12 Mar Working as a contractor

Have you ever considered working as a contractor?

There are many perks including flexibility, learning new skills, extending your professional network and earning a premium rate. 

In this article, we discuss the pros and cons of working as a contractor to help you evaluate whether it’s the right choice for you.

Why do contract work?

In recent times, we have seen a trend for our clients to offer HSE roles on a contract basis, in preference to permanent employment. This is particularly the case with project roles and roles requiring specialist skills. 

In fact, according the Australian Bureau of Statistics (2018), independent contractors account for eight percent of the Australian workforce and contracting remains one of the fastest growing employment arrangements in Australia. 

So, opening your mind to working as a contractor will give you more choice of jobs.

For some, contract work better suits their personal circumstances and career aspirations. A holiday is often a time to reflect and plan your next move, which could be a job promotion, a new career direction, a career break, and/or career enrichment. The achievement of any of these career goal changes may lie in re-thinking the nature of employment so consider contracting as one of your options.

Of course, everyone’s personal circumstances are different, and you need to consider your current and future financial and life circumstances before you move into contracting. But even if circumstances are not a barrier for you, only applying for permanent positions means you will miss out on the numerous opportunities presented by contract roles.

The benefits of contract employment

To help you decide if contracting is right for you, we’ve researched a list of pros and cons.

• Contracting is perfect if you’re ambitious and get itchy feet from staying in the same place and doing the same job for a long time. It will give you a change of perspective, spark excitement and renew interest if you feel your career is stagnating.

• You can earn more money as a contractor. Typically, contractors are paid on an hourly or daily basis and are paid for every hour/day they work, unlike employees who are paid a salary. The fact that so many people are choosing contracting over permanent employment – and electing to forego basic entitlements, such as paid holiday and sick leave – speaks volumes for the benefits that contracting entails.

• There are also tax breaks for contractors. Find yourself a good accountant to give specific advice about your circumstances but you should be able to claim work expenses such as computers, travel and mobile phone costs.

• Employers tend to value maturity and experience when hiring a contractor, since they want to bring on-board someone who can jump right in and do the job with a minimum of fuss. So being a little older or even over-qualified may actually work in your favour when it comes to a contract role. 

• Contract positions give you the opportunity to sample a number of employers and/or a variety of industries helping you to expand your industry knowledge and experience, your professional networks, and your skills toolkit. 

• Some contract roles offer much sought-after work flexibility including the contracted number of days per week, flexible work hours/times per day and working from home that many permanent roles cannot.

• Taking-up a contract role following a redundancy can provide a confidence-building bridge between permanent roles, especially if you have been with an employer long-term. A contract opportunity will allow you to re-discover portable skills and gain an immediate sense of achievement. 

• Accepting a role that is designed to last for a fixed amount of time either short-term (three to six months) or longer-term (more than 12 months) has its benefits. It gives you the opportunity and flexibility to plan your next role and gives you back time to enjoy other aspects of your life such as spending more time with your family, engaging in sporting activities or volunteering.

• What matters most in a contract position is that you deliver results. You don’t need to get as involved in workplace politics or being hampered by normal workplace admin, meetings or employee practices. 

• Delivering on a successful contract gives you the chance to impress the employer and this may lead to an offer of permanent employment or on-going contracting opportunities.

Taking all these benefits into account, contract work is definitely something to consider.

Is contracting for everyone?

No, contracting is not for everyone. 

There are many reasons why contracting may not suit you and your circumstances.

• Banks are risk averse and haven’t embraced the gig economy. They view contract work as higher risk than permanent roles and may be less willing to lend you money. So, if you want to apply for a loan, stick with permanent roles.
• As a contractor, you don’t receive the same entitlements as employees. That means no sick leave or holiday pay and in some cases, you will need to pay your own superannuation (if you are invoicing your client as a consultant). For more details about your legal entitlements as a contractor, visit the Contractors page on business.gov.au.
• To be a successful contractor, you need to embrace change and be a self-starter. You have to quickly settle into a new role, form relationships with stakeholders in the business and deliver results. This style of work doesn’t suit all personalities and you need to honestly appraise whether you can thrive in this situation.
• You can find yourself out of work between contracts. This isn’t necessarily a deal breaker but it does mean you need to budget and manage your money carefully so you can pay your bills between contracts.
• You may be regarded and treated differently to an employee. For example, some companies don’t invite contractors to company events like Christmas parties. And some staff may regard you as an outsider to the team, particularly because you are only there for a short time. If you’re offended by this, then contracting might not be right for you.
  

There are many pros and cons to contracting. You need to weigh up your situation, personality, career and life goals and decide if it’s right for you.

Interested in contracting but undecided?

If you’re undecided about whether contracting is the right thing for you, then call us for a coffee and a chat. We’ll discuss your career, personal circumstances and talk you through the contract roles offered by our clients. This will give you the information you need to decide if contracting is right for you.

Want to learn more?

Read:

• ABS Workforce Report – Characteristics of Employment, August 2018
• Contractors (information provided by the Australian government)