Moonlighting

[kenmoremmm]

I'm an engineering project manager and considering moonlighting with my former company on a very limited basis. My former rate was $65/hr with standard benefits. Now, I would be a contractor with no benefits. What kind of rate should I seek? At my current company, overhead plus fringe comes out to something like 114% of my hourly rate, but that's in Canada whereas my former employer is in the US.

[sixwings]

We pay our software engineering contract PMs between 100-150 a hour, in Victoria BC at a crown corp. Maybe 70-80 if they are newer. 70-80/hr is probably much lower than what you can get. Good PMs are VERY hard for us to find right now and are demanding a higher rate as a result.

Internally we pay PMs 60-70 + benefits which works out to about 75-85ish with benefits and pension. It's very hard for us to find capable PMs for that rate and we mostly just use contractors for PMs.

You could consider reaching out to a staffing agency like Randstadd and give them your CV and see what they say/think your going rate should be. We hire all our PMs through contracting companies like that so they have a pretty good idea of what the going rates are for PMs with various levels of experience.   

[JLee]

Not knowing PM rates, I'd think $200/hr or more.  The billing rate I'm seeing for vendors in tech-adjacent areas is $150-250/hr (USD).

[jinga nation]

I'd ask $180-200 (US) per hour as it is limited basis.
Good engineering PMs are hard to find, and harder to keep.
Worst case, at least double of your prior employee rate.
Did they approach you or did you approach them?
If former, they know you're good, and could be willing to pay a higher rate.

[Chris Pascale]

There's a great benefit to them, and a high cost to you. If you can work it all out, then maybe everyone can win.

Here's a question: How much value do they get in actual dollars? Would it be $1,000,000 at the end of the project 6 months from now? If so, then maybe you're worth $150/hour with a $20,000 bonus for seeing it through to the end.

Mind you, I'm making up numbers here, but maybe you can get paid a nice rate and then receive an incredible incentive for seeing it all the way through.

[kenmoremmm]

OP here.

I had reached out to my former boss to seek additional work from him. I was hoping to serve more in a QC role rather than doing engineering or PM, because that would be easier to piecemeal bits here or there.

Apparently, my old company (that bought my boss' former company that he now works for) won a megaproject and the particular skillset in question is something I have experience in that most people do not given the niche field. However, my skills in this field are surely outdated (12 years ago since I last worked on it), and I don't particularly consider myself an expert at anything. I'm good at staying on top of things, delivering good final products, and staying in the budget. My old boss is trying to help me out per my earlier request. I don't want to stick it to him or the company to burn any bridges, but a fair rate is what I'm targeting. It's definitely not $150/hr as that's like a fully burdened billout rate to a client. Structural engineering is definitely not a lucrative field!

[JLee]

OP here.

I had reached out to my former boss to seek additional work from him. I was hoping to serve more in a QC role rather than doing engineering or PM, because that would be easier to piecemeal bits here or there.

Apparently, my old company (that bought my boss' former company that he now works for) won a megaproject and the particular skillset in question is something I have experience in that most people do not given the niche field. However, my skills in this field are surely outdated (12 years ago since I last worked on it), and I don't particularly consider myself an expert at anything. I'm good at staying on top of things, delivering good final products, and staying in the budget. My old boss is trying to help me out per my earlier request. I don't want to stick it to him or the company to burn any bridges, but a fair rate is what I'm targeting. It's definitely not $150/hr as that's like a fully burdened billout rate to a client. Structural engineering is definitely not a lucrative field!

In this case they'd be your client -- why would they get a discounted rate vs what they bill out?

[Smokystache]

There's a great benefit to them, and a high cost to you. If you can work it all out, then maybe everyone can win.

Here's a question: How much value do they get in actual dollars? Would it be $1,000,000 at the end of the project 6 months from now? If so, then maybe you're worth $150/hour with a $20,000 bonus for seeing it through to the end.

Mind you, I'm making up numbers here, but maybe you can get paid a nice rate and then receive an incredible incentive for seeing it all the way through.

I like CPs line of thinking here. If possible, see if you can set up something beyond just billable hours. The ideal scenario would be to take on a small, but complete project and then "value price" it. For example, "I will do Project X to these specifications and deliver all the results/deliverables by DATE for $XX,XXX." They can price it to the customer much more confidently because you have given them a fixed price. I'm assuming that they will trust your deadlines because of your previous track record with them. Of course, this only works if you can reasonably predict the time/effort needed to deliver the results.

I just think hourly billing is wacky. ("So you're telling me if I work slower, I'll make more money ... as long as it isn't too slow?? And no one can really say how many hours I worked anyway?"). Not only is it wacky, it is the least helpful to the client(s). (Tell the customer: "I'm hoping I'll have it done in X hours, but it may be more, so you're good with a higher price than I estimated, right?")

[kenmoremmm]

Yes, I agree that T&M (hourly) billing is weird indeed. Now, many contracts are being set up as GMAX (guaranteed maximum) where you bill at your hourly rate until you finish the project, but you cannot bill over your quoted amount. So, when you invoice, you should really only be billing for actual time spent, vs a fixed fee project setup where you get paid X no matter what upon project completion.


Follow up question (hopefully there are some engineers here): I have my PE license, and now P.Eng. (Canada). I don't have a business. I don't have insurance. I assume that if I contract directly with someone, those would be expected vs some guy that is providing his professional opinion/recommendations but has no true skin in the game. Thoughts on how to handle this? I'm certain I could not afford insurance since that's multiple $10ks.

[Boll weevil]

I’ve never been a contract engineer, but have seen some things over the years:

- You have to figure out what the company will provide and what it won’t. The company I work for has typically provided everything, but I’ve heard of other companies where contractors are required to provide their own computers/phones/supplies and have to pay rent on the desk. Engineering software is particularly expensive, but even the fees on stuff like MS Office can add up quickly.
- I don’t know how payroll taxes work in Canada, but in the US self employed people also have to cover the employers half of social security and Medicare/Medicaid.
- When I first started, we had a lot of contract engineers. My understanding was that some worked for the job shop, and some technically were self employed but the “job shop” handled all billing, paperwork, taxes, etc. The company I worked for communicated directly with the job shops. But later we outsourced contract management so that our company would work with a single job shop, and that shop would subcontract to the other job shops. Each shop would take a percentage for their services.

And all this is before stuff like health insurance and IRAs.

Due to all those expenses, rates I thought sound great were described as breaking even if time was the same… the big benefits came from overtime, with contractors eligible for time and a half.

All this to say you’ll probably be asking for a rate higher than you would’ve guessed, and the company won’t bat an eye paying it.