If you’re thinking about moving from paid employment to contracting then the chances are that you’ve heard all the good things about the contracting lifestyle and have an idealised picture in your head as to what it involves. And there can be no doubt that many of those good things are true – contracting can be a very rewarding career move for the right people. But contracting is also a very different working style (and life) to what you have been used to and it is important to grasp this – and everything involved – before making the leap. For good and for bad you will have no boss, no company to work for, will be accountable only to yourself and will survive on your own get-up-and-go and nothing else. You will be living by the seat of your pants, at least for the first year or two and will need to commit to it like you have never committed to anything before. You will need to be your own salesman, selling your skills, your own negotiator, agreeing a price, and your own recruitment agent, finding clients. There will be more risks and at the same time there will be more rewards. If this sounds like something you might be interested in, read on:
Why Companies (Clients) Love Contractors
The first thing to understand is why companies love contractors. Understanding this is crucial to seeing how the contracting industry works and working out why future clients may want to employ you. It will also help you sell your services more effectively if you know what employers are looking for.
Contractors Are Flexible – They don’t do more yoga, they just offer much more flexible working hours to employers and this can be incredibly useful with urgent projects or with jobs that require some work outside normal working hours.
Contractors Are Easier To Manage – As with flexibility, contractors can be brought in for certain projects that suit their skills sets as and when they come up and only when they are needed. They can also hire and fire them easily and can bring them on for a day, week, month or year depending on what the project involves. The employer need not worry about any kind of long term commitments or responsibilities to the contractor.
Contractors Bring Specialist Skill Sets – Because they are able to concentrate on one specialist area of one particular sector, contractors often have very unique (and in-demand) specialist skills. These may far more specialist than people working in the company and therefore worth bringing in to complement the company’s in-house employees.
Contractors Offer Better Value for Money – Though they may charge higher fees than company staff, contractors will come in and get a job done in a much quicker time than the staff would take and will only be their for a short while. Add to that the fact that contractors do not require holiday pay, sick pay or National Insurance Contributions and it becomes clear they offer much better value to employers.
Why Contracting Might Be Right For You
The most obvious reason is the one most people think about first – being your own boss. This can give you a sense of freedom and excitement (as well as pride) that doesn’t come easily with most employed jobs. No one should underestimate how great it feels to work for yourself and not answer to anyone! This leads on to the second important reason contracting might be right for you – you get to choose your own career path. You can pick and choose the jobs you want to do in order to take your career in the direction you want it to go. This means getting experience in the type of work that you want to specialise in, doing training in that area and picking clients who need those kinds of skills. At the same time, you can, whenever you get bored or want to make sure you have a broad base underneath your specialist skills, opt to take on a wide range of jobs in your sector. This availability of variety is often another reason that people opt for contracting, not wanting to get stuck in a rut like they are in their current jobs. Finally, there are the rewards – firstly the freedom to take holidays whenever you want and to work the hours you want and secondly, the higher rates of pay that allow you to take those holidays. Contractors are usually paid much higher rates than regular employees and for the right people in the right industries contracting can be very lucrative. This is complemented by the fact that there are also some excellent tax breaks for contractors meaning they keep even more of those extra earnings than regular staff do.
Why Contracting Might Not Be Right For You
If it were all as simple as that everyone would be doing it! There are, as with all things in life, some downsides too. Firstly, not every sector has a booming contracting industry. So you’ll need to check whether yours does. Secondly and far more importantly, you’ll need to think about whether you are the right kind of person for contracting. Think about the advantages mentioned above. Would being your own boss and having all that freedom really suit you? Are you the kind of person who can get themselves out in the morning and go out and find clients, who can keep going through the lean months and keep persevering when you haven’t seen a client in weeks? Are you ok with deadlines and project management and don’t need someone else looking over your shoulder and making sure you stick to the correct timeframe? Some people thrive in such an environment whilst others fall apart. Which sort of person are you? And when things go wrong, when a client is unsatisfied with the work that has been done, it’s you that has to deal with it, not your boss or someone higher up the ladder.
That leads to the second point that people forget – the amount of hassle that running your own business might involve. If you decide to run your contracting through a limited company then you will face a great deal of administration outside of the actual contracting work – dealing with companies house and HMRC, accountants and weekly forays into paperwork. And that’s just if everything goes smoothly. If you find yourself with a client who hasn’t paid then you will need to deal with the hassles (mental and legal) of chasing them for payment. And this happens more often than you would imagine! It also highlights another downside of contracting – the lack of security. As a contractor there is no support network behind you that you would get with being employed by a big company. You have no one to back you up if someone doesn’t pay and you are on your own if you get sick or cant work. There is no holiday pay, no sick pay and no one is handling your pension. There is also the uncertainty and stress of those months without any income, if they come along. You stand and fall on your own, and some people definitely do fall. So think carefully about what you are looking for before making that leap!
What Makes A Successful Contractor Then?
You’re chances of being successful will be higher if you think the following applies to you:
(1) Can move around, from job to job, place to place without being flustered. And you are able to adapt quickly.
(2) Can pick up new ways of working, new tools and technologies quickly.
(3) Can get on well with people and feel at ease with new people. Can build new working relationships quickly.
(4) You are willing to help other people (usually in-house staff) without being critical or condescending.
(5) You know when to offer advice and when to shut up. Sensitive to the needs of an in-house team.
(6) You can motivate yourself – would consider yourself to be someone with ‘get-up-and-go.’
(7) You can network easily and are comfortable selling your skills to other people.
(8) You know how to maintain relationships and keep in touch with old clients.
(9) You understand that your reputation is everything and act accordingly in all business dealings.