Contracting is becoming a serious career choice for many. It offers flexibility, work/life balance, an opportunity for the over-55’s to extend their career and generally it’s well paid.
But while the range of people considering contracting has expanded recently, in reality it’s been growing in popularity for around 15 years. So what exactly is it, and more importantly, is it right for you?
Terms like the gig economy, contingent workers, freelancers and self-employed professionals all essentially mean the same thing – that someone is providing a specific service or expertise/skillset to one or many clients on a flexible basis.
A contractor is essentially self-employed, although for various reasons it is usually best to operate through a limited company structure.
A major attraction is having more control over your career, choosing the companies you want to work with, and the types of projects or roles. There is often the opportunity to work with exciting brands and businesses.
A big plus has always been the freedom to work when and where you want, and not having to commit to being in an office for 40 or more hours a week. (Although in the aftermath of Covid-19 it is likely that we will see some improvement in flexible work practices and the introduction of hybrid work models).
Some contractors do work normal 9-to-5 hours, and many work an equivalent, splitting their day to allow for school runs or other commitments or interests. Others work part time all year round or full time for nine months of the year, taking the summer off.
Putting yourself forward as an expert means you need to be experienced in a role or skill, and on top of the latest trends and technologies. The variety of contracts and different clients means a contractor quickly develops a wide experience base and a variety of competencies, something that just doesn’t happen in a permanent position.
Contractors have more scope to develop their own skills and careers, rather than leaving career progression to the discretion of a boss or HR person who is more concerned with company success.
Not so long ago, a ‘Contracting’ role would be shunned due to lack of security. But the promise of a job for life is no longer a realistic expectation for any worker, regardless of age. Companies cannot give guarantees, as evolving technology and changing roles mean some skill sets are becoming obsolete. Developing a specific skill set or unique knowledge that can be monetised means a better chance of having a steady stream of work. The more experienced you are, the more secure your work stream becomes and ultimately the more you will get paid.
Determining if contracting is right for you requires honest self-assessment, because this way of working is not for everyone. It takes determination to win new clients, to sell yourself and your skills, and to manage work and deadlines efficiently.
If you know you can do the job, and don’t need the boss standing over you, giving instructions and direction, then you can probably consider contracting as a viable option.
There is no specific industry or skill set that is unsuitable when it comes to contracting. Practically any skill set a business or organisation wants can be provided on a part-time, flexi-time or full-time project basis.
Certain roles do require on-site attendance though. In areas such as IT, engineering, pharma, medical and locum work, there is often a requirement to be on-site as a service provider, or as part of a project team.
In Ireland, contracting numbers are highest in IT, pharma, and medical locum services, but there are big opportunities in finance, project management and marketing consultancy too.
One headache that people worry about, or sometimes ignore, in terms of contracting is tax compliance and financial management. Not understanding what you need to do, and when, can mean unexpected tax bills and cashflow problems.
Most contractors operate under Umbrella Companies, some choose to set up their own Limited Companies. Contracting PLUS provide both solutions and a quick call to our solutions consultants will help you determine which option would suit you best. They can be contacted at (01) 6110707. Our advice is to get an accountant who understands the contracting sector and who can advise on everything from company set-up to payroll, insurances, year-end taxes and every other compliance headache.
Equivalent annual salaries are generally higher in contracting, but there isn’t holiday pay, sick leave, pension contributions or other perks, and some social welfare benefits don’t apply. But with good advice and forward planning, these issues can be overcome.
Essentially, contracting allows you to plan work commitments to earn what you need, rather than working all hours to generously donate to Revenue at the top rate.
A common mistake which new contractors can make is not planning effectively. Companies rarely come looking for you to work; you’ve got to go out and find the work yourself.
That means knocking on doors, so treat networking as a necessary tool for professional growth and job security. Develop networks according to your personal and career objectives.
If you are considering contracting, use a recruitment agency to find a first project or client.
Many specialise in contracting, and most will have clients using contractors for different aspects of business.
Set aside funds to support yourself initially, although clients generally pay professional contractors promptly, and payment schedules are agreed before signing up.
Now is certainly a good time to try contracting, as the number of contracting roles increases when there is uncertainty in the market, and Covid-19 has certainly created uncertainty for many businesses. If you start with a six or 12-month project and it’s not for you, you can be in another new contract role or back as a PAYE worker within a year.
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