Important Note for Recruiters and Contract Agencies
As an independent software consulting corporation, GoingWare contracts directly with its clients and does not work with third-party brokers.
Michael D. Crawford
GoingWare Inc.
crawford@goingware.com
If you are acting as an agency for another company that is seeking technical expertise, please read and understand this policy before contacting me. It will save us both a lot of time and frustration.
You may ask, do I work with recruiters? The answer used to be yes, under particular conditions, but now that GoingWare is incorporated, I'm afraid I must refuse all requests from recruiters who wish to work with me.
As a simple practical matter, I have only obtained one contract through a contract agency who was willing to work within the simple policy I originally laid out. If you're curious, you can read my original policy on working with recruiters.
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On the other hand, I receive a few phone calls and dozens of emails a day from recruiters who have obviously not bothered to actually read my resume, let alone my requirements for working with recruiters. Today I was awakened from bed by a recruiter who actually had my resume in his hands and wanted me for some very highly specialized and deeply technical work, and when I pointed out that I had absolutely no relevant experience and would be completely out of my league on that job, he looked at my resume and said "why yes I see it doesn't say anywhere here that you know anything about these skills".
If I can't count on recruiters to carefully research me and my job skills and experience before contacting me, how can I count on a recruiter to place me with a client I will be happy with? If you're a client who's thinking of hiring a recruiter to fill your staff needs, I'd like you to consider whether a recruiter will really serve your purposes if the standards of the technical recruiting business has fallen so low that consultants like me would make the effort to write web pages such as this and put our reputations on the line to speak out and tell the recruiters to just go away. If you're a fellow consultant, please read all the way to the end!
Since actually writing up and posting up the old policy, only one recruiter acknowledged that he had read it and was willing to work with me under the requirements I laid out, and since I replied that I wasn't immediately available he simply did not return my phone call.
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Simply put, I'm a consultant so I'm not looking for a perm job, so perm recruiters don't serve my needs. And contract agencies do not take the effort to truly serve the needs of either the consultant and the client, certainly not my needs, so I feel it is better if we set some limits and decide to just do without them.
On a more serious note, shortly after incorporating my business I was deeply distressed to read the following in the book Inc. Yourself by Judith H. McQuown:
If you work in the computer field, current IRS regulations do not permit you to have a one-man corporation. (p. 13)
The author suggests structural ways around it but experts I have consulted says that the IRS frowns on those methods. The problem is with section 1706 of the Tax Reform Act of 1986, which was included in the act as a result of lobbying by some contract agenies:
The legislative history of Section 1706 suggests that it was the result of efforts by one group of technical services firms to gain an economic advantage over another group by manipulating Federal tax policy. The short term result of this legislation was to create confusion and uncertainty about the employment status of thousands of consulting engineers and computer specialists, many of whom had been accustomed to working as independent contractors. The resulting dislocations have had a chilling affect on innovation and productivity in both the manufacturing and services sectors of the nation's economy.
Seeing how it's the recruiters that caused this problem I don't see how I'm solving it by working for the recruiters. Instead a simple solution that already works well for me was posted by a consultant on alt.computer.consultants:
If you want to avoid trouble with 1706, some much better ways are:
- Don't work through brokers. 1706 does not apply if you don't go through a third party (see IRS Notice 87-19, paragraph 9). Also, if you eliminate the third party, the client pays less and you make more.
- Satisfy as many of the 20 factors as possible. The 20 factors actually define a pretty good way of doing business. It's rare that the nature of the task is such that you can't satisfy all or nearly all of them
It's terribly important to me that my business is established as a going concern and recieves equitable treatment from the IRS. For that reason, I will no longer consider requests from recruiters of any sort to retain my services. It's important to understand that simply being incorporated doesn't shield me from requirements under section 1706; I must obey the law.
I want to comment on something pretty important about recruiters and the 20 factors. A recruiter from New Boston Systems was discussing what actually were pretty interesting contracts with me, and I was interested and she seemed to deal with me as an individual (had actually read my resume, was familiar with what the work in question entailed, etc.) so I was actually considering taking the job. But it seemed apparant she had not read my original policy so I referred her to my resume where I knew she would see the link.
The recruiter was distressed to see my statement that I would only sign contracts directly between me and the client, and bill the client directly, with the agency billing the client separately through whatever means they could work out between themselves. She explained that wasn't how New Boston worked, that New Boston would be my client, and I "would be paid every week whether on not the client paid them".
I think one of the real keys in the 20 factors, and in my view probably the ulimate determinant of whether or not one is an independent business, is whether the business takes its own financial risks. If I get paid whether or not New Boston does, then I think that is a glaring failure to satisfy the 20 factors.
(It's interesting to note that the recruiter, who'd seemed pretty personable at first, simply didn't return my phone call after I left a message replying that I was serious about the policies I had written for working with recruiters. So much for treating me like a human being.)
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If you are a consultant, and are wondering how I manage to stay in business without the involvement of recruiters, I want you to know that it's not too hard, that actually it's even fun and interesting most of the time. You can find out how at my page: Market Yourself: Tips for High Tech Professionals. And if you work for a contract agency, I want you to consider making the break to truly independent consulting. Yes, it's risky and there have been hard times and certainly there's been a lot of backbreaking work, but it's a better life, I know I can say it as I watch my business grow and prosper. Consider making your business grow and prosper rather than some recruitment firm's.
Yours,
Michael D. Crawford
GoingWare, Inc. - Expert Software Development and Consulting
http://www.goingware.com
crawford@goingware.com
Tilting at Windmills for a Better Tomorrow.
