Contracting PLUS managing director Jimmy Sheehan looks at the opportunity, the characteristics of contracting, and the type of people it can suit.
Job markets, workplaces and careers are all caught up in Covid-19 uncertainty, so the flexibility that contracting offers has a whole new appeal for service providers and employees, as well as for employers, just now.
SME owners already have a lot of the skillsets and mind-set required, so a contracting role can be a useful stopgap, an income boost, or a means to re-evaluate business and personal direction.
“Contractors allow businesses to ramp up their workforce, navigate peaks and troughs in demand, or complete a one-off project, without creating a full-time role”
The changing world of work in recent years has seen the rise of ‘talent as a service’ and the ‘contingent workforce’. Professional contractors regularly deliver part-time roles and temporary projects, particularly where specialist skills are needed.
Contractors allow businesses to ramp up their workforce, navigate peaks and troughs in demand, or complete a one-off project, without creating a full-time role.
A flexible workforce also de-risks expansion and innovation. Using a freelance project manager, businesses can accept contracts they might otherwise refuse, that may not promise follow-on work.
So too, freelancers can do early stage innovation, developing or test marketing a product or service. If successful, only then the business scales up, gradually replacing contractors with trained employees for an agile workforce model.
The post-Covid workforce
Remote working and loss of business for some SMEs has prompted many to re-evaluate their ability to ply their trade independently, as a contractor.
At Contracting PLUS, 2020 was busy for new client enquiries, and the first week in January 2021 was the busiest we’ve ever seen at this time of year.
Professional contracting is becoming another ‘new normal’ across Irish business and public services. It suits a lot of industries, and contractors enjoy unique advantages, not least flexibility to work around family and other commitments, and wide-ranging experience.
So, for those considering a leap into the gig economy, here are some of the positives and issues to consider;
1. Job Security
Contracting requires self-marketing and network building, especially online. You can give yourself a head-start by partnering with a good contract recruiter, specialising in your industry skill set.
By working with multiple clients over time, honing skills and experience, and extending reputation, you can create the best type job security possible, as well as giving yourself higher earning potential.
Set aside funds to support yourself at first, and ideally have clients in mind before leaving a salaried job.
2. Work Life Balance
Project-based working and contract breaks allow for free time when needed. Working parents can take off school holidays, recently qualified graduates can travel, and those approaching retirement can still earn an income while enjoying other pursuits.
3. Choice and Control
A big attraction is having more control over your career, choosing the companies you want to work with, and the type of projects or roles. There can be the opportunity to work with exciting brands and businesses where you may not otherwise be considered as an employee.
4. Valuable Experience
Changing roles, projects, and clients frequently allows individuals build skills which would be difficult in a permanent position. Professional contractors find themselves working with new teams, companies and technologies over the course of their career. They learn different approaches and operating procedures, so become more valuable going forward.
5. Business Administration
Multiple clients and different sources of income can be easily managed through one limited company structure. SME owners will be familiar with managing finance, and an accountant or specialist service provider like Contracting PLUS can also help with income and payroll, if applicable, as well as payment of VAT and tax liabilities.
Contractors need to budget for a regular income, optimise earnings and wealth through pensions, and protect dependents with insurance and life cover protection.
6. Suitable Sectors
Most roles in most industries can be provided on a flexi-time or full-time project basis. Certain roles require on-site attendance though. In IT, engineering, pharma, medical and locum work, you generally need to be on-site, as a service provider or with a project team.
In Ireland, contracting numbers are high in IT, pharma and medical locum services and there are opportunities in finance, project management and marketing consultancy too.
Equivalent salaries are generally higher in contracting. But there isn’t holiday or sick pay, pension contributions or other perks, and some social welfare benefits don’t apply. If you’re between contracts or sick, you’re probably not getting paid.
These issues can be overcome however if you plan ahead, schedule work commitments to earn what you need, and have a cash reserve or income protection.
8. Personal Traits
Contracting is not for everyone, although an SME owner knows about going it alone in business and having resilience!
For some, the option of working from home or from different desks is ideal, avoiding office politics and distraction.
But it takes determination to work on increasing your network, winning new clients, selling yourself and your skills, and managing work and deadlines. If you know you can do a job, and don’t need someone standing over you for direction, then contracting is a viable option.
Jimmy Sheehan is managing director at Contracting PLUS, dealing in specialist accountancy, tax, financial advice and umbrella companies for independent professionals. Established in 2002, Contracting PLUS supports clients in the IT, financial services, medical, pharma and engineering sectors, and via recruitment agencies.