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Hourly rates, project portals and recruiters for freelance SAP Commerce Cloud developers targeting the German, Swiss and Austrian markets
In each country of the EU there are different hourly rates for SAP Commerce Cloud developers. To get a fair hourly rate for Germany, Switzerland and Austria you can follow these steps:
- Find with the GULP Studensatz Kalkulator what is the average initial rate in the profiles of the developers registered on GULP. You can see there some examples of the profiles including the age of the developer which can help you guess what should be the fair hourly rate
- Now decide what is your target remote rate and your no-go minimum rate. This last rate is the minimum rate that you will accept. For example, I don't accept any rate near the average rate of a java developer because I have 12+ years of experience with SAP Commerce Cloud and they are worth 10-20% more than a Java generalist
- Add 3% because German companies are used to pay you 45 days after the invoice day. If they pay sooner, they usually ask you for a 3% discount for early payment. In Austria and Switzerland I haven't given this discount
- Add EUR 5 to your target remote rate because during your first call with a recruiter they will ask you for a discount
- If there is double taxation between your taxation jurisdiction and the customer or recruiter, you will need to add these taxes to your hourly rate. Please see below how to calculate the tax rate
- After these steps you have your target remote rate to start the negotiation. You can add it to your profile in the websites of the recruiters
- To calculate the on-site hourly rate, you will have to find your own method:
- I check the cost of accommodation on Booking.com
- The cost of transportation by using Omni but is not always exact
- The cost of the restaurants in the city where you will be working
- But these costs are high, I never add them fully to my on-site hourly rate. This means that I always lose money with the on-site working hours. You have to decide on your own what rate to charge. Usually I charge EUR 15 more than my remote rate.
Taxation when working from other EU country
When you live in an EU country and you work in another, there is the risk of paying taxes in both countries. Before seeking a project in another country of the EU, you have to read the “Double Taxation Agreement” between both countries.
This is an important topic and sometimes, the double taxation is so high, that it is not worth to work in some countries. For example, now that I am located in Bulgaria, I have to charge 50% more for Swiss projects than a German developer. Due to this, I recommend the head hunters to find candidates living in Germany.
Where to promote your profile and project experience?
In Germany, Austria and Switzerland (DACH) there are websites in German language which are popular for project posting and networking. These are the ones which I used successfully to find projects:
- Xing is the German version of Linkedin. Although it is not very useful to find projects, it might help you a lot to find recruiters and sometimes end-customers
- GULP is one of the biggest recruiting companies for freelancers in DACH. They are professional: They only send you an email with projects which match your skills and they generate the invoices for you when you are in a project
- Hays Professional Solutions GmbH is also a big recruiting company for IT. I haven't worked with them in any project, so I don't know how good are their internal processes
- freelance.de is the biggest project portal for freelancers which I know of in Germany. All projects seem to be posted by recruiters, this means that you will find them in the websites of GULP, Solcom and other recruiters. If you sign up here this will give you a lot of visibility as a freelancer in Germany and with the saved searches you can monitor how many SAP Commerce Cloud projects are posted in DACH every month
- Solcom GmbH seems to be a big recruiter after Hays and GULP. They are professional: They only send you an email with projects which match your skills but I don't have any experience working with them
- Next Ventures is a recruiter company which has exclusive access to some corporations using SAP Commerce Cloud, so it is a good idea to send them your CV. Their professionalism is OK. It is always better to ask for the full description of the project to be sure that your skills match
- LinkSAP.eu specializes in projects using SAP products, so it is a good idea to send them your CV. Their professionalism is OK. It is always better to ask for the full description of the project to be sure that your skills match
- Computer Futures is known as a recruiter for IT in Germany. I don't have any experience with them
- LinkedIn makes you visible for recruiters located in the UK working with German companies. Because there are usually 2 recruiters between the customer and me, my hourly rate is too expensive and I have never gotten a project using LinkedIn
Why recruiters and other middle-men are needed when working in Germany?
Many German companies won't sign a contract directly with you, a freelancer. In Germany the legal status of a freelancer is fragile, you are only a person which has a liberal profession (defined by the German tax office) which doesn't pay corporate taxes. There is no legal definition of a freelancer in Germany and companies can be very easily accused of hiring you as an “undercover permanent employee” by the state pension and they could pay up to 4 years of social security contributions if found guilty.
If you founded a company, you won't have this issue. For any company, you are a juridical person providing contractors.
This is the first obstacle to work without recruiters. The second is the need to have many acquaintances which are SAP Commerce Cloud developers or are managers of the IT department, in big DACH corporations. For 3 months I used Xing to find and contact IT managers using SAP Commerce Cloud and less than 7% accepted my contact request. And only twice in 12 years, I got technical interviews through Xing.
