To Go Contracting.. or not to go Contracting...?

[Idealpeople]

To go contracting or not to go contracting?
January 25th, 2008 Source: Idealpeopleblog

We frequently get enquires from IT professionals who are considering ditching the permanent job and going Contracting. Just last week, we were asked to draw up a list of pro’s and cons for one particular individual, so we thought we’d share our advice to the wider community. So over to our Head of Contractor Services, the right honourable Donald Pollock to explain some of the benefits….and some of the pitfalls.

A lot of IT Professionals are attracted to contracting without really knowing what is involved and what it really means to be an IT Contractor. Quite simply, money drives us all and the thought of money lures IT Professionals away from the perceived security of Permanent employment to Contracting. There is a big, big difference between a perm salary of say £40,000 and a £400 per day rate, which is arguably the Contracting equivalent (and works out at circa £96,000 per annum, assuming you take 4 weeks’ holiday). Sometimes, money speaks.

It is true, as a contractor you can earn a lot of money, but as with anything in life there is a trade off and it’s not just the obvious things like the lack of employee benefits, holiday pay, sick pay, training and superannuation that you need to consider.

As a contractor you are expected to be an expert, a trouble shooter, a hired gun if you like. You are there to do a job. Do it well and do it quickly and you will be highly rewarded. Longer hours and higher expectation is not generally something that ‘new’ contractors take into account and they need to.

A Contractor must expect to work harder than their permanent colleagues - at the end of the day you may be getting paid twice as much as them!!

So you don’t get any employee benefits and you’re expected to work longer and harder…..so why contracts?

“Why do you want to contract?” is something that I ask all candidates. The general response is “I want more money”. When I hear that I cringe.

Contracting is not about money - well it shouldn’t be and it usually isn’t! A good contractor isn’t motivated by money alone. A great contractor is also motivated by:

- Prestigious projects
- Personal reputation
- Achievement
- Job satisfaction
- Job variety

These are the things that motivate a true contractor. The money is a recompense for their effort - not a major factor in their decision to be an IT Contractor.

So is contracting for you?

LOL - Given you are on this forum, we assume you are contracting already, but we'd love to hear comments on the above from you seasoned campaigners out there.

Why are you in the game? Money? Prestige? Variety?

We'd love to find out

[swamp]

A good contractor isn’t motivated by money alone. A great contractor is also motivated by:

- Prestigious projects
- Personal reputation
- Achievement
- Job satisfaction
- Job variety

Really?

Prestigious projects -- we don't often get much choice about which projects we work on; economics dictates we take the first (or second) contract we're offered. Besides, is the NHS a 'prestigious project'?!

Personal reputation -- this can help to get work, but it's certainly not a motivator. References are rarely used, and at the end of the day I only really care what my company shareholder(s) think of me

Achievement = day_rate * num_days_worked - tax.

Job satisfaction -- this is a bonus, but we don't get much choice in the matter.

Job variety -- ditto.


After money the most important things to me as a contractor is being my own boss, being in control of my career and not being too subservient to some 'boss' or general 'corporate culture'.

[Gonzo]

Where I am, the contractors take on the projects that the permies do not want to touch with a bargepole.

That is because those projects are too difficult, too unpopular, and would not do their reputation within the organisation any good.

[Francko]

After money the most important things to me as a contractor is being my own boss, being in control of my career and not being too subservient to some 'boss' or general 'corporate culture'.

I would probably say that this is the only factor. I would have no problem doing the same job for 20 years at the same company. I just cannot stand the hierarchy setup for career progression and the domination/submission attitude and discipline that you are expected to have as a permie. As a matter of fact many of my permanent employments do last less than a year because I just get sick of that. I don't want to obey, I don't want to command, I do my own job, I can help giving directions and take on responsibilities needed but I am no inferior/superior to anybody. I don't need anybody to tell me to work hard, I do it because of the innate sense of duty. I get no motivation in their poor attempts of management/motivation. I agree that not everybody is like this and some people do work only if somebody is pushing/rewarding them. But again we are not all the same. The money is not a discriminant. To get a high rate is not a matter of skills but you have to be a darn son of a b1tch with no morals and scruples. If you have this skill, you'd be making a lot of money as a permie too, though you have to do the calculation in a longer term and including more details in the picture.

