The Benefits of Contracting
Whatever your industry sector there are numerous advantages to be gained, so we thought it might help to summarise the key ones below. Basically, they boil down to more money, greater flexibility, increased freedom, wider skill development and an opportunity to be seen in a different light by a potential future employer, that is if you ever wanted to go back to the world of permanent employment. However lets face it, there really isn’t such a thing as a ‘permanent’ job or a ‘job for life’ anymore, and some may say that a six – twelve month contract offers as much, if not more job security than a new permanent position within a company.
With employee benefits being reduced, final salary pensions disappearing and salaries being cut is it any wonder more companies are turning to contractors to fulfil positions?
If you are considering becoming a contractor or if you have been made redundant and are finding yourself pushed in this direction, there are a number of reasons why contracting could be a very good move.
The first thing that most people think of is the financial benefits, and these are of course very compelling. For example:
- An average contractor rate can easily be double that of a full time employee, or even more.
- Contractors are paid very high rates due to their skills and flexible nature of the relationship and the fact that many positions can be relatively short-term.
- Depending on your individual skills, the state of the industry in which you work (or the market in general) and the location of a contract, you can command very high rates of pay.
- Contracting through your own limited company is the most tax efficient way possible and isn’t as hard or time consuming as you might think.
- As a contractor, you may be paid for every hour that you work, as well as having the opportunity to work overtime at very good rates.
- If you operate through a limited company you have far better tax planning opportunities which can reduce your overall tax burden and increased your take home pay
- You can offset all of your business expenses against your income to further reduce your tax bill.
For more detail on the financial benefits of contracting through a limited company, call us now on 07402828228
As a contractor you are, in effect, your own boss – something which can be very satisfying and extremely enjoyable! For example:
- Contractors have the ability to be far more independent than permanent employees. You have the freedom to work when you choose, where you choose and for however long you like.
- Changing contract can often be far easier than changing jobs.
- Contractors can take as much or as little holiday as they prefer, most permanent employed people don’t get paid for any holiday entitlement unused during the year, as a contractor you will.
- The company you work for is not your employer, but is instead your client, which puts a whole different flavour on the relationship!
- Contract roles will give you much more flexibility when it comes to agreeing working conditions.
- As a contractor you also have more flexibility over the payment terms that you can negotiate.
- You have the opportunity to develop your career in a way that suits your personal circumstances at any given time.
You will naturally work in a variety of different contract roles and in many different companies, and this will help you to build a unique range of skills and experience. For example:
- Working as a contractor gives you the opportunity to test out other industry sectors to see if you can widen your experience.
- Contractors tend to gain a really good insight into different company cultures, processes, operations and structures.
- Working in many different companies gives you the ability to build up a wide-ranging CV and to establish an extensive list of reference contacts.
- A good contractor will become known within their own field for their excellent work and you may even find that your services become sought-after, rather than you having to apply for new positions all the time.
- As your experience and network grows opportunities will come along with other contractors contacting you with regards to opportunities with their clients.
- Carrying out project work in different organisations and environments gives a contractor the opportunity to develop existing skills and to learn new ones – making you an even more valuable commodity in both the contracting and permanent world.
- As a contractor you will be exposed to many different styles of working, not only in relation to your peers, but also in relation to your managers and your subordinates. This helps you to develop as an individual, in more ways that just your core skill set.
- Depending on the type of contractor you are, you will gain added experience of different types of products and/or services which will all widen your experience and make you more attractive and interesting to future clients.
- Contractors often come into new client organisations as the ‘industry expert’, which is not only a nice position to be in, it also adds to your credibility as an industry professional, widens your experience further and helps increase your daily rate.
- Working for different organisations gives you the ability to advance your career and your knowledge, without being limited by a single employer’s processes, procedures or business ethos.
Other more general advantages:
- Most contractors who leave permanent and go contracting earn more than if they’d stayed in the permanent world.
- Opportunities aboard become that much easier and you become more attractive to clients if you have a broader skill set and experience. Many roles aboard are contract based.
- If you don’t like contracting you can always become an employee again.
- Your clients will see you differently, you will be treated differently. There are still pressures but they are different to those of the employed where what your boss thinks of you as a person can often be the driving force for your career rather than your skill. Managers often don’t see contractors as such a threat to their empire.
- Heck it’s just more interesting and exciting and again if you don’t like it what have you lost?