This means, that recruiters are essential to find a project in DACH. They know what companies are using SAP products and are willing to sign a work contract with you as a freelancer. Their services are expensive, 13%+ of the hourly rate paid by the customer, you have to book your hours twice and they are a third party in any extension of the contract but the best that you can do is to help them do their job:
- Explain them why you are a good or bad match for a project
- Explain them what is the fair rate. Suggest them to hire a Java programmer if the budget of the customer is too low
- Find out how what is the minimum information needed to approve your time-sheet and what is the deadline.
If a former boss contacts you because he wants to work with you again, offer him a good discount. Projects with former colleagues are always long-term (18+ months), they will extend your contract even during months with less work to keep you in the project and may raise your rate when they are extremely satisfied by how you develop, estimate and write documentation.
How to spend less time talking with recruiters
- Always check that your skills match what the customer is looking for. If the project listing is unclear, ask for additional details before having a phone call with the recruiter
- If the recruiter asks for referrals and contact information of your former bosses, ignore the project. In Germany it is unusual to ask for those referrals. They are used by some recruiters in UK to find companies using SAP products and they will bother your former manager with calls. Those recruiters don't have projects for you
- To avoid sending your CV twice to the same project, ask in what city the customer is located. This gives you a hint to recognize if you already applied for that project or what company is looking for SAP Commerce Cloud developers. You may already know people working there
- During the first call, give a remote hourly rate but ask what is the budget of the customer. If it is 20% lower than the average found in GULP Studensatz Kalculator, the project is probably understaffed and there won't be enough developers to successfully finish it; or there is a second recruiter between you and the customer
- Always keep in mind the value that you give your potential customer when negotiating your hourly rate. If a company sees this as a cost, they won't value you as an expert, they might not value integration tests, many testing environments, having an integration environment with the same data as production.
- Ask when exactly you have to work onsite. Don't leave this question to a further negotiation. It is better to know customer's wish from the beginning and after they know that you work reliably from home, they will prefer that you stay at home.
- Don't have any “introductory” phone call if there isn't any concrete project. It seems that recruiters need to show that they are talking to candidates even when there aren't any projects. I may be mistaken
If you have any other advice, please let me know.
My experience with some of the recruiters
Above you will find a list of websites where to find projects and promote your skills. I have described there my experience with the recruiters.
How to make a good impression on the first interview with your prospective customer?
Help him! Ask him about his pain points in the project and give him advice for free.
With this attitude you are going to get a deep insight of the problems tackled by the projects, what developers complain about and what is the added value of the final product. It is also more interesting than just answering technical questions about Java, Spring and SAP Commerce Cloud. The prospective customer will get something from the time spent on the interview and a deeper impression of your IT and soft skills.
If you see something that you don't like and won't be interested in the project, be honest and inform the prospective customer during the interview or soon after it. He doesn't want to lose time with you. Sometimes what the customer wants to do with SAP Commerce Cloud is a bad idea and won't work.
Signing the contract
Read it carefully, take your time, at least 2 days. If there are conditions which are unfair like 5+ years in which you cannot work for that customer through other recruiter, ask about that paragraph and negotiate.
Make sure that the following points are stated in the contract:
- Your hourly rate
- Any discount if there is an early pay
- When your invoice is going to be paid
- How many weeks in advance the customer is going to inform you about the termination of the contract. This is for reference, if the customer wants to terminate a contract by Friday, he will do it
- How many weeks in advance you have to inform the customer about the termination of the contract
- What happens if the requirements are unclear and you have to improve the code. Can you book those hours?
Contracts with the recruiter depend on the contract between them and the customer. If the project won't start, your contract with the recruiter will be terminated. There is always a risk of this happening and it is better to try to keep a second application open. This can be difficult though.
What to do when the Purchasing Department calls you?
Usually they want to confirm that you are paying taxes as a freelancer or as a company. They will confirm all the legal information required to be their provider.
And they would like to have a discount. Usually EUR 1-3 less per hour are enough to make them happy. It seems that they have to show that they negotiated with you and they were successful.
When to invest in hardware?
As an external employee, the customer expects you to have better results than permanent employees, not only because you are an expert, but because you have faster hardware. When Tomcat takes 5 minutes to start or you see that you spend a lot of time running “ant clean all”, it is time to buy new hardware and to move to Linux which is 30% faster than Microsoft Windows on IO.
My current laptop has:
- AMD Ryzen 5700U with 8 cores and 16 threads
- 64 GB RAM DDR4
- SSD 970 EVO Plus NVMe M.2 Samsung 1 GB
To prevent losing money if the hardware breaks, I recommend to buy a twin laptop and mirror the hard disks every three months and have weekly offline backups. If case you have a hardware failure, you can start using the second laptop in less than one hour.
If you find any mistake, you disagree with me in any point or have new advice, please send me an email. Thanks a lot!