This is not clickbait!
This article provides real bona-fide information that 1.74m* professionals in the UK have successfully done to triple or even quadruple their salaries, and at the same time given themselves more income security, less red tape and greater job satisfaction.
I am of course talking about “going contracting”.
*ONS Self-Employment Data Oct-Dec 2022, based on classifications J,K,M, N, R, S and T
What is contracting?
Contracting is the provision of your professional services on a temporary or interim “contract” basis.
Professional services simply mean your knowledge and time. In other words, the “regular” job you already do.
As a contractor, you are explicitly NOT employed by the “end client”: the company for whom you are completing the work. A contract is for a specified time period with agreed rates of pay either daily or hourly. With that being said, there is a chance that if you impress the end client and more work is required, the contract may be “extended”, and a new, similar contract issued.
Your contract will usually be between your Personal Service or Umbrella Company (more on this later) and a recruitment agency acting on behalf of the client. In this scenario, the recruitment agency will have a separate agreement with the end client.
Is it for me?
Before I go on, this can be an enormously complex and detailed subject area – there’s a lot to learn! For the purpose of this article, I’m going to assume that you are a complete beginner in this world.
The content of this article is aimed at:
- A “white collar” professional in any industry, currently either full-time employed or recently redundant from such a role.
- Have a “decent” level of experience in your chosen profession – this will vary from role to role but will likely be at least 2 years of experience in newer or emerging technologies or industries, and as many as 10 or more in more established disciplines.
- Based in the UK. Much of the information in this article may be useful across the world, but this is not something I have any direct experience of to be able to advise further.
The pros and cons of contracting
Becoming a contractor is a big decision – and a personal one – but the good news is that for the vast majority with the right mindset, the pros hugely outweigh the cons.
|QUADRUPLE YOUR INCOME |
The big one, and if we are honest the main reason people “go contracting”. This is not an outlandish statement – in most of the industries and roles I work with people who have easily been able to triple (3x) or even quadruple (4x) their take home income
NO MORE (OR REDUCED) POLITICS
SKILLS AND EXPERIENCE
|BE MEASURED BY YOUR OUTCOMES |
I’m not going to mince my words here and you need to be very honest with yourself. If you’re the kind of person who is happy to meander through your working hours, doing just what is necessary then please stop reading. Until you are happy to have the weight of expectation of being measured by – and ultimately being paid by – results, then contracting is not for you. If on the other hand, you are hungry, driven and happy to live and die by the sword then you are in the right place.
As well as being a pro, flexibility can also be negative. To become a successful ‘career contractor’, certainly, if you wish to continually be in a contract role, you are, depending on market demand, going to have to be flexible – possibly work further away from home, take on some responsibilities you might prefer not to, take on a ‘lesser’ role or potentially a lower rate. One of my most popular articles “A Day Rate in Hand is worth Two in the Bush” covers this.
BE TREATED DIFFERENTLY
This one does not apply to every organisation, but jealousy and expectations are part of human conditions and can rear their ugly heads, particularly when money is involved. You’ll need to learn to cope with this.
DEAL WITH UNCERTAINTY
In short, you don’t get any. And when you start working out lost income on top of the cost of that week in Skegness, you’ll realise a weekend in New York is cheaper.
To be a contractor, particularly when using their own ‘personal service’ limited company, the volume of paperwork and admin increases. You can learn to do this yourself, or you can pay someone to do most of it.
Our friends at the HMRC administer some legislation known as IR35 – which, in short, can mean your contract can actually be deemed as employment and taxed in that way, reducing (but by no means eliminating) the financial benefits.
So, you need to have an honest word with yourself and likely your significant other and/or dependents. If you think that the pros outweigh the cons then strap yourself in and start dreaming about what you’ll do with all that extra cash!
Can I go contracting in my industry?
In a word, YES!
You’re going to need to do a bit of research but there is basically a market for contract services in pretty much every industry. Project Partners have worked with contractors in the following industries:
- Business Transformation (any industry) – Project Management, Programme Management, Business Analysis, Testing, Implementation, Subject Matter Experts
- Technology (any industry)
- Life Sciences
- Oil & Gas
How to find your first (and subsequent) contract
There are fundamentally 3 ways to find contract vacancies:
- Recruitment agencies
By far, the majority of contracts go through recruitment agencies. Even when you ‘find out’ about a role through any of the other methods, most companies only contract through a recruitment supplier. The recruitment industry can get a bad rep (in some cases justifiably), so you’ll need to find yourself a few reputable contacts and build relationships.
- Through your network
If you’re not already, you need to get really good at networking. With the explosion of online platforms and remote working, you can easily be forgiven for thinking that networking is less important. I can absolutely 100% assure you that this assumption is incorrect. Networking, and by this I mean forging genuine relationships, is paramount. It’s generally a ‘small world’ out there in your niche and you’ll come across the same people again and again. Therefore, to succeed, you need to be familiar, liked and trusted.
- By client direct advertising
Some clients advertise their vacancies direct, usually via various online job boards. These roles can get a significant number of applications in a short time. You need to be quick and you need to sell yourself. The old adage about getting out what you put in is key. Tailor your application and put yourself in the recipient’s shoes. What is going to make your application jump off the virtual page? Whatever you do, please don’t sit there clicking apply, apply, apply with a generic CV and cover letter. It’s the biggest waste of time and morally sapping. And you’ll be unlikely to hear back.
How do you work out the “quadruple” salary part?
First of all, every job is different. My experience has been gained over 20 years in both Technology and Business Transformation disciplines for a wide variety of clients, predominantly Financial Services institutions. Tripling or Quadrupling your take-home pay is a typical experience, and certainly reflects my own experience.
Calculate your yearly “worth” and then add on the inflated “contractor rate”. It’s not just the work that you’re doing – you also need to take into account the risks associated with not being in a full-time position. Because contractors charge more, if you work the same number of annual hours as your counterparts in employment, the end result will generate much more.
At Project Partners, we offer a number of contractors roles outside of IR35. Allowing you to do the work you love as a contractor, whilst still being part of the Project Partners family. Check out our open roles now.