Top 10 home truths of IT contracting in 2024

I sell my soul in this article for the relief of getting 10 home truths of IT contracting off my chest; some of them candidates won’t want to hear but more of them are secrets agencies like us really don’t want you to know, writes Matt Collingwood, boss of tech staff firm VIQU.

1. The CEO badge on your CV/LinkedIn profile won’t connect you to your IT role

First, we need to talk about something that was broached just last week on ContractorUK.

It’s also something you’re not going to want to hear if you’re doing your utmost to demonstrate outside IR35 everywhere -- the rise of one-person limited companies using corporate- sounding job titles to impress!

We are seeing ‘CEO’ and ‘Managing Director’ come up more and more when limited company contractors come forward.

Kudos for the entrepreneurial flair, but hold your horses! Yes, it might stroke your ego, but if you’re relying on the recruiter to secure your assignment, you’re making yourself unsearchable with these terms you’re using!

Sure, for HMRC and the family BBQ chitchat, you're the self-employed maestro, totally in business on your own account.

But when potential clients are looking for a 'Network Engineer,' they're not out there searching for ‘CEO’ or ‘MD;’ they are searching for ‘Network Engineer.’

Likewise, when recruiters and HR folk are searching their CRMs and reviewing CVs, they’re solely word-matching industry keywords, and job titles.

So, if you want to be found by IT recruiters and HR professionals, use the functional tech title which best matches the gig you're after. Or don’t, and have a tiny outside IR35 signpost, in return for potentially no work whatsoever because you won’t be found!  

2. Brace yourself for big contractual risks, even liability, if you go direct, post-agent

Most agencies have a process to look at what you’re doing and where you are once your assignment with them has finished.

Put another way, the agency is waiting to see if you breach your contract. Agency tricks in this area can include:

  • Emailing you at your ‘old’ inbox to see if there is a read-receipt.
  • Calling the client’s office and asking for you by name.
  • Looking for updates on your LinkedIn profile and CV.

To also catch Joe Contractor working somewhere they contractually shouldn’t be, I’ve even heard of agents calling the end-client’s accounts payable department and asking if they’ve received an invoice from ‘them’ – because they lie, claiming they work for the contractor’s limited company!

The crafty agent’s thinking here is; if the client has an invoice on their accounts systems from the contractor’s Personal Service Company, the contractor has obviously supplied services directly.

Be aware, it’s highly likely that there will be a restrictive covenant of six months in your contract.

So if the recruiter believes you have contracted directly during that period, they might very well pursue you for their lost margin/profits.

Although you can certainly ask, agents are highly unlikely to agree to remove such a clause and release you from its obligation.

I’ve known contractors who close down their PSC, on the thinking that the agreement was between the agency and the contractor’s PSC – not them as an individual contractor. However, the agent can then pursue the client whom they will have the same restrictive covenant with for lost margin, which can sour the contractor-client working relationship and impact one’s reputation in the market.

If you do want to contract with the client directly, know your contract and the restrictive covenants. I’ve seen court orders as high as £20,000 for contractors who have been caught out.

3. Know there's a place for you on a WhatsApp group of ‘problem’ contractors

I saw a reliable stat recently informing that the recruitment sector has a 43% annual staff retention -- so it’s clear that recruiters do move around quite a lot.

As salespeople, a recruiter’s 'commodity' is their contractors and as such, they know the names of the good guys, and also those who they suspect might have caused them some sort of issue.

I have heard lots of tech recruiters begin their sentence with, “Watch him because…”

So although fortunately for some candidates, there isn’t a TripAdvisor or Glassdoor for contractors, agents will naturally spread the word.

If you have conflict with your agent or screw up, come clean and try to mediate a resolution or at least clear the air. Don’t go to war as you could end burning lots of bridges. In fact, I was once invited to a WhatsApp group of recruitment owners that was set up with the sole intention of disseminating the names of perceived ‘problem’ contractors. This clearly emphasises that the risk of being blacklisted is real.

4. Signatures ain’t everything -- and agents like to chase all the way to court

Sadly, I’ve had several encounters in my career where a contractor has walked out of their assignment mid-contract because something better cropped up.

I accept the desire to earn more or get access to better work, but it should not be to the agent or client’s detriment.

In a number of these walkouts, the contractors have gloated, “Well, I didn’t sign the contract.”

