep this a discussion and not a personal battle or ego trip?
Background: This is for a small but up and coming consulting firm in the South. The person who wrote this has looked over the Core Salary Survey.
"I’ll tell you, I’m really starting to feel old or disconnected or
something. We are interviewing entry level designers who all want to
start in the mid-$40s. Most of them don’t want full-time, salaried
employment. They want to be contractors. They somehow believe that
they’ll pay less in taxes that way and they want the “flexibility”
that they believe will come with contract employment. They don’t seem to
understand that Uncle Sam will extract his pound of flesh one way or
the other or that 40 hours per week on contract happens during the same
40 hours it would if you were salaried. I don’t know. It’s bizarre.
It’s like they’re not looking for a career - just something to tide
them over until they can afford to go snow-boarding for a year. As
somebody trying to run and grow a business, it’s just very unsettling.
We’ve talked with five candidates like this. One kid wanted to be
contract at $60/hr with no previous experience.
I think we are starting to see the fall-out of the kids who were in
high-school during the dot com era. They grew up believing that by 26
you weren’t successful if you weren’t making $150K."
It’s entirely possible that these recent grads don’t understand the reality of tax law when you’re a contractor, and will have to learn that the hard way. It is also possible, though, that they don’t trust employers the way older generations do, and feel that the only way to protect themselves is to keep as much control of their professional life as possible. This has been a common phenomenon among young professionals since the early 90s: remember all those “slackers” who got maligned in the media for being apathetic and lazy? Turned out they were perfectly willing, a few years later, to work 100 hour weeks building the modern internet, they were just reluctant to chuck their lot in with a large company, working their way up through the corporate ladder in hopes of acheiving success and stability. Not surprising considering how badly many of their parents got treated by their employers – cut benefits, offshoring, layoffs and forced retirements after 20+ years of service, etc.
If you look at employment trends of the past 15 years, they’ve been relentlessly toward instability, fewer benefits, temp work over regular employment, part time over full time, shareholder return over employer responsibility. To most anyone under 35, the safest option seems to be to take care of yourself: make as much money as possible when you can, get your own insurance, your own equipment and technology, train yourself, and shop around for the best gig at the moment because “full-time” employment is rarely more reliable than contract or freelance work. These kids who just don’t get it may simply be acting out of perceived self-preservation.
Now, whether that justifies asking for $60/hr straight out of school is something else. Could be they just don’t know what to ask, so they figure they’ll shoot for the moon. Could be they came from a school that perpetually reminded them how amazing they are. Could be they’re just in an enormous amount of debt and are anxious to get out (very common, that one). Could be a combination.
Worth pointing out, though, that between Baby Boomers and Gen X/Yers there’s a large shift in point of view, and very likely misperceptions on both sides of the argument.
Contractor employees still pay taxes. The only difference is they also have to pay the full social secuirty component too. They actually are out of pocket the 50% of social security the employer pays. The employer only benefits by not having worker comp insurance and unemployment taxes.
The nature of their duties would classify them as a regular employee due to supervision and job direction at the place of “employment.”
You could always tell them they can be employed under a fixed duration contract. You pay them like regular employees, and after the time period is up, (determined in advance by project requirments) they are done. No unemployment, no obligations to them at all. This is often done when specialized staff are brought in for complex or fixed duration projects last 6 mos. to a year.
Entry level staff don’t fit this description unless you have no design department and won’t need them after a certain project is finished.
It’s probably not so much of a paradigm shift as a reality check. Real world always has the last word.
I did contract work for this company last year. The only way the check could get cut out to me was to sign a verification of cititzenship…not a 1099. the amount paid was more than 600 which would allow the employer to file…but no taxes were taken out…
my concern about this situation is that for ANOTHER company I had filled out a 1099 form and I made way less than 600 total for that contract work …so I’m not sure I will be receiving a copy of the 1099 form…ALL THIS TAX talk really confuses me…but i guess although i know i can look it up on the net…i’m hoping someone in this forum will know…and be able to explain…in a much more cut throat way…without all the fancy lingo.
so basically when i do my taxes this year I would want to include the work I did for that year…because i would hate for this to catch up with me later…
so if I don’t have a copy of that first gig…that was more than 600 but i signed a citizenship verification…not a 1099…SHOULD I EVEN INCLUDE THAT??? (mind you I will contact the company …but again incase someone in this forum is more experienced…i’ll feel more ‘informed’ when I do contact this employer.
2nd. the “less than 600 dollar” gig…should I expect to include this in my taxes…if they send me a form…or basically i’m “home free” with that check…???
I hope 'm making sense…I would like to continue with this type of work until I can situate myself and find a full time position. help?
It also benifits the employer in terms of benifits. Kids don’t understand that a $30k salary can cost an employer $45k in taxes and beni’s. Sounds like these kids where just a little naive, a little backhand of real life usually cures that.
Contractors and freelancers have the benefit of deducting for business expenses that full time folks don’t which can be a big plus(for example think 30 to 50% of your rent and utilities for starters). As far as Uncle Sam extracting his pound of flesh, that all depend on how much fat your showing him. Also working on salary can also extract flesh from your bones in the form of unpaid overtime. Freelancers also have the flexibility of taking time off when business is slow. That may not be the case for in house contractors.
never experienced this. in both cities i’ve lived city planner limited my % of residential use. currently in 2 bedroom. about 1100 ft2. i’m allowed 100 ft2 for business. even tho i use more, thats all i can claim. long way from 30/50%.
comments like that make freelancing sound great. careful.
do you guys think it’s realistic for an entry junior ID to ask AND recieve 50-60k to start?
