Reader ‘Insincere‘ posted Stopping Contracting in the Comments section.
I think that going from contractor to permie would be a huge shock but here are some thoughts and comments on the current ‘IT boom’:
1: Salaries Rising for IT Employees
There is a huge increase in permie roles currently, especially for Technical Architects and Business Analysts, with the permie salaries on the rise. In recent weeks many firms have noticeably upped their permie TA salary range from 45-60K plus package to 70K and upwards plus package.
This is because of the huge amount of work now going on or about to begin. One consultancy I know is looking for 120 TAs between now and March with others looking for Technical Architects in the numbers of hundreds also.
Stopping Contracting – Fewer Jobs for Contractors
However, very few of these roles are filtering down to contractors. The Spring will be a decisive time but I am already seeing a big reluctance from many of the consultancies to hire contract staff as they see, wrongly, that contractors eat into their precious end profit.
It is also, perhaps, that TAs are now seen to occupy such a crucial area in a business that companies simply want TAs ‘on-board’ as staff. However, I will say it again, these roles do not appear to be filtering down to contractors currently.
2: Benefits Reducing
The benefits of contracting reduce all the time and I now wonder whether the benefits of trying to avoid IR35 is truly worth it plus all the other hassle that a contractor has – endlessly chasing contracts, moving about the country like a ‘gypsy’, dealing with agents, dealing with tax and legal issues, etc, etc. That’s whether they use limited companies or umbrella companies.
If anything the regime that contractors find themselves in taxation-wise and legally will only get more difficult in the years ahead. Many freelancers are looking at stopping contracting.
Long Term Contract
Yes, if you get yourself on a good long-term contract, you might end up retiring from it and, for that reason, I would not be concerned about IR35 if I knew the project was going to last for years and years.
But you might end up on a better long-term financial ‘gig’ if you work for a blue chip as a permie who has actually got one of the big Government contracts – and have all the ‘benefits’ such as holidays, sick cover, pension, endless meetings, chats to people in the canteen that fill a quarter of your day.
In other words, a good ‘gig’ for a lot less stress.
3: More Security
The current ‘IT upturn might last 10 years or it might last 6 months. The global economy seems to be teetering between boom and bust not sure which way to go.
If it goes down then us contractors will be badly hurt again. Many contractors who I know who managed to jump ship before the last bust have earned very good permie salaries in the last 3-4 years whilst most contractors living standards plummeted. Many ended up stopping contracting altogether.
Take a look at non-IT jobs also – you will be surprised what many apparently stress-free and easy – on the surface – jobs are now paying in many other areas, especially the Public Sector.
In my local paper last week the lowest paid permie jobs were all for IT staff whilst the ‘Five-A-Day’ fruit counsellors, social workers, nature reserve wardens, etc, were on salaries better, and often MUCH better, than the IT ones.
No Constant Learning Curve for IT Contractors
No constant learning curve, no expectation to be a guru in MS version NEW X.X when it only came out 24 hours earlier and no worry about being the fall guy if the Messaging system or the VOIP falls over and thousands of people can’t communicate.
There has to be a balance to Life that gives us Quality of Life and the never-ending learning, the stress, the constant battle to find a new contract or to extend the current one, dealing with agents, (Who do not act like proper agents at al.), the moving around, living out of a suitcase, etc, etc, is not worth it as you see the years go by and Time passing.
Some Thoughts on Stopping Contracting
Well, those are some thoughts on where we are currently in the IT cycle. Currently, I see little evidence of the US companies taking on large numbers of new staff anytime soon. In fact, some of the salaries offered by US companies here in the UK are now way behind their UK and European competitors. So that leaves many of us in the hands of UK companies with their often old-fashioned attitude to both IT generally and to contractors.
At the end of the day it is all about finding your niche. I have friends in the Public Sector working for Government departments who are paid good rates, appear to do very little work and who get contracts renewed again and again.
On the other hand I know people who work for the big five consultancies who are poorly paid, have to fight for renewals sometimes on a monthly basis and are so stressed out it is health and life affecting.
However, bottom line, contracting has changed fundamentally but I don’t think many IT contractors have realised this as of yet.
And yes, if I could give it up tomorrow I would. Other contractors should look at stopping contracting and going permanent.
Ad – Contractor Services
If you think you can benefit from using an umbrella company, try the following:-
Or do you need some professional advice on which umbrella company is right for you? Fill out the form below to receive expert advice.
For all necessary business insurance, including IR35, try Business Insurance for Contractors