In this guide, we take a look at the best and worst things commonly associated with IT contracting. If you’re thinking about making the jump or are already working as a contractor, these are the things that tend to come with the territory.
Pros of IT contracting
You will have the potential to earn more income than a permanent employee. Most contractors make significantly more than they did as ‘permies’.
You will have far more freedom to control what work you do, who you work for, and where you work.
The chance to experience a wide variety of projects and industries – and countries, if you’re interested in working overseas.
The chance to learn cutting-edge skills on numerous projects.
You are less likely to be embroiled in office politics (although this isn’t always the case!).
You can take planned breaks between contracts to travel, spend time with the family, or recharge.
You have greater responsibility for your own financial planning, especially if you run a limited company.
The independence contracting affords is a good confidence builder.
You may decide to set up your own business based on your contracting experience, or run it concurrently with your contracting work.
It’s easier to test out different roles and technologies without being tied to one employer.
You’re usually brought in to deliver, not to attend endless meetings, which can mean a more productive working day.
In strong markets, you can line up contracts well in advance – or even pick and choose between offers.
Cons of IT contracting
There is a lack of job security (especially during ‘tough times’). But then again, many permanent jobs aren’t really secure either.
You only get paid when you work.
The tax benefits of working through your own limited company have been gradually eroded over the past decade, particularly with the introduction of dividend tax and off-payroll (IR35) changes.
Unlike traditional employees, you will not receive any holiday pay, sick pay, or other benefits and ‘perks’. You have to pay for these yourself.
You may have fewer choices of where you work and may have to travel more to secure contract work.
You will have more paperwork to deal with (if you have a limited company) – although a good accountant will take this off your hands for a monthly fee.
You will have to negotiate punitive tax laws implemented by successive governments, particularly IR35. With correct professional advice, you should be able to address such issues effectively.
You may have to deal with occasional permie conflict – sometimes permanent staff resent contractors for a) earning more money than they do, or b) being brought in to replace sacked permies.
Alongside the obvious technical skills you already possess under your chosen profession, you will need to develop additional sales and networking skills to help secure fresh contract work.
Some clients and recruitment agents are slow to pay, so it is essential to manage your cash flow carefully.
You may need to chase agents or clients to finalise paperwork or get contracts signed – a frustration if you’re used to smoother onboarding.
During economic uncertainty, the contract market can dry up rapidly, particularly in sectors such as banking or retail.
For most contractors, the pros of IT contracting nearly always seem to outweigh the cons. If you’ve already decided to become a contractor, chances are you have the temperament to take a chance and take control of your own career.
Others aren’t cut out for the uncertainty contracting can bring, especially in tough economic times, and prefer to return to permanent work. And that’s fine too. It’s not for everyone.
