Transparency
After all of these years I’m still mystified that contracted engineers do not know what their hourly bill rate is. They’re of course aware of what they make per hour, since that’s usually part of the first conversation (“what’s it pay?”). And of course there are plenty of other items with regards to compensation such as expenses. vacation, benefits, etc. But more often than not, when I ask a contract process control programmer what his or her client is paying each hour for their presence, there’s a mumbled silence. They simply don’t know.
At Insight, we’ve prided ourselves for the past twenty years in making sure that every one of our associates KNOWS what my client is being billed at for their work. There’s no real need to be mysterious about it. It’s math. Further, the talented associates I provide on an interim basis are every bit as good at math as I am (this is why I choose to work with these people). There’s no secret with regards to what Federal, State or local income taxes are. In mentioning workers’ compensation, liability insurance, unemployment taxes, no one has ever asked me “what’s that?” When I explain what the difference between what they will receive per hour, and what I am going to bill the client they’ll be working with, I’ve never had someone not comprehend where the money comes from and goes to. More, in all of these years, I’ve actually never had anyone resent what Insight gets to keep over and above employment costs (gross profit). It’s 10%. Same as it was in 1993 when we incorporated. I can’t remember needing to explain where that goes, but if I have, it’s always been pretty simple too: general expenses such as corporate taxes, lights, and cost of being in business. Everyone “gets” that. I guess it’s just the way we do business around here.
So, if you’re working on contract, and you aren’t sure what amount your expertise and labor are actually being billed at, ask! Certainly you can handle the math involved.