Cutting Tool Engineering
September 2009 / Volume 61 / Issue 9

Tough times need not be painful

By Michael Deren

You can find out that times are tough by reading the newspaper but it really hits home when your company downsizes you. That was recently the case for me and about 30 others at the company I worked for.

Our company had been taken over by a holding company 2 years prior, and has only one primary customer. As you might expect, I had been concerned about my future. Fortunately, I saw the writing on the wall several months in advance and started to prepare. However, the employment opportunities where I lived in New England were slim, so I started looking elsewhere. My primary criterion was to move closer to my aging parents in the Midwest. As it turned out, my layoff occurred only about a month before I was planning to give notice.

The primary option I looked at and have used several times in the past was contract employment. Over the years, I have often found new positions not so much on my own, but by others who specialize in locating jobs. One type is called a recruiting firm, or headhunter. Temp agencies, or contract houses, are another type. All are paid by the client companies that hire staff through them. This column will focus on the pros and cons of contract houses.

These companies typically place individuals for short-term positions, which can last from a week to several months, with 3 to 6 months being typical. I have heard of some agencies even placing staff for years-long assignments. I have worked at several contract houses over the years, with assignments lasting up to 18 months.

In spite of the term contract house, contractors are not locked into any specific duration of time. They are guaranteed a specific hourly dollar amount for the hours worked and are employees of and paid by the contract house. The client company pays the contract house contractors’ hourly rates, taxes, social security insurance and workers compensation, plus an hourly fee for services rendered. The more hours a contractor works, the more the contract house earns.

Employees of a contract house need to be professional in their appearance and conduct and cannot solicit a client for their own gains. They also must adhere to the client’s hours and policies.

One of the drawbacks is some contract houses don’t offer insurance. If they do, it can be quite expensive for dependent coverage. Another drawback is some contract houses do not pay for holidays or sick days. Because most client companies are looking to fill a short-term position, there’s no guarantee how long the contract will last. The client company might plan for 6 months, but the work may dry up and the contract may conclude in 3 months.

On the upside, contracts often last longer than anticipated. In addition, contract positions can become permanent employment. Working for a contract house provides flexibility, allowing contractors to take time off, such as to interview for a permanent position somewhere else. By giving enough notice, contract workers can even take an extended leave when needed.

When sent on an interview to the client company, take the time to see if it’s a good fit. There’s no obligation to accept an offered position. However, those who rule out every interview jeopardize their standing with the contract house. Remember, the goal isn’t to look for the ideal position such as when seeking permanent work. An important advantage is that client company and contractor get to “try before they buy.” If an assignment isn’t suitable, a contractor can work at another client company if something is available.

Don’t despair when suddenly unemployed. By checking out the various contract houses and seeing what they have to offer, you can be gainfully employed in a relatively short period of time. Good luck! CTE

About the Author: Mike Deren is a manufacturing engineer/project manager. E-mail him at

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