Is Contracting for You?
Is Contracting for You?
So you’re thinking of taking the leap from (so called) secure fulltime salaried employment into the unknown world of Contracting. Have you thought it through and weighed up the benefits vs the pitfalls? Or have you just seen the dollars that these contractors earn and are thinking “I’ll have a piece of that”?
Becoming an independent contractor can give you better working conditions, variety of roles/industries and potential flexibility, but there are disadvantages too. It’s not a decision to be taken lightly, so what do you need to consider in order to make a business case for “taking the leap”? Below I’ve taken a sample of the common so called Benefits of Contracting and provided a contra view to assist you in analysing these benefits and how they would apply to you.
You Are Your Own Boss (Yeah right!)
Sure you decide when and where you’re going to work, what you will and will not do. But the reality is, once you’ve decided to enter into a Contract between you and a Client it will dictate what you do and do not need to do. Generally speaking, that means whatever the Client wants you to do. So yep, you’re the boss of deciding which contracts to take, but once you’re in one, the Client IS the boss.
Good Work/Life Balance
This is very much in line with being your own boss and the ability to choose when to head home for the day. The reality is that as a contractor you’re probably going to be working on a project. Projects inevitably come under pressure and when that happens how pleased is your client going to be when they see you heading out the door on the way to the beach while their fulltime staff are working all hours to get your project over the line?
Sure the potential for great work/life balance is there, but sometimes it won’t be your choice.
This one is actually nearly true. The office politics will still be there, but as an independent contractor you can ignore them. You’re there to do a job and generally can simply let that ‘stuff’ flow over your head (depending on your role).
Having said that, the contra view is that if you’re not the type that can let that stuff ‘flow over the top’, then contracting might not be for you!
Test Out New Fields Industries
Not sure if you want to shift your career into a new field? Absolutely Contracting provides an opportunity to “try before you buy” without committing yourself to a fulltime job. If it doesn’t work out you can quickly move on and your CV doesn’t look like you had a meltdown. The contract simply came to a natural end.
The tricky bit is that generally Clients take on contractors for the expertise and experience in the domain required. So the opportunity to test out new fields may not be as accessible as you think.
Earn More Money
Everybody sees the hourly rate, multiplies it by 2080 (52 weeks * 40 hours) and thinks wow. Trust me, you will not earn that figure! There’s two things to consider when it comes to evaluating Contractor income vs Salary income.
Salaried employees have a whole list of things ‘included’ in their salary that Contractors do not. The obvious ones are payment for Statutory Holidays, Annual Leave, Sick Leave, Bereavement Leave, and Jury Service. Very quickly your 2080 hours available comes down to around 1700.
Then there is the “Company benefits” like mobile phones, expense reimbursement, car parking etc etc
Every contractor will experience it. Downtime, On the Bench, Lost Time, call it what you like but the ability to move from one contract to another without any is extremely rare. Make sure you factor in some Downtime in your calculations. Any available hours being paid at $0 wipes out the extra income of the contractor rate very quickly!
So sure, the potential to earn more money is real but don’t under estimate the increased risk being taken and make sure you’re being fairly rewarded for that risk.
Ability to Work Part-Time
Everyone would love to get that fabulous work life balance and work 3-4 days per week, and yes contracting can provide that opportunity. But there are pitfalls that make it difficult to sustain. Clients are happy to pay top dollar because you’re skilled and bring expertise. They want you accessible and available when they or their team members turn to ask a question. You may well be quite capable of “doing the job” in 3 days a week, but if your absence is being noticed the relationship will suffer.
So, being a contractor is very different to being a fulltime salaried employee. You no longer have a boss. On the other hand, you’re alone and responsible for your success and failures. If you coast, you’ll be found out. If you fly, you’ll (probably) have great success.
Unsure which step to take before you make the leap? For free advice and guidance, chat to us to see if becoming a Consultant / Contractor is right for youPosted on: February 4, 2016Graeme McInteer,