Considering Contracting?
Many workers have been in environments where there are contractors. They already know many of the differences between employees and contractors. They know that there is a big difference in pay rates and the contractors are not permanent. They usually come to assist in a particular project for an agreed period and may be “extended” if further work is required. In effect contractors are selling their skills in the market place to the highest bidder.
There are several reasons why organisations like to use contractors:
For example:
- They are not a long term commitment;
- They provide skills the in-house team may not have; and
- They are usually more flexible over hours etc. than permanent staff.
The other major reason organisations like contractors is that they save money. If an organisation employs you they have to pay sick pay, holiday pay, redundancy pay and employer’s national insurance. But if they use you as a contractor they don’t have to pay any of this – so they can usually afford to pay you more per hour.
Every contractor has his or her own reasons for liking contracting. Some of the most common are:
- Greater independence
- More pay
- Financial flexibility
- Variety of work and environment
- Personal tax and national insurance savings
- Potential
No method of earning a living is free of drawbacks. You may take a contract, which entails staying away from home, there may be gaps between contracts, and you will be responsible for keeping your skills up to-date. If you don’t use our umbrella or managed company service, you will also take responsibility for running the business and complying with the law.
If you think contracting may be right for you the first step is to test the market to make sure your skills are in demand. Contact a few agencies. Assuming this goes well your next step should be to seek professional advice. Although you may have met a lot of contractors and think you know a lot already, proper advice, taken early will get you off to the right start.
