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Hiring (Again)

Maybe I am extremly nit-picky, but I would really like to hear other peoples' thoughts on this (whining ahead).

I am a self-employed developer in Europe and despite the current situation, I have more than enough to do. Being a coder by heart, I do have troubles motivating people, because I think interesting projects and good pay would suffice. In the past I hired other self-employed developers to outsource some work and most of them would be doing, what contractors are expected to do: overcharge, pretending to have skills they do not have and so on.

Now I thought about getting some permanent staff. I do expect a lot, but the pay is very good, the environment is casual and I like to think one can get along with me quite easily. After digging through a lot of resumes, I found one person that has been unemployed for more than 15 months, but has worked on some bigger projects.

After the interview I called him and we agreed that he would be working on a three-days-per-week basis and that I would email the details.

A day later he emailed and asked, if he could work Tuesdays to Thursdays. I assume that he wants to extend the week-end. Since I do not want to rely on guesswork I replied that I am still in the planing phase and asked if there was a special reason. While waiting for an answer, I can't help wondering if this is the first thing a newly employed should ask. If I was in his shoes, I would have at least waited for the employer's offer. It just has a bad taste to it.

I do understand that I am not offering a high-class job for a top-notch company (on a three-day-basis, no less), but I guess a sophisticated developer would enjoy working with me. Maybe after having mostly bad experiences, I am excessively careful, but I am really interested in what you have to say.

Thomas - Newly born employer
Wednesday, December 18, 2002

<<
A day later he emailed and asked, if he could work Tuesdays to Thursdays.
>>
Does it really matter (to you) which days he works?  And why does asking this question matter?  Here's an example - I telecommute 90% of the time.  My boss doesn't care if I work 9-5 or 1am to 9am so long as he knows when I'm working and that he can get in touch with me during reasonable hours.  If I want to work 1am-9am does that make me lazy?  Or leave a bad taste in my boss's mouth?  Nope.  Because I perform.  If I did not perform - would it matter if I worked 9-5 or 12am-12pm?  Base your judgement on his performance - certainly not for his desire to have a longer weekend.

Having said that - if you have some business requirements that stipulate you need him to work Monday-Wednesda-Friday, that's another story. 

<<
While waiting for an answer, I can't help wondering if this is the first thing a newly employed should ask. If I was in his shoes, I would have at least waited for the employer's offer. It just has a bad taste to it.
>>

I think you are being too nitpicky - at least without knowing his reason for the request.  And even so, if he wants to extend his weekend - can you blame him?  Judge him by his performance on the job...not by some fairly irrelevant (to his skill/performance) desire.

GiorgioG
Wednesday, December 18, 2002

Yesterday I interviewed for a position that wanted me to work 4 hours per day. "It's great," they said, " you'll have half the day off!"

For me, I would rather work 3 days a week than .5 every day. I'd also rather work for 3 days in a row than M,W,F. I place value on both my time and on the way I can organize it. Having 5 day chunks of time off gives time for medium lenth trips, home maintenance projects, other side jobs, etc...

If I interviewed for your position I would definitely want to know whether it is a MWF, a Tues-Thur, or a "whenever the boss has something to do" sort of affair.

I don't know what the guy's situation is, but maybe he's just trying to setup a child care schedule or something?

NathanJ
Wednesday, December 18, 2002

Dude I don't agree with what the guy has asked but don't you think too much about yourself?

wiser
Wednesday, December 18, 2002

I don't have a problem with that question, because this sounds like a really weird situation. If I was to take a three day per week job, a big factor would be what three days I was supposed to be working. However I've never had a job where this arrangement would even make sense. what type of work are you doing?

sleepy
Wednesday, December 18, 2002

Thanks for the replies so far.

I tried to phrase the posting carefully, so people would not assume I have an overblown ego. The responses reflect pretty much what I was thinking and basically I agree with the previous answers.

I do have lot of work, but not so much to fill another full-term position. As was stated before, for the employee it is more convenient to work three large shifts than five half days, so this is what I offered to the guy.

Problem over here is, if you are hiring sombeody, you are stuck with them. And it is very difficult to get rid of an incompetent person, so the screening process has to be done very thoroughly.

