Choosing a contractor’s life is very different to what you’ll have been used to in employment. One of the main changes is you no longer have a boss, you’re only accountable to yourself and therefore you need to have a lot of self-drive and motivation to get it off the ground. The future of your career is solely at your feet and therefore there’s no time to coast along, you’ve got to really throw yourself fully into it.
Working as a contractor means you work under contracts for other employers for a fixed period, usually until a specific project is completed. As a contractor you need to sell and promote your skills and time to attract employers. You may find yourself paid an hourly rate or you may find projects are paid as a set fixed fee – in many instances there is room for negotiation.
Why choose contracting?
There are many benefits to becoming a contractor, many individual to the person in question. Some of the main benefits include:
Being your own boss – there’s no one to answer to except yourself
Increased money – contractors are usually paid more than employees as they’re hired for a set period so cost the company less in the long-run
Organise your own time – if you want to go on holiday you can and if you don’t want to work Mondays you don’t have to. You can build your work around what works best to you.
Reduced taxes – with the right contractor accountants it is possible to maximise your earnings and arrange your taxes in an effective way to pay less in total.
Varied days – as you move from company to company you’ll see a wide range of different business types, models and enjoy a different experience every day. It will have a positive impact on your CV too as a variety of different types of experience makes you a more attractive candidate for future tenders.
Why do employers choose contractors?
As a contractor you need to be able to sell yourself as a viable investment and there are many reasons why a company may choose to use a contractor including:
Better value – though contractors fees are increased their time at the company is usually much shorter than an employee so it works out cheaper. Equally contractors won’t be paid sick pay, holiday pay or pay their NICs – that’s your responsibility.
More flexibility – contractors are usually more flexible with their working hours than permanent employees
Easier to manage – contractors are easier to bring in and out of projects as and when they’re needed. An employer can hire a contractor for a single day, a week or for project duration.
Enhanced skills – contractors bring in skills which may be more specialised than those already in the workplace.
Why contracting might not be for you
Contracting is a great choice for many but it isn’t for everyone. There are a small number of negative points to consider. Firstly, becoming a contractor provides you with less security than working as an employee. You’re not protected in the same ways and as above, are responsible for your own sick pay, holiday pay and national insurance contributions. Secondly there’s the uncertainty between contracts as there is never any guarantee of more work and it takes considerable time and effort to build up your reputation to receive a steady stream. Finally, contracting involves a great deal of administration on your side, especially when starting up. You’re responsible for your own accounts, records management and all the other administrative duties that come with running your own business.
If you’re convinced contracting is for you then begin your in depth research, speak to specialist contract agencies and get in touch with a good contractor accountant. If there is a clear market for your skills as a contract then go for it!