I earn $10k/mo contracting 20 hours per week. Personally, this extra income helped me maximize my day job benefits (401k and ESPP) and provided liquidity during the home buying process.
I recently moved to the US, and ever since I keep getting messages on LinkedIn offering contract/freelance jobs.
However the hourly rate is so poor that it would pay less that my current job base pay (not counting stocks and bonuses).
In Europe the rule of thumb is that contract job should pay 2x your full time job rate. This is based on the associated overhead plus lack of benefits (e.g. you need to pay your own pension contribution).
This made me think, is anyone taking these contract jobs? I see several possibilities:
a) Contract work in the US is not attractive.
b) People reaching out in LinkedIn are the bottom of the barrel. There are better rates out there.
c) People run several contracts in parallel, or with a full time job.
Is any of these true or am I missing something?
The 2x calculation is similar in the US. I've also seen "3x your hourly rate as an employee" if you're relying on the contracting income. It's important to account for the time you'll spend doing sales and misc. non-billable business building.
There are lowball contracting offers all over the internet and people sometimes accept these for various reasons. A higher tier of sustainable contracting does exist though, with most of the higher paying work sourced via networking, not via job boards.
One side believes that contractors are cheap, disposable labor that costs less than hiring an employee with benefits.
Another side believes that contractors are a way to access temporarily needed expertise they lack in-house and cost more than hiring an employee with benefits.
Some firms' views depend on the skillset. Other firms have the same view no matter what.
In my experience, the more general a position, the more likely it is to be put in the "cheaper" group. The more specialized a position, the more likely it is to be put in the "expensive" group. Neither of these categorizations necessarily is correct, just how the firm is viewing things.
I did a tiny bit of work for them, but they haven't managed to pay me even after 100 days :)
Just adding another data point, that YMMV, and it might not be worth your while.
There are high paying contracting jobs, but they are only available to people that know people that offer good contracts. A friend of a friend has a 6mo contract with a Fintech company paying $500k.
What I meant by side gigs was the more typical model of finding small gigs with flexible (read: resource constrained) buyers.
My experience has been that serious networking has been more effective than anything else.