I can see what this post must read like from another perspective, but this is what I was aiming for. It's more of a gut thing that makes me feel uncomfortable.

If I was not able to find work for more than a year, I would have been too busy to get my knowledge up to date for the new job to actually wonder, what's the most convenient. We are working IT, so flexibility is a big requirement anyway.

Thomas
Wednesday, December 18, 2002

what is your company web site

curiouse/know people in uk looking
Wednesday, December 18, 2002

my email

curiouse/know people in uk looking
Wednesday, December 18, 2002

I don't think his question tells anything about how good or bad he is. It's neutral. As far as waiting for an offer first, he may have thought he was being considerate to you by clearing up this issue before you made an offer so that if you required a staggered schedule and he wasn't interested then you would not have to go through the trouble of making the offer.

If I was looking for fulltime work after being unemployed and was looking at taking on a 3 day a week (part time) job I would also be concerned whether it was a block or not. Maybe he wants to do some consulting on the side. Or go to the beach. Or whatever. It sounds like there's no need to have any specific days -- he's not going to be meeting with clients or staffing the front desk or answering the phone, so this isn't an issue that should mean anything to you, which you said it doesn't - yuor'e interested whether him asking the question says anything bad about him asa candidate and I say no, probably not. Not good or bad. Neutral.

Also, you are (I assume) hiring someone who is at least as competant as you yourself are (which I hope you are) and is therefore a peer, as well as a professional, so you can just deal with his question peer-to-peer and balance his inquiry at face value against your particular requirements and needs in filling the position. On the other hand, if you were to get weird about it or come down with a heavy hand, that could be useful information for him about you! :)

Sarain H.
Wednesday, December 18, 2002

Seems he was being thoughtful.  I believe a good philosophy in general is to fail fast.  You know, if there's a problem, hear about it earlier rather than later.

By the way, I am in Cologne right now, and think that people here are not as direct as Americans.  I understand the guy sounds a little presumptuous, but I think this is possibly a good quality.

You're right to stay careful, and it's harder to fire someone here.  Maybe you can pay him per hour until you mutually decide to work more traditionally?

Tj
Wednesday, December 18, 2002

I would never do anything against my gut feeling unless I had a very good reason.

Scot
Wednesday, December 18, 2002

Tj,

As a side note, if you want to experience direct, you should spend some time in the Netherlands :-)

Practical Geezer
Thursday, December 19, 2002

It sounds like that you don't really want to employ anyone at all.  If this is in the UK, and it sounds like it, then you'll have to find Employer's NI, withold tax, which comes out of the cashflow anyway, provide him with a working environment, machine, etc, etc.

All for three days a week?

Simon Lucy
Thursday, December 19, 2002

Simon, why would three days a week not be worth it (which is how I interpret your comment)?

Practical Geezer
Thursday, December 19, 2002

Because the relative overhead is too high.

There are practical problems as well.  If someone is only employed for three days contractually then if you need them to work over that time it becomes overtime, both more expensive and a hassle.

It shows a lack of confidence in the trading state in the near term.  That they decided to employ someone that was 15 months unemployed its feels like that that was as much a qualification for the job as any skills they may have had.

Someone out of regular work that long is more likely to accept a job under such unusual conditions.  But they are unlikely to feel secure and are more likely to feel that its a temporary job and acceptable only because its a better platform to find another job.  Employers like employing those already in work, it gives them a sense of security.

But I do understand the dilemma, there's too much work for one, not quite enough for two, or just enough for two.  Add a second body and all the overheads, and the overhead ratio zooms.  You become either more expensive, or you have to hustle more work.  You spend more time marketing than producing and your work output suffers, so you lay off more of the work onto your employee.  Your employee, even the best tempered one, feels put upon and deserves more money but no matter how fast you run on the spot its very difficult to over come that inertia.

Simon Lucy
Thursday, December 19, 2002

Hmmm some of the mangled syntax in that is further proof that I should keep what my fingers do private until I've finished the first 16 ounces of coffee.

Simon Lucy
Thursday, December 19, 2002

"Because the relative overhead is too high."

