Working against your company

At the last company I worked for, most of the projects were Firm Fixed Price (FFP).

This meant that no matter what the company spent to get the job done, they would received a fixed fee for completing the job.

This is a great opportunity to increase profit margins if you're efficient.

If they could complete a job that was costed out to take one year with three people but actually do it in six months with two people, their project margin has dramatically improved.

The problem when I worked there was that individual employees were measured on utilization rate.

Basically you had a billable target of X number of hours and if you were below that, you were less likely to get a raise.

But working more hours doesn't actually help the company in a FFP scenario.

In fact, it hurts efficiency! I was incentivized to take LONGER on projects to hit billable hours targets.

But the company would be rewarded if they completed the project FASTER.

So now the employees and the company are working at cross incentives.

I understand why the company does it. It's an easy metric that SEEMs logical in some ways. They can tell how much an employee works per year.

But it creates weird disincentives and it drove me crazy.

That's the type of thing that made me want to go 1099.

My incentives were aligned to me, not to a company metric that didn't make sense for anyone.

If you keep finding yourself in similar nonsense situations and really hate it, going 1099 may be right for you.

Want the full playbook? Check out Going 1099.