Benefits of IT contracting Part 2: A contractor's view
Earn loads o' money
Let's look at the reality of the earnings. Just what is contracting worth? We have all heard of, or even met, software architects on thousands of pounds per day, but what's the reality of the jobbing contractor in the middle or at the start of a career?
Don't start rubbing your hands together just yet. While doubling your salary might sound fantastic, in reality the taxman takes his slice, and contractors are responsible for their own benefits like pensions, death-in-service insurance, redundancy pay, holidays and sickness.
For most purposes, to get an equivalent salary, one should consider the hourly rate a contract might pay, multiply it by the number of hours worked in a week and then by the number of weeks worked in a year (remembering bank holidays, time off, illness etc). As a rule of thumb 45 working weeks per year is a good average, and 40 hours per week makes a standard, professional week for the purposes of establishing average salary.
When all things are considered, difference in take home pay is not so marked as the headline rate suggests. However, you are in charge of your income. You may work longer hours, or find a better rate for your skills and you can choose which companies your work for and for how long.
Be your own boss
You can run your business to make a financial gain over permanent employment, or you can run your business to give you more interesting technology to play with, more time with the children or more international assignments.
You are in charge of your own company's goals and your own mission statement. You might give yourself a tag line "providing the best software development for self fulfilment and benefit of my clients while still pursuing victory at the international air guitar championships," but you can change the goal as your personal circumstances warrant and as soon as the previous goal becomes tiresome.
No company handcuffs
Changing goals is not so open to permanent employees. It's surprising that even young people can be heard making excuses about their pension payments, or their accrued options plans when the conversation turns to becoming freelance. The conversation goes something like this:
Contractor: "This place is so badly run and the conditions are terrible. I can't understand why you stay here."
Permie: "It's not so bad. It's only 15 years until I can take early retirement and if I stay for another five years I get complimentary tickets to Euro Disney – for me and the kids – and an extra 2 days holiday a year."
Contractor: [stares in disbelief.]
Underlying this is that companies don't like losing IT employees, not even the disaffected pension-waiters and they will bribe them to stay. Employees are expensive to recruit, train and take many years to become fully conversant in all the company politics so that they fit smoothly into company operations. Consequently businesses offer escalating rewards for long service and experience. Company handcuffs might include:
• Early retirement
• More holiday for longer service
• Promotion promises
• Escalating pension contributions
• Share options after so many years
• Rising death in service benefits
• Keys to executive washrooms (though unlikely for scruffy IT types).
If you are a contractor already, you will know these ruses for what they are: jam tomorrow. Nonetheless, they keep many permanent staff at their desks and away from recruitment consultants, but while they reduce staff turnover, the people that remain are usually unhappy and unmotivated because they are no longer in the job by choice. They have sold their freewill for a thin smear of preservative.
Contracting is all about choice
A contractor is not forced to stay at the desk by some sly company scheme, instead you are paid more than permanent staff so that you can purchase your own similar benefits or simply blow the lot on Tequila, lemons and your own pile of salt; as you wish.
Avoid company politics
Not being permanent confers other advantages. Permanent members of staff complain bitterly about the number of meetings they have to attend, and sea of politics in which they swim – sometimes hunted and sometimes hunting.
Much permie politics is to do with the hierarchy. Who's whose boss or superior? Who has the most technical knowledge? Who can eat the hottest curry on a Friday lunchtime? The aim is to gain favour with superiors in time for the next wage increase and to lever yourself into an assumptive role where you are the natural candidate for promotion. All very tedious, and although only a minority play the game they stir-up irritations for everybody else.
It is particularly annoying when you are the best technical whiz, but the best politician gets the promotion or opportunity. Permie political tactics include:
• Spreading of misinformation
• Applying "need to know" policies
• Strictly controlling meeting attendee lists
• Scuppered communications
• Taking over activities when others are on holiday
• Secretive and afraid of open forums
• One to one meetings
• Blind copy emails
• Great big long CC lists on emails
But contractors can avoid most of this and belly-laugh from behind the paper-thin partition as permies engage in ridiculous manoeuvring over 3 percent pay rises and team leader positions as Mark Truman, a contract business analyst for over 15 years, explains, "It's great going into the office without caring about the restructure, what effect the share price will have on my company share options, what the latest CEO message is or what is available in the staff canteen."
Truman believes contractors can ultimately gain advantage from the political fray, "Not wanting to climb the permanent job tree is a distinct advantage when it comes to explaining problems and suggesting solutions, and provided you get something in kind. This might be an extension, pay rise, flexible working hours, pub lunches, desk by the window. There's usually some benefit to be had."
Your power play is to leave
None of this is to say that contractors are immune to politicking themselves, but it's easier to avoid and it's not so critical to the career path if you can down-tools and move onto another contract without damaging your CV.
Contractors are subject to permie-envy, they are overlooked in email lists and meeting invitations even though they are best able to understand the issues. And contractors can fight among themselves for peach roles within a project – they can even play the same tricks permies get up to. Yet in the end, when you are an IT freelance, the politics is always less important and will cease when the contract ends.