4 ways contracting will improve your life
Working as a contractor isn’t for everyone but for those who take to the contracting lifestyle, it can mean a profound increase in their overall well-being.
There are lots of perks to taking on contract work, especially if you have identified how to sell yourself in a competitive freelance marketplace.
Becoming a contractor is relatively easy, especially if you want to start out working under an umbrella company, where all your tax and wages are managed for you.
If you find that your permanent job is getting you down and you’re starting to look to the future with a sense of dread rather than optimism, it could be time to change up your working life. Contracting allows you to move towards a way of life that supports your natural sense of adventure and entrepreneurial spirit.
Making a significant change to your working life can be scary, but it’s important to remember that even permanent jobs sometimes only give the illusion of security, as anyone who has experienced a surprise redundancy can tell you.
So what’s stopping you from taking the plunge? The challenge for many people lies in adjusting their mindset to the challenges of contracting life. But although transitioning from permanent to contract work can be a big change, it doesn’t have to be intimidating.
We’ve gathered together four solid reasons why contracting will actively improve your professional and personal life, so you can grab hold of your dreams with confidence!
1. You get to spend more time on work that truly interests you.
If you’re wondering how to become a contractor, the first step is in identifying both what kind of work is most meaningful to you and what gaps you see in the marketplace. From there, it’s about finding the projects that utilise the skills you’ve built up over your working life.
Once you’ve established yourself as a regular contract worker you can really start to pick the assignments that matter to you. This also applies to your clients. If you have a bad experience working on a gig, one of the joys of contracting is that you never have to work with that client ever again. Even if you’re contracting through an agency, you always have the flexibility to turn work down.
Plus, the short-term nature of contracting work means that even if a working situation gets difficult, it’s so much easier to disengage and not take things personally because you know that soon you’ll be free and clear.
2. All your skills and versatility are relevant
Unless you’re very lucky, there will probably come a period when your contracting work comes in fits and starts. Even if you find the market fluctuates and you have fewer choices for high day rate contract jobs, there are still saving graces particular to this way of working. One of the most wonderful things about contracting is that nothing you’ve ever learned is wasted. It is often the case that clients are looking for contractors with niche skills that can’t be replicated in their existing workforce. Sometimes it does actually pay to be older and wiser!
So, if you’re an IT contractor, for example, make sure you include every programming language you’ve ever learned or used on your CV. Companies often require IT contractors to migrate data from an old system to a newer one, so if you’ve got first-hand knowledge of a firm’s antiquated system, then you’re guaranteed more work than someone who might be stronger than you in the more popular programming languages.
3. You get paid more money
This is the one that everyone mentions first at parties: contractor pay is significantly higher than an equivalent permanent position. And with financial freedom you have significantly more choices on how to live your life..
There are many reasons that a contractor salary is so much more than a permanent worker’s but chief among them are that companies don’t have to pay the taxes and national insurance that they do for regular employees. This, coupled with the specific expertise they bring to the table, means a day rate contractor can command a more generous fee from clients, often twice that of a permanent employee.
Of course, if you don’t have an employer paying your taxes and national insurance for you, you have to do it yourself. This is another area that can make prospective contractors unsure about going all-in, but the solution is really simple: hire an accountant.
A good accountant will help you register as a contractor, manage all communication with HMRC and help you navigate complex tax issues like IR35 legislation.You could manage all your financial affairs yourself but the fact is that an accountant will work with you to get the best possible financial outcome for your business and free you up for the stuff that truly matters.
4. You get to decide your own hours
Once you’ve hit your ‘magic number’ and earned enough to sustain yourself on your contractor pay rates, you have the freedom and luxury of deciding whether to take on additional work. Yes, contractors aren’t allotted any holiday pay by clients but if you plan your finances carefully then you can allocate yourself time off far in excess of a permanent employee putting in for annual leave.
Contractors who are starting families find this perk especially beneficial as you can take as much time and space as you need to welcome your little one. But whatever your family situation, the same logic applies: you’re the one in charge of how much time and attention you can give your personal life, not an employer — it’s a pretty powerful argument for embracing the contracting lifestyle.