Contractor or Permanent – the big decision – which is it to be?

Contractor or Permanent Employee
Contractor or Permanent Employee

The Choice – Contractor or Permanent

To be a contractor or permanent worker, that is the choice that faces permies early in their careers.

Is it still worth being a contractor?

A lot depends on your make-up, and whether you can actually get a permanent job. Many companies and agencies won‘t actually consider contractors. They worry that the contractors would take another contract as soon as one came up.

Also, many contractors see themselves as small businessmen and do not want to go back to being a permanent employee. It is a lifestyle choice.

Putting that aside, it is worth looking at whether it is worth being contract, or whether a permanent job is the best option.

Advantages of Permanent Job

There are certain advantages of having a permanent job.

If you are still on downturn rates, the contractor rate, especially when you take into account time off, pretty much equates to the same as the money that a permanent employee is getting.

The contractor has a little advantage if he or she is outside IR35. However, if he is not, then his take home pay may even be slightly less than that of an employee.

The contractor also doesn‘t have the benefits that permanent employees get, e.g. Pension, National Insurance, a car possibly, and 5 weeks paid holiday a year (wouldn‘t that be nice).

Pre Downturn Rates

For those that are in work, and who are on the old, pre-downturn rates, the answer is clear. They are better off contracting. That’s even if they are among the unlucky ones who have had to take a forced 10% cut in their rates.

There is also another advantage to taking a permanent job. That’s to avail yourself of the new skills that you will need for the upturn. People are looking for contractors with those skills.

A lot of unemployed contractors are waiting for to get back into the market, so that they can resume their contracting careers.

What is happening though is that companies who want to take on contractors, are not looking for contractors per se, they are looking for people with the new skills who will contract – which is a different thing altogether.

New Breed of Contractor

Accountancy firms are reporting that they are getting an influx of new contractor clients.

The reason appears to be that there is a new breed of contractor emerging, who were until recently permanent, but who have the new skills that clients want.

So how do contractors get those new skills?

Those who are in work may stand a chance of being able to get them on the job. For those who are out of work, we all know how difficult it is to get a job with just a week‘s training course behind you.

For those who have been out of work for a long time, and who don‘t have the new skills, the best way forward is to try as best as you can to get a permanent job.

Contractor or Permanent – The Decision

I suppose the tick list would be:-

1) Are you in work with the old pre-downturn rates? If so, stick at it and try and wangle your way into projects with the new skills.

2) Are you in work with the old rates (or better) and using the new skills? Well done mate. You don‘t need any advice from me.

3) Are you in work, are getting the new pittance rates, but have the new skills? Stick at it. When the market improves, the rates will go up again

4) Are you in work, getting the new pittance rates, but using the old skills? Try to get yourself on projects with the new skills. If you can‘t you, should still stick at it, but also look for contracts with the new skills and good permie jobs that have the new skills too

5) Are you recently out of work, but have the new skills? Keep plugging away and you‘ll get something eventually

6) Have you been out of work for a long time, and have old skills? You might get something when conditions pick up, but it might be worthwhile applying for any permie role that you see that gives you the opportunity of picking up the new skills

Contractor or Permanent – Conversion Work

For those whose skills are old and who are out of work, it might be a good idea to look out for conversion jobs, either contract or permanent, where they will be converting from a system with your old skills to a system with the new skills.

They‘re unlikely to be able to find too many people with both skill sets.

If you see a company who you‘ve worked for before, who are advertising for new skills, the chances will be that they are converting from the skills that you have to the new skills. Give them a call to see if they need any extra help with the conversion.

Of course, many of you will not want to go permanent at any price, and good luck to you.

However, more and more have been taking the option to go back permanent either as a career choice, or as a safer haven in rough times, at least until the storm is over.

Contractor or Permanent – it‘s your choice.

For further useful advice on contracting click on Contracting.

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