I gathered that. But can you explain why? In other words, exactly what overhead are you refering to? And why would that be too high? And, is that your private opinion, or experience?

"There are practical problems as well. If someone is only employed for three days contractually then if you need them to work over that time it becomes overtime, both more expensive and a hassle."

In terms of practical problems, I would expect other more real problems. Because, isn't overtime just as expensive and as much a hassle in a 40 hour week?
Or did you mean that with three days overtime is more likely? Which BTW I doubt unless your trying to fit 40 hours worth of work into 24 hours. So given that you really only have 24 hours worth of work, isn't overtime just as (un)likely.

Practical Geezer
Thursday, December 19, 2002

BTW, I ignored the rest of your response because it applies specifically to the original poster, and I am interested in the more general idea of working 3 days a week, or the equivalent of  it.

Practical Geezer
Thursday, December 19, 2002

If I where you I would take the opportunity at this point to find out more about why he would be willing to accept part time employment. Is it just because he can't get fulltime (which means he will keep on looking and jump ship at the first reasonable occasion)? Is it because he really likes long weekends and does not feel like full employment (which might be a serious problem for you if your business picks up)?
Whatever the reasons, there are few I can think of that are beneficial to you. Not that there are none. e.g. It could be that he really likes your business and is very confident that with his excellent skills this will not only turn into fulltime employment, but even a partnership soon.

Even so you should ask yourself whether you really want to hire someone that is willing to take a part time job.

Just me (Sir to you)
Thursday, December 19, 2002

Practical Geezer:

Adding an employee costs more than just their wages, on average a new employee costs at least as much as their salary again in direct and indirect costs.

Employer's NI, 12%
Indemnity Insurance, if its the first employee ever then they may be covered on an existing policy, possibly not.
Employer's Insurance.  If its  a first hire then the employer should take out some insurance in case of injury or some other claim by the employee. 

A computer system, even if its one already in existence, has an intrinsic cost and isn't available in the way it was before.

Development Software

Knock on costs on development network.

Source control, bug management?

Management time, even if the management style is very light and in the beginning it can't be, some time has to be spent doing this.

Statistical junk you have to do for the Gummint

Increased proportion of time on Sales and Marketing to feed the extra mouth.

Training costs, perhaps not in the first 3 months of the year, but the last 3 months?

In deadline situations the marginal cost rises by 50% for those days which are not normal work days, this increases NI costs.

So the new employee has to produce at least their own weight in _revenue_ to break even.  With the relatively high costs involved in employing a developer a sole trader might well be better off employing a  PA/office manager to take over all but the sales role leaving more development time.

It could be that even with all that that its feasible to hire someone part time but you have to take into account that if previously you were a one man band you're own direct earning power is diminished.

This shouldn't be taken to mean that I think that the prospect shouldn't be employed, but if  he is employed and he's dropped the first time the earining curve dips, what benefit has that been?

Simon Lucy
Thursday, December 19, 2002

Simon,

Am I correct in concluding that your arguments depend on the size of the operation?

I understand your explanation as follows.
- Each person is a cost factor as well as an income generator.
- Some of the costs are fixed.
- To compensate fixed costs you need to work a minimum amount of time.
- You can reduce the minimum amount of time by increasing price.

With regard to the size of the operation, would it be correct to say that some of the fixed costs can be shared among people and that too would lower the minimum amount of time someone might work?

Practical Geezer
Thursday, December 19, 2002

Well they begin with the initial situation which is an individual self employed person becoming an employer.  That is the worst case.

Proportionately a part time employee tends to cost more and has less opportunity to generate revenue.  That doesn't mean that in all cases a part time employee isn't the best way of doing something.  The availability of work is a factor.

But I was concentrating specifically on employing developers and getting over the hurdle of the first employee and eating those costs.  As you increase a company's size it becomes an entirely different animal, one individual then has less of an impact on overheads and in some situations a single part time worker can free up full time workers to do other work which is more profitable.  That's the hope of the original poster, its just very difficult to do that when its the first employee.

In general I'd employ them as a self employed sub contractor on specific projects with specific and well defined requirements.  If someone is good enough to trust as an employee, they're good enough to trust as a contractor.