Now, I’m not a solicitor, so I’m not giving advice, but a contract does NOT need to be signed to be accepted -- and there is case law around this.

By turning up for the contract, providing services, and getting paid, you may have accepted the contract by your conduct.

Don’t try to be a know-it-all here; whether you’ve signed the agreement or not, think of your professional obligations.

In one example of a walkout contractor who I know, they were found to have breached their contract and got pursued for thousands of pounds in court. And yes – the contractor never actually signed the agreement. 

5. You can very likely negotiate up your rate just before your contract start date

Recruiters will aim to agree on a rate when they approach you about a temporary assignment, in their very first telephone call.

They will remind you of this rate when they offer you an interview and during post-interview feedback. When they offer you the job, this fourth mention of the rate will be the final reminder.

Now, I’m not condoning this or encouraging it, but 90% of the time in the examples I’ve seen, at this fourth and final stage, when contractors have at the last-minute, re-negotiated their rate upwards, the contractor succeeded in securing the monetary add-on!

Why? Because as far as recruiters are concerned, they’ve done the work (possibly pitting their contractors against other agencies’ CVs), and the client has identified their contractor as the preferred option. In the recruiter’s head, the deal is done.

So when the contractor has asked out of the blue for an extra 5% on that pre-agreed rate, the agency will cave on the rate rather than lose the deal. With the average agency margins being between 20% and 15%, they’d rather get 10% than nothing.

As a recruiter, I can tell you it definitely leaves a bitter taste in the mouth. So yes, there’s a time and a place when you can get away with it, but do consider the long-term effects. Recruiters talk so you can bet you won’t be that recruiter’s (or their colleague’s) first pick to put in front of a client next time around.

6. Understand that a contractor with less options is a more desirable contractor

There are two reasons why recruiters ask contractors what else you’ve got on the go during the recruitment process.

  • They want to know WHERE you’re interviewing, so they can introduce their own contractors and weaken your chances.
  • They are evaluating the chances of placing you, versus the risk of you landing something else sooner.

If a contractor told me he had three interviews versus a contractor who had nothing, I’d likely push the latter forward, as he’s got fewer options and I’ve got a better chance of placing. So even if you have 10 interviews / offers on the table, if a recruiter asks you, don’t show your hand. A contractor with less options is a more desirable contractor.

7. Don’t sit on your laurels to a promise of extension

Yes, the recruiter who placed you in your current contract might be saying that an extension is imminent, but this could be a false promise.

Besides the fact you could land a better assignment by being proactive, most agencies check the job boards and have alerts, so they’ll probably see that you’re ‘on the market’ and have updated your CV.

Any suggestion you’re looking or being approached or might not be around, will motivate your agent to do their job and confirm an extension.

It also positions you nicely to say you want an increase in your rate now you have other options to consider.

8. Pre-interview stage reference request? Something’s off

Any reasonable agent will expect references (when required) upon an offer.

But seemingly random demands for references before the offer-stage, suggest you’re on the precipice of being a victim of lead-generation and maybe, that the role doesn’t even exist!

I recently shared some tips for IT contractors on agency references, and how to know legit reference requests from dodgy ones.

9. Push out any ‘pay when paid’ clause

This a common clause in contractor contracts.

It means the agency can pay you when/if they get paid.

So actively look for it, and ask for it to be removed. Someone has to take the risk of non-payment - for example, the end-client going into administration. But this nasty clause means you carry that risk, not the agency – and it’s the agency which should be the one monitoring the client's credit profile.

10. If you’re happy and you know it’s due to your agent, clap your hands in their direction!

Agency recruitment? It's often a thankless job!

Most contractors will never see the soul-destroying months and months of cold calling that go into pulling a new client into the agency’s portfolio.

For all the bad recruiters in the market, there’s still a number of us hardworking and ethical agents too. Saying thanks, or just making the odd acknowledgement can go a long way.

Monday 26th Feb 2024
Profile picture for user Matt Collingwood

Written by Matt Collingwood

Matt Collingwood is the Managing Director of VIQU Ltd. an IT recruitment and project-based consultancy company with offices in Birmingham and Southampton. Matt is also the co-founder of the Recruitment Canaries, a network of West Midlands based recruitment agencies who encourage collaboration, best practice and upholding the standards and ethics of the recruitment industry.

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