3 reasons to consider contracting

A study by the American software company Intuit predicts that by 2020 traditional employment will no longer be the norm; 40% of the labor force will consist of self-employed workers, contractors, temporary workers and part-time workers. In 2010 this was around 25 - 30%.

Is contracting for you?

Whether contracting can work for an individual depends very much on their personal circumstances and character. Some people find change stressful. Meeting new people, learning new processes and getting used to new surroundings every time a new contract starts can prove challenging to some.

There is also greater pressure on contractors to hit the ground running and start contributing right from the outset. In contrast, new recruits in permanent roles may not become really productive for three to six months.

The perceived lack of financial stability can also prove difficult. Contractors don’t benefit from paid holidays and other corporate perks such as medical insurance and pensions, although their much higher net income more than compensates for these benefits.

Do you want to find out if you are suitable for contracting?
In the article 6 questions that you must ask yourself, you will find out whether IT Contracting suits you.

Anyway; it is clear that contracting is gaining popularity.

3 reasons to consider contracting

1. Flexibility and variety

Contractors are able to choose their clients and assignments and regularly change them. They also have the opportunity to discover how a company works and decide whether it’s to their liking before committing to a permanent position.

A compliance contractor working at a large investment bank told me: “Finding the right permanent opportunity for me is taking much longer than anticipated, so contract work is a good way to not commit to something permanent that takes me in the wrong career direction.”

2. Increased earnings

The financial benefits are also attractive, especially at a time when compensation in the sector has yet to catch up with pre-credit crunch levels. “Bonuses have not been great in the finance industry in the last few years, so there is a lot less incentive to work in a permanent role towards a one-off annual discretionary payment.”

On top of higher day-rates than employees in permanent positions enjoy, contractors’ tax status can also enable them to take home significantly more net earnings than permanent workers. In some countries, contractors can also claim travel and subsistence expenses and offset these against their tax bill.

3. Improved work-life balance

Contractors can spend the whole year in contract or take time off when they need to. Increased earnings can help subsidise taking school holidays off, learning new skills or indulging in hobbies.

A contractor said that superior contractor rates enable him to earn the equivalent of an annual salary in six months, giving him the opportunity to use the remaining six months of the year to pursue other interests or further his personal development.

Find your IT Contracting vacancy or view which soft skills are essential within IT Contracting.