Simon Lucy
Thursday, December 19, 2002

Simon; National Insurznce costs in the UK are pro-ratad for part time workers.

Part-time working might be abnormal in the IT field, but in the rest of the economy, it is as normal as excessive overtime is abnormal.

The question about working Tuesday to Thursday is in my opinion positive. It suggests the hire is thinking of the advantages of working part time instead of hoping to jump ship as soon as possible.

The first hire is always problematic, and it more general terms it is well known that expansion is a danger zone for most companies. The zone many companies don't seem to get through easily is that from five to twenty employees, so the poster can expect these kind of problems to recur as his company grows

Stephen Jones
Thursday, December 19, 2002

I work a three day week and I'm a developer. It matters very much how the hours are distributed over the week and whether or not I can work from home. I would not consider any job unless the working hours were specified in advance. You should also let him know whether you expect him to be available to answer emails and phone calls on days he is not working. Having a detailed contract doesn't mean you can't be flexible later but it does avoid costly misunderstandings.

John Ridout
Thursday, December 19, 2002

in response to the original post:

When I take a job, I try to increase my living quality. This can either be the case because of the challenge provided or because of the pay or because of a good working environment or flexible working hours or all kinds of other things.

If you would have hired me on a three-days-a-week basis and did not mention any restrictions about the working hours during the job interview, I would have assumed that I was more or less free to choose the working hours myself. (This freedom would have been one of the major pluses for the job, probably). So I think it is totally normal and acceptable that your employee asks if it is ok to work Tuesday to Thursday. He has a life to organize, you know, and when there are no reasons why you want him in the office on Mondays or Fridays (in which case you should have mentioned it in the interview already), why on earth should he not be free to choose his working hours himself?

jm2c,

Jutta Jordans
Thursday, December 19, 2002

"National Insurznce costs in the UK are pro-ratad for part time workers."

I don't know of any rule that exists for that.  So far as I was aware NI was paid based on the income, for this year the lower earnings limit is 72 pounds per week. 

There are contracted out rates but they depend on the employer running a scheme, and there's the old reduced married woman's reduced rate for employees. 

For employers the only rule is that the earnings are over the Earnings Threshold, which is defined as the same threshold as PAYE with the % reduced if there is a Contracted Out Scheme.

I'd be interested if you could point me at anything that contradicts this.

Simon Lucy
Thursday, December 19, 2002

If it' based on income, then if he's only paid for three days he's only going to be charged the NI for three days. So your original point that you would have to pay NI whether he works a three day week or a five day week is irrelevant.

Other countries in Europe have a much higher minimum, so you would have had a point.

I think you are grossly exagerating the difficulties and paperwork involved in hiring somebody in this field.

Stephen Jones
Thursday, December 19, 2002

No, he'll be charged the NI for the income, regardless of the number of days.  The NI is a significant cost, so are the other direct and indirect costs.

I'm not overestimating the difficulty, been there, done that, the t shirt is in shreds.

Simon Lucy
Thursday, December 19, 2002

Simon,

But if the NI is proportional to income, and income proportional to number of days worked, then isn't NI proportional to number of days worked?

Practical Geezer
Thursday, December 19, 2002

Isn't this what accountants are for?

John Ridout
Thursday, December 19, 2002

There *can* be problems with someone who works unusual hours (e.g. three days a week). Obviously, not all of these apply to all cases, but here are some things to consider:

1) Are you "on call" with respect to your clients, specifically clients that work M-F, 9-5? If some problem comes up on a Friday, you won't get any help from this guy until four days later.

2) How orthagonal (i.e. not overlapping) are the parts of the project you work on? If you are debugging some code he did, or want to run an idea by him or otherwise want to work *together*, you'll need him around at the same time you are.

3) What is the reason for the abbreviated week? Does he have a job Friday-to-Monday? Does this mean that he'll have to quit working on your project and switch over to something else, instead of working (paid!) overtime when necessary?

