Contracting isn’t for everyone, for the majority who make the move, contracting proves to be a wise and satisfying move, although – like all careers – there are likely to be challenges along the way.
Contractors come from all walks of life, however, there are a number of characteristics you’ll need to possess (or improve) to become a successful long-term contractor.
- Are you a self-starter? – Contractors are responsible for finding their own work, and dealing with renewals. It can take a while to become adjusted to this new way of life, particularly if you have worked for the same employer for a long time.
- New environments – Contractors are expected to join projects and rapidly get up to speed with the client’s requirements, as well as acclimatising to new groups of people and locations.
- Dealing with finances – Whatever business structure you work under (your own limited company, or an umbrella company) you will need to spend some time dealing with your financial affairs and budgeting.
If you go down the limited route, a specialist accountant will take away most of this burden for you, however, you must ensure that you meet your tax obligations in full, and on time. The administrative burden is lower for umbrella employees; however, the limited route is more tax efficient.
- Contingency Fund – Contracting can bring its own share of uncertainties, particularly during recessionary times. From the start, you should avoid the temptation to spend all your contract earnings, and set aside funds for a ‘rainy day’, when you may find yourself on the bench.
How long could you survive without contract income? Try to set aside at least six months’ living expenses in a savings account.
- Networking – A large proportion of contract roles never even reach the job boards, or recruitment agents. If a vacancy comes up in a project, contractors working in the team may be asked if they know anyone suitable to fill the role. For this reason, you should try to keep in touch with old colleagues, and thanks to LinkedIn, networking has never been easier.
- Skills – Alongside the traditional economic rules of supply and demand, your skillset is your most powerful tool for securing the most competitive rates. As a contractor, it is your responsibility to keep your skills up-to-date, and you will have to pay for any additional courses yourself. Also, make the most out of online learning – which is ubiquitous these days.
- Negotiating – Although you will undertake contract work on a fixed-price basis, there is usually some room to manoeuvre when setting your initial rate. Clearly, you will need to assess your situation carefully when pushing for a higher rate, as your position of strength will depend on the level of competition for the role, the economic climate, and how much the client wants to hire you above other candidates.
- Become an Expert – Contractors are hired for their expertise, so you will be expected to demonstrate your abilities from the off. Although the temptation may be to keep your knowledge to yourself and just get on with the job, you will gain kudos and respect by offering help and guidance to colleagues. If you develop a reputation as the ‘go to’ contractor, renewals and word-of-mouth recommendations are more likely to come your way in the future.
- Flexibility – A very important trait of the successful contractor. You may have your heart set on a particular type or role, or location, but the whims of the contracting market may scupper your plans. You need to be prepared to travel, and undertake contract work which may not fit your ‘ideal’ in terms of interest, industry or the skills you use.