Blog #2

Blog #2

 22 May 2017

As someone who has worked both permanently and as a contractor both within the past 5 or 6 years, I’ve often juggled with the decision between a permanent position and being a self-employed contractor. Currently, I’m enjoying my time as a contractor having just come out of an 18+ month contract for one client who would happily have me back, and have just started another 6 month contract for another client at the beginning of a project with good prospects for future extensions – a great place to be in my profession.

However, I’m constantly having an internal debate as to how long I want to be doing this before returning to the safety of permanent work. In this blog, I’m hoping to put across my view of the pros and cons of each through my experience.

Working as a Contractor/Consultant

Let’s get the main thing out of the way – the financial benefits are obvious. The take home pay potential for a contractor compared to a permanent employee is probably between 2 to 3 times the amount easily. Also, on paper you are also more in control of what work you do in that you can pick and choose what contracts you want and with which companies. That is, providing you have that option; It’s not always as straight forward as you’d think.

Firstly, you must build and maintain your network of connections – this is an absolutely vital source of work for you. You are also hugely impacted on market conditions. Peaks and troughs of work are inevitable, and you have to hope that your trough doesn’t coincide with a lot of other troughs that are out there as you’ll be facing some stiff competition for not very many contracts.

You also may or may not have already heard of IR35 tax law, but if you’re thinking about contracting it is imperative that you get your head around it as much as you can. Governments have been pushing changes to this for years to try and flush out what they perceive as “hidden employment”.

In April 2017, there were some big changes that affected the contract market within the public sector – probably the biggest providers of IT consultancy work out there. You're also responsible for filing tax returns, maintaining company records, paying your quarterly tax bills and all that other fun stuff that comes with running a business. Paying for a good accountant may initially seem expensive, but they can be the difference between smooth sailing and a very unwanted bill landing through your letter box.

But for me, one of the biggest things you must be aware of is your professional development. The world of IT is constantly changing, and in order to stay competitive you have to be on top of your game with the latest trends, technologies, methodologies, and regulations that impact your specialism. All out of your own pocket.

Working as a permanent employee

A lot of the negative areas of contract work don’t usually matter when you’re a permanent employee. You’ll get a pension scheme, all your tax and financial stuff will be taken care of, and you’ll have access to a vast array of other company schemes.

Professional development is usually a well-structured process, often with financial gain off the back of it. And you don’t have to pay a penny up front. You get job security, you can build strong working relationships with other colleagues, you get to know the ins and outs of a company and depending on your ambitions you can forge a great career path for yourself.

If you find the right company for you, with the right culture and values, then you can be very happy working in permanent employment.

So what’s the best option?

It really all depends on what is best for you and your circumstances. Right now, contracting and consultancy work is best for me. I don’t have a lot of major responsibilities, I’m willing to put in the travel when required if the work is not close by, and whilst I don’t get paid leave, I’m sensible with my finances in that I leave enough left over to cover the breaks I need to take. But who knows what the future will bring?

All I will say now is, do your research. And then do some more. Speak to experienced people on both sides of the argument and ultimately – make the right choice for you. It’s your career, it’s you that must live with the choices that you make.


 

Matt Cook is a North East based Test Analyst who is currently contracting for Airbus.

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