The Gig Economy: Things to Consider Before Becoming a Contractor
Once upon a time, scoring a salary-based full time job was forefront in most workers' minds. Nowadays, the hunt for independence is on the rise with more people turning to contract work, where they can be their own boss and call the shots.
The gig economy is all about temporary positions and hiring independent workers into an organisation for short-term projects.
What began as a way for niche professionals to capitalise on their unique, highly sought-after skill sets (like IT experts completing complex projects) has quickly turned into a popular alternative to permanent employment. Take a look at Uber, a service driven by a network of mainly self-employed cabbies!
If you have ever thought about leaving your permanent job for a life as a contractor, you are not alone - a recent study estimates that 40% of the American workforce will be freelance by 2020.
When you consider the freedom of working for yourself, it is not hard to see why so many people are turning to a career in the gig economy!
Before you follow suit, learn what contracting is all about...
1 - Show me the money
The question on everyone's lips is always, "will I make more money as a contractor?"
Many workers will earn a great deal more after switching to contract work. IT professionals are regularly offered nearly double the daily rate of a traditional full-time employee. However, the difference will not be this substantial for every occupation, so always size up your market rate first, by using Emolument.com salary benchmarking tool.
2 - Take control
Compared to being employed permanently, as a contractor you can often manage your own career in a more hands-on way. This means having the authority to decide which work you want to get involved in.
Office politics and micromanagement will become less of an issue as a contractor - never again will you be tied to one team on a long-term basis. Even if you find you do not like your new colleagues or manager, before you know it you will have moved on to bigger and better things.
3 - Be flexible
Have you ever missed out on an important opportunity because of work? Ever desperately needed a day-off midweek? Contracted work can often be done at a time of your choosing - so you will likely never be awkwardly caught between work and other responsibilities again (unless you are nearing a deadline).
4 - Secure yourself
A general lack of employment security really puts the 'con' into contracting. Generally, if you are good at what you do, you will be recommended and rehired. However, when companies are forced to cut costs, contractors are often the first to go. Permanent employees are protected by employment law, notice periods and redundancy packages, whereas contractors do not enjoy the same level of security.
5 - Sell your services
Job interviews can incite fear in the most confident of people and contractors have to do them regularly. As a freelancer you will move frequently from one project to the next, and each new piece of work requires you to sell why you are the right fit for the job. Whether this is an upside or downside of contracting will depend on whether or not you enjoy the thrill of a sales pitch!
Either way, you are not completely alone here. This is where having strong relationships with recruitment consultants becomes paramount, as they can look out for new opportunities and help you to pipeline projects.
6 - Get support
As a contractor you might encounter a lack of support in the workplace. Without an HR team dedicated to your well-being or a development plan to support your growth within the company, you can feel isolated.
This is where familiarising yourself with external resources will come in handy. Industry-specific trade associations and professional bodies (such as IPSE) are available to protect and guide different types of workers.
Then there is the admin side of things. You will likely have to set up your own limited company, and suddenly payroll, taxes, insurance and other financials will become a little trickier for you to keep track of. The paperwork will come in thick and fast, from every angle, so you will need to have a slick filing system set-up. Some people even employ a personal accountant to manage this for them, an expense which might just be worth every penny in valuable time.
7 - Perk up (or down)
What about work perks? Forget paid holidays and sick leave, bonuses and pensions - these are all benefits of being a permanent employee. On the up side, you might still be invited to enjoy the Friday office doughnuts. #winner
What will it be?
So now you have an idea of what life as a contractor entails. It requires a certain level of adaptability and flexibility. You need to enjoy being out of your comfort zone and be happy to work independently. It is a career built on unknown possibilities and not for the faint-hearted!
If you think you have what it takes to be a one-man-band in the growing gig economy, why not take the plunge and hear for yourself what all the noise is about?
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