Contracting: Do You Know the Risks and Rewards?

 

Angela Dawson, IT Contracts Director at Concept Resourcing writes about the rewards and risks of life as a contractor.  

 

The demand for contractors reached an all-time high this year as more industries try to fill gaps in their knowledge by hiring temporary but highly skilled workers. In fact, contractors now make up 15% of the UK’s workforce. With so many opportunities to take advantage of, particularly in the IT contract market, it’s hardly surprising that there has also been a rise in the number of people leaving full-time employment to pursue contract work instead.

However, while it can be a fantastic alternative that offers plenty of benefits, contracting isn’t for everyone. This is why it’s so important to consider and understand all the perks and challenges associated with this line of work before making the leap.

The Rewards

Flexibility

Having more flexibility at work is something that many of us can only dream of. But for contractors it’s very much a reality. They have the freedom to pick where they would like to work, whether it’s in a different city, country or from the comfort of their own home. They also have the option to choose when they want to work and for how long. Some contractors choose to work 52 weeks of the year whereas others prefer to fit their work around their family life. This flexibility is the reason why a high percentage of contractors feel they have a much stronger work-life balance since leaving full-time employment.

An Increase in Pay

It’s almost impossible to talk about the benefits of being a contractor without mentioning finances. Contractors have the freedom to negotiate their rate which can often be double or triple that of their full-time employee equivalents. They can increase their rates even more if they take part in niche training to upskill and keep their knowledge current. This effectively means that if you choose to be a contractor you could work less but earn more, which is a bonus for those with families.

More Variety

While having a pay increase and more flexibility are both fantastic advantages, variety is often what contractors say is the best part of their job. They can choose assignments that interest them and work with clients from varying industries which stops their job from becoming too repetitive and mundane. Another bonus is that they are meeting new people on a regular basis, which also adds some diversity into their working week.

The Risks

Not securing regular contracts

One of the biggest challenges faced by contractors is being unable to secure a new contract once their current one has ended. Without a contract lined up, they won’t get paid-which is understandably a big concern. There are countless reasons why contractors don’t secure new assignments from a lack of opportunities in a particular sector to not having the necessary skills. While this is challenging, you can increase your chances of obtaining a constant stream of assignments by regularly networking and by developing a good rapport with a recruitment agency.

No safety nets

As well as not being able to always secure contracts when they want to, contractors can also experience a lack of security in other areas. They don’t have the safety net that full time employees have such as sick pay, nor can they take advantage of company benefits and pension schemes. The contractors are solely responsible for managing their business and finances, while also looking after their physical and emotional wellbeing. If you find a lack of stability unnerving, this might not be the career for you.

Increase in competition

As the stigma surrounding self-employment has lifted, the number of people choosing to become contractors has increased substantially. While this is fantastic in one sense, it also means that there is more competition for contracts than ever before. This can make it harder to get assignments that suit your lifestyle and you may have to relocate or commute long distances. One of the most beneficial things a contractor can do is get training in areas that relate to upcoming technologies and industries. This not only shows initiative, but will also help you to stand apart from your competition.

Still considering entering the world of contracting? Now you know more about the possible risks and rewards involved, you should be able to make a more informed decision about whether it’s the right career change for you or not.

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