The Wonderful World Of IT Contracting
If you’ve been swallowed up by the world of IT and you’re getting a little tired of staring at the same monitors, tapping on the same keyboards and talking to the same nonchalant faces day in, day out, you should consider breaking away from the nine to five.
While you may have to forego a steady wage, excellent promotion prospects, the camaraderie within your team and job security, you can also happily wave goodbye to the monotony, the lack of enthusiasm amongst your colleagues and the drab environment that you’ve found yourself working in.
Information technology doesn’t have the finest reputation for being a thrilling sector in which to work. While this might be true for the majority of IT managers, help desk assistants, programmers and solution architects, those that choose to go it alone and set themselves up as contractors can find that their work life becomes dynamic and exciting.
Taking on short-term contracts means that you are never working with the same company for longer than six months at a time. In a year, you could find yourself working on a multi-million-pound initiative within a public sector body, training a small firm up on how to use the latest piece of industry software, and working with a logistics company to streamline their processes. The variety within your job will increase tenfold. This leads to better job satisfaction and fulfilment.
Coupled with the improvement in your working life is the financial rewards of such a move into self-employment. While some contractors choose to go down the route of working under an umbrella company, others opt to set up their own limited company.
By undertaking company registration and sourcing an accountant who specialises in providing financial advice to IT contractors, you can reap the benefits of the drawing dividends rather than a salary, and ensure that all of your revenue goes through your company rather than straight into your personal bank account. This will make you more tax efficient and give you a cushion should you find yourself out of contract for a little while.
You might be wondering why everyone in the IT industry isn’t opting to make a giant leap of faith and venture into the wonderful world of contracting. The truth is that it takes a great deal of courage to leave a full time employed position that is secure. Although the daily rate for a contract role can be five times that of a permanent position, there is zero certainty that you’ll actually achieve one.
Competition amongst contractors is fierce. Most people tend to sign up to an agency or two and specialist recruiters will attempt to place their candidates in the most suitable contracts. It’s not unheard of for contractors to be ‘on the bench’ or out of work for up to six or seven months at a time. While you will have a financial cushion to fall back on should this occur, it can still be a nerve-wracking time waiting for the next contract to fall into your lap.
If you’re tempted to make the leap into contracting, you need to start building a network of high-quality contacts. Put the feelers out and explore how many contractors your current firm is using. Try and meet one or two of them for coffee and see what their experiences have been like.
Do your research and speak to some of the specialist recruitment firms that might want to have you on their books. They will give you an honest account of the job market in your area. If you can move nationwide and have a degree of flexibility in where you can work, you’ll have a much greater chance of securing a contract.
London and Manchester have the highest volume of contracting positions to fill, whereas if you live in Dorset or Cornwall, you may find yourself out of luck.
IT contracting is a little bit of a Catch 22. You need to earn your stripes and gain industry-wide experience for at least five years before a company will consider you expert enough to enter into their ranks to complete an IT project on time and on budget. However, by this point, you may have a family, greater financial obligations and you may crave the security and stability of a permanent full-time position.
Only you can decide if the risk is worth it. Many people choose to give themselves twelve months to establish themselves within the world of contracting. If they haven’t managed to secure regular work, they choose to re-enter the job market.
While it may seem like a no-brainer to give contracting a go, set up a limited company and experience the joy of different workplaces, people and jobs alongside a fantastic daily rate if you are younger, flexible and free from location ties, there could also be a sting in the tail.
Financial bodies such as banks, mortgage lenders and personal loan providers deem contracting as a highly volatile market in which to work. As such it can be more difficult to obtain the most favourable rates on financial products.
If you’re keen to purchase a house, but you are contracting, it doesn’t matter how much money you have in the bank and how much you are charging per day for your services. You aren’t on a permanent contract so you could find yourself out of work at any point theoretically.
To banks and building societies, you are a greater financial risk. While it’s not impossible to secure a mortgage, you will find yourself on a higher interest rate and trying to source those home loans specifically marketed to contractors.
The world of contracting is competitive yet thrilling. If you have the courage to enter into a less certain job market, the financial rewards can be great, and you could find yourself with a renewed enthusiasm within the IT industry sector.
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