Switching Codes: How to move from a permanent to a contract role

Perhaps you’ve been thinking about it for a while. Perhaps the idea has only just occurred. Perhaps the current state of the economy has left your previously secure permanent role feeling vulnerable; perhaps it’s that very security and stability that is making you yearn for a new challenge. Whatever the reason, you’re considering swapping permanent employment for an IT contract job.

Contracting offers many advantages for the right kind of person. It allows you to be flexible, more easily following the best opportunities than a permanent employee can, going where the work is and insulating you from local or temporary variations in the demand for your skills. In addition, it can allow you to use a broader range of skills than a permanent position might. Contracting can provide regular new challenges and a range of personal and social benefits, not least the opportunity to arrange your work to fit your life, as opposed to shoehorning your life into the gaps left by your work commitments.

On the other side of the coin, contracting carries responsibilities and risks of its own. Particularly at first, you must not expect contracts to simply drop into your lap; it takes time, dedication and legwork to build up the network of contacts necessary to ensure a reliable supply of work. Many of the standard administrative tasks such as taxation and pension payments become your responsibility. Above all, you need to be sure that you can give your best effort with no-one to push you but yourself.

This two-part article aims to provide an overview of the switching process, highlighting some of the questions you should ask yourself and the issues you should be sure you understand before committing to life as a contractor.

1. Know Your Strengths

It may seem obvious, but taking a properly objective look at yourself and your marketable skills is a crucial first step when considering contracting. Knowing what specialisms you can offer is one thing; being able to pitch those skills to a prospective employer quite another. Don’t be afraid to think laterally, as experience in one area can often transfer to another. Don’t, however, claim skills that you are not completely confident of – employers and agents know what questions to ask to ensure you are a good fit for the role they’re seeking to fill.

As a contractor, your CV is your most important marketing resource. Keep it up to date and ensure it clearly describes the skills and experience you can offer. Check the tone as well – remember you are not asking an employer to make a long-term investment in you, but are instead selling a specific resource aimed at achieving an identified goal.

Once you have identified your skill set, plan to maintain it. Even more than permanent employees, contractors must ensure that they keep up to date with developments in their specialist areas. Never forget that you will often be asked to ‘hit the ground running’, adapting quickly to your new employer’s working practices and standards, and a thorough and current knowledge of the technologies and techniques you will be using is essential.

You can find more detailed information on assessing and describing your marketable skills in CUK's First Timers' guide for IT contractors. Advice on tailoring your CV for contracting can be found here.

2. Agents of Fortune?

Bottom line: to be a successful contractor you have to find work. Many go into the contracting sector with at least one opportunity already identified – it’s often the spur that prompts them to switch. However, one contract does not a career make (not these days, anyway), so many contractors turn to agencies to source some or all of their contracts.

In some ways, contracting agencies are more like theatrical than recruitment agents. If all goes well, you will over time develop a mutually beneficial relationship. As they get to know you, the quality and fit of the contracts that they put you forward for will improve. Unlike theatrical agents, however, there’s no penalty for infidelity – you can and should develop a shortlist of agencies that you regularly use, and keep the list under regular review, to ensure that you have the best possible access to the available opportunities.

More advice on selecting and dealing with IT contracting agencies can be found here.

3. Interview With The Contractor

As with your CV, you will need to review your interview technique to ensure that it is appropriate to the contracting role. While many of the basics – promptness, smartness and preparation, for example – will still apply, a contracting interview is as much sales pitch as anything else. Your aim is to convince the customer that they should buy from you, by showing that you understand their business and the specific problem that they wish to have solved, and that your skills and experience make you the best person for the job. Don’t become too much the salesperson, though – you may not be working for them, but you will have to work with them, so compatibility and personality will still count.

Guidance on tailoring your interview technique can be found here.

4. Making the Switch

Compared with the other challenges involved, the act of leaving permanent for contract employment may seem trivial – a matter of handing in your resignation and seeing out your notice period before the real work of making contracting pay begins. In fact, the manner in which you make the switch can actually define your whole experience of contracting.

It’s natural to want to keep plans for a change of career close to your chest for as long as possible, and to want to have a ‘safety net’ of confirmed contracts in place before taking the decisive step of resigning from your current employment, but this leads to a delicate balancing act. Leave it too late to confirm your intentions with your employer, and your notice period may well extend beyond the date you hoped to start contract work. This is especially an issue for staff contracted to three- or six-month notice periods, and can leave you with an unpromising selection between breaking your contract of employment, passing up a contracting opportunity, or attempting to satisfy two full-time commitments simultaneously. None of these outcomes are desirable. In particular, breaking your existing contract can mire you in legal complications and threaten your ability to give your new career the attention it requires during the crucial first few months.

Michael Coyle of commercial law specialists Lawdit Solicitors believes the possibility of a smooth exit from your current employment will depend on your perceived value to your employer. “Once the employer receives your notice it is usual for the relationship to sour. Much depends on your status. If you are well paid and a significant loss to the employer then you may find the employer is prepared to obtain a court order seeking equitable relief, which is granted at the discretion of the court by reference to what it regards as fair in the circumstances. The relief will include obtaining an injunction also.”

The best course of action is to include a timetable for your resignation and eventual departure in your plans from the very outset, ensuring that you allocate adequate time for a tidy and professional winding-up of your current role. Depending on your employer, you may be able to negotiate a shorter notice period, or agree a phased handover whereby the final weeks of your employment are worked on a part-time basis.

Michael Coyle notes that, as with other aspects of the switch, preparation is crucial. “Best advice before you hand in your notice is to review your contract of employment and in particular the notice and termination clauses, as well as any restrictive covenants pre- and post-employment. Do not seek to solicit or entice customers or colleagues from your existing employment for at least three months following your departure, and do not seek to remove any of your former employer’s intellectual property or database information at ANY stage. The courts are loathe to prevent someone from starting up in business, so in many instances restrictions will be deemed unfair. However the courts do look at good guys and bad guys and provided you stay on the good side and do nothing to harm the interests of the employer then an injunction is most unlikely.”

Many contract opportunities will expect the successful candidate to start immediately, so it will be to your benefit to have any question marks over your availability cleared up as early as possible. The risk of leaving your current post without a confirmed contract waiting for you can be mitigated by diligent research of the available opportunities and careful judgement of the best time to start submitting applications such that, should your application be successful, your employment end and contract start dates will dovetail neatly together.

Regardless of how confident and committed you feel, it is prudent to leave your current employer on the best terms that you can achieve – particularly as you establish yourself as a contractor, you may need to come to them for a reference. In addition, there is always the possibility that contracting may not work out for you and you may eventually return to permanent employment, in which case your previous contacts may prove invaluable.

In part 2 of this article, we will consider some of the key administrative and business decisions you will need to make, as well as looking at what you, as a contractor, should expect to experience when you turn up for your first day’s work with a new client.

Doug Brett-Matthewson