I’m not sure where in the “south” that guy is located in but, what about the big markets? big name firms in nyc, sf, chi, bos, seat, etc…
From the looks of sites such as salary.com, the median (average skilled) is around high 40’s to low 50’s. Of course everyone like to see themselves as above the large part of the bell curve average, but are there really a bunch of "industrial designer I"s really getting high 50 to mid 60’s to start? to me that seems more like average ID level II salary.
I’ve kept in touch with a “kid” I mentored, who is actively in the first fulltime gig searching phase, and when asked for advice, I didn’t know what to tell him. Things have changed a lot. I just told him to look at different job sites with surveys. haha. Honestly, I would say he’s skillsets are above average, way above work that I’ve seen stream in, I wouldn’t want him to get low balled or get laughed out for asking too much.
Take NYC, the deal there is if you want more money, cean out your desk, cause there’s 100 kids roaming NY looking for an entry level design job. No joke, my friend experienced this first hand. His salary started at $25k, in Manhattan, in 1998, with a solid economy.
I think expect the low 30’s in big markets like San Fran, LA, and NYC, I’d say mid 30’s for locations that have a harder time attracting designers. Expect a difference of a few k between consulting and corprate as well. It’s all basic supply vs demand.
From MOST of my friends that have done the freelance gig fulltime, the only way it seems to work out is if you get health insurance and 401k through a spouce or some such. Then you can make some good coin. If you have to pay for those yourself, no way are you going to come out ahead of a fulltime employee.
I do know a couple of guys who have worked the freelance thing out, but they went corporate straight out of school. built up a good network, and then went freelance.
so do you think job/survey sites are wrong when you plug in “ID level I” and get 45-55k?
what do you think a solid entry level should ask for in those markets? maybe this is more a discussion on salary nego, but it does seem relevent to the thread topic. besides the advice, i will also be hriing and going through the whole process (on this side of the table for the first time) so all this will be usefull… I’d like to get a good heads up on what the trend is.
with contract you can get more gigs and since most of it is sketching, you can just sit in a coffee shop with your laptop, sketch pad and your mp3 player cranked up!
don’t have the boss or supervisor looking over your shoulder.
can eat, sleep, take a walk, watch dvd, play dead, hell anything you can imagine.
act like you’re the CCO of some crazy internet company in silicon valley
work on a different project if you get bored with the one you start on the other.
don’t have to be worried about getting a raise because you know on your next gig you’ll demand higher specially if your products have already been on market.
can always take a project and run with it insteasd of handing it to your boss specially if you came up with the idea and want the patent. in corp or firm they make you sign a sheet that says everything you do belongs to the company (ip).
hey tim i’m not saying that your friend is that type of a boss but i don’t blame these “modern” kids. they’re looking out for themselves and looking at current circumstances where comapnies make millions and billions on just one idea it’s natural that they don’t want to miss the lotto even if it’s like one in a million chance.
i am currently a student and i have interned at two large in-house design teams at major corperations. i have been less than impressed with the designers on these staffs. not to be overly confident but i could sketch circles (or elipses) around the more “experinced” designers. i feel like some students are better design communicaters than some of the old dudes that have been in the business for fifteen years. i graduate next year and the thought of starting in the mid 30s is a little sobering.
how much leverage can an advanced skill set put on a starting figure?
so, you’ll be a highly prized sketch monkey then… so prized that you’ll be chained in the basement under a single 75 watt bulb.
any one armed gorilla with motion sickness can sketch sketches that’ll make your jaw explode. its a dime a dozen.
sketching well doesn’t mean much more than blue foam molesting well. It’s about your creative thought process, your intelligence, logic, and savvv, knowledge of and EXPERIENCE with manufacturing AND the 500 other points and details that comes with dealing with clients, vendors, employees, employers, etc. and murphy’s ass. so is being a decent human being.
you draw so well? so does the old chinese guy who draws UNFFFFINBELIEVEABLE reproductions of tupac, al pacino, leo caprio, in colored pencils at the local mall.
That skill set is elementary as speaking properly. (and spelling correctly)
That’s just not true. It is a valuable skill. Not as common as it should be.
I would recomend looking for a studio with a higher caliber talent pool to learn from vs. trying to squeaze a lot of cash out of a place that doesn’t challenge you.
I thought I was the shit out of school cause I got a job at a firm where no one could really sketch, until I got my second job at a better firm filled with designers who could rock me. You want to learn as much as possible those first few years, so you can leverage that skill with experience when it comes to getting that mid level or senior level job down the road.
I actually had a discussion about this very subject not too long ago with a series of friends from totally different fields.
We concluded that a lot of it comes down to the instant gratification that a lot the younger generations in the US have become accustomed to (me included). I’m going on twenty six now and I thought Id be making huge money by now but now I’m just happy to have a job that gives me as much freedom and benefits as it does.
When I graduated from school I thought I knew everything there was to know and when I got a job doing complicated design work on a Frank Gehry architecture project I thought I was validated. Little did I know at the time. I have been getting a constant education ever since thanks to a lot of guys with twenty plus years in the business. Incredible sketching skills are great but if you want to get paid 40,50,60K to start then you’d better have some serious connections and know how to get things done with your eyes shut and your hands tied behind your back. I know a lot of painters, illustrators, etc that can take a rough idea and sketch the shit out of it, and they’re starving for work and will be happy to take it for far less than 40K.
Just out of curiosity:
How many of you guys work in strictly consulting situations vs. companies with design and manufacturing/prototyping services? Ive mostly worked with manufacturers who could care less about sketches, they want to know how you’d actually build the thing, source materials, and manage rollouts before it ever touches an engineers desk. Ive met very few fresh-from-school designers that are truly capable of handling that challenge, those skills to me are worth 40-50K starting, anything else you can forget about it.