[Troll]

Why are you in the game? Money? Prestige? Variety?

• Money
• Master of my own destiny
• Money
• Not bothering about dickwad permies e.g. sasguru types
• The thrill of 'the next contract'
• Money
• No bulltulip 360 reviews
• Did I mention money?

HTH

[Denny]

Upside:

Work life balance is better as you can choose when to work
I enjoy the field I specialise in
Can choose what projects to apply for
Mistress of own progression
Money

Downside:

Tax planning is impossible. You are either ripped off by the government with double NI contributions plus PAYE on nearly all of the rest of your income or you run the real risk of being accused of illegitimate tax avoidance (whatever that means). There's nothing in between, unless you can operate as a sole trader or PAYE employee through direct clients or the EBs that source you (and most EBs won't operate that way).

Being out of work. You need to have to sustain yourself. Contracting is a mindset and an attitude it's not just about not being employed by another organisation. So stock up on baked beans and buy a bicycle in case there's a downturn.

Unless you have an impressive network of contacts, are single or without kids and a small mortgage or you are part of a couple with a partner who also earns, preferably in a different field or in a safer job, forget contracting. Otherwise, you might find yourself on desparado street if you don't get the constant flow of work you need to sustain your lifestyle. Marriages can break up during economic downturns when you are much more likely to get axed as a contractor than as a permie - and there's no redundancy payoff either.

Depending on your own risk profile, contracting is not necessarily the no brainer best or easiest option for those with high mortgage and stay at home partner with kids. Particularly now that ir35 exemption is more tenuous. A good middling or senior level permie job paying £50K upwards and great benefits with prospects and a good pension is a more viable option.

[NotAllThere]

...the right honourable Donald Pollock...

Is he a member of the Privy Council? Or a baron?

...LOL...

Why do I contract?

• Not having to work long hours. (In contradiction to the article). There's a straightforward, honest relationship with my clients. They pay, I work.
• Many more holidays than permie, days off when I feel like it. Last year, 12 weeks, while in year long contract.
• No HR involvment - appraisals, career development
• Recipient of more respect than most permies
• No office politics - you can get drawn into it, though, if you're not careful.
• MORE MONEY

Downside

• Often having to work away from home/weekly commute
• Having to prove yourself again, with each new client (not so much now I'm known within my field)

[NotAllThere]

...To get a high rate is not a matter of skills but you have to be a darn son of a b1tch with no morals and scruples...

That's a bit strong. Got turned down for a rate rise, did you? Or just get into the wrong skillset?

My experience, in, ahem ".net", both as a hiring manager and a contractor, is that the more skilled people get paid more. Immoral, unscrupulous people tend to be client permie managers.

[threaded]

A Contractor must expect to work harder than their permanent colleagues - at the end of the day you may be getting paid twice as much as them!!

What is this 'work-harder' thing that people always seem to compare contractors and permies? It's like comparing apples with oranges! In my experience it is not about working harder, it is about being able to do the tasks offered to you in the first place.

“Why do you want to contract?” is something that I ask all candidates. The general response is “I want more money”. When I hear that I cringe.

Of course you do dear, you go to work for the sheer joy of sharing a cramped 2nd rate office in a 3rd rate location with a bunch of similarly gel haired freaks, but it's called a capitalist economy. It's been around for a few days now, and will probably last a good few months yet.

Who is this "idealpeople" plank? Another of these pathetic trolls just coming to wind us all up for the weekend to gain some sort of vicarious amusement?

[malvolio]

You've all missed the one thing that scares permies off contracting - that at any random point and with no warning you will be out of work with no income and no immediate prospect of one.

If you can't hack that, or think you have some sort of right to get paid for not working, you shouldn't even think of going contract.