Joe
http://josephgrossberg.blogspot.com

Joe Grossberg
Thursday, December 19, 2002

The NI will be proportional to the income of course, but the capacity to earn is reduced.  If someone works three days a week and gets paid 100 pounds for that then the additional 11.80 isn't going to make that much difference.  If for those three days they earn 500 pounds then the additional cost will be 59 pounds a week.  Regardless of any other costs the breakeven point for employing that person is 600 pounds a week.

Most of the other costs are not proportional and so are disproportionally expensive..

I wouldn't get hung up on the NI, its just one of the costs but one that can't be avoided.

As for 'this is for accountants'. if anyone is planning on running a business that doesn't have a basic understanding of how such things work then they don't belong in business.

Simon Lucy
Friday, December 20, 2002

Because I ask an expert about NI and other taxes does not mean that I do not have a basic understanding of them but it does mean I don't waste my time worrying about the details of the tax system.

"I'm not overestimating the difficulty, been there, done that, the t shirt is in shreds. "

There is no need for taxation to be a difficulty when you leave it to an expert such as an accountant. I also do not complete my own tax return or fix my own car. This does not mean I do not have a basic understanding of taxation or the internal combustion engine or that I should not run my own business or drive a car. Programming is exciting enough the added joy of accountancy and taxation may be too much for me to bear. ;-)

John Ridout
Friday, December 20, 2002

Re: Leaving it to professionals

Here in Canada, even if you get a "professional" to complete your tax return (which we do, given that even a very simple corporate return is over an inch of paper thick), you still have to sign the return certifying that it is correct.

If you don't have a basic idea of how the various taxes etc work, how can you get a good enough idea of whether the numbers are accurate so that you can certify the correctness of your return? (Or perhaps is that a Canadian quirk?)

Also, the context of this conversation is the cost of hiring to a very small business with one or two employees.  If you don't handle any of your accounting internally at all (certainly not something I could afford to do) - then in addition to the NI being paid, you have to factor in the cost of the accountant to calculate NI for that employee etc.

anon
Friday, December 20, 2002

I agree, you have to understand the basics of how the various taxes work and I wouldn't dream of doing the calculation myself. I guess I'm lucky, a coporate return here is a lot less than an inch thick. I also found reading a a book on basic bookkeeping to be quite helpful too.

The accounting fees resulting from adding another employee ought to negligible. My accountant didn't charge me any more for adding one employee to the payrole. Maybe he is already overcharging me.

The NI will be paid whether you use an employee or a subcontractor. If I use a subcontractor, the subcontractor pays the NI and passes that on to me in the cost. It can't be avoided here because we have a wonderful thing called IR35 which requires a subcontractor who is effectively an employee to make NI payments as if he were an employee.

I do my own VAT (a sales tax here) calculations because it isn't too complicated, the fines are high and escalate, HM Customs & Excise have powers that policemen dream about at night "Warrant, what's a warrant?" and the telephone suport is excellent.

I think for a small business the main cost of the first employee comes in terms of your time. How much of my time must I spend managing my new employee? Hopefully the employee will be covering the cost of office space and equipment. The payrole is relatively simple. I only have to ask my accountant two things:
1 What will the gross payrole be?
2 What will you charge me for processing the payrole?

The point I failed to make before is that when choosing between subcontracting and employing the payrole and payrole processing costs are negligible compared to the other costs.

I hope I am making sense now.

John Ridout
Friday, December 20, 2002

Its true that IR35 can mean that you have to get involved with NI, but it isn't necessarily so.  For instance, I'm an employee of the company that contracts me out, I'm not a director nor do I have any capital invested.

So someone sub contracting to our company doesn't get involved in NI.

If you already have a payroll running employees then obviously running an extra one makes little difference.  However, moving from a self employed situation to an employer is an entirely different thing.

Simon Lucy
Friday, December 20, 2002

Someone subcontracting to your company doesn't get involved in NI but the NI is still payed by your company. I see where I went wrong now I ASSUMED you were talking about a private limited company with one employee which is common in IT rather than someone who is truly self-employed. That will teach me to type before I think.

John Ridout
Saturday, December 21, 2002

Well both could be true, you're right the NI overhead has to be eaten by someone.

Simon Lucy
Saturday, December 21, 2002

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