You or someone you know is a contractor…experiencing the freedom and joy of not being a cog in a corporate wheel. Right? Or, maybe you worry about long-term employability or comprehensive benefits and prefer the stability and prestige of a “real job”. Hmm.
People actively pursue (or are forced into pursuing) contract work for any number of reasons. Think about your reasons for looking into contract work. Do you want the opportunity for a higher hourly wage or flexibility to work from home? Or maybe you need another channel for opportunities because, hey, it’s the gig economy now, and companies are hiring fewer full-time employees and relying more on contractors. Contract work has as many highs and lows as being a full-time employee, so it’s a good idea to press pause and weigh the options before changing up your life.
The five reasons below and the accompanying downloadable checklist can help you decide if contract work could be a good fit for you. There’s no magic formula, but if you can answer “yes” more often than “no,” contract work is likely a good fit. This list is not all-encompassing, so you can add your own items to the checklist to continually re-evaluate whether contract work could work for you.
1. Higher Hourly Rates
When you accept a contract role, you might earn $15-30 an hour more than if you worked as a full-time, salaried employee. However, many companies offer the higher rates by forgoing benefits, such as healthcare, 401(k), or guaranteed leaves of absence. If you are able to get benefits through a spouse or partner, the higher wage route could be great. But if you have to cover the benefits on your own, know that a lot more of those wages will go towards benefits. And now you have to spend your own time to manage those “benefits”, and not an employer. On the other hand, if the rate is substantially higher than you would receive as a salaried employee, you could manage other expenses on your own, and even be able to stash cash away for lean times.
Another opportunity (or challenge) is potential for overtime hours. If you’re asked to work more hours, you make more money, as opposed to someone with a consistent salary capped at their 40-hour workweek. During projects the salaried employees, who are typically exempted from receiving overtime, probably work overtime, but won’t get the additional cash. And, some companies take advantage of this and ask you to work unreasonably long hours even when no major project deadlines are looming. You might get compensatory time for significant overtime, but not every company offers alternatives to maintain a good work/life balance.
2. Quick Recruiting Process
Something I personally appreciated when doing contract work was how quickly the recruit-to-offer process happened. Recruiters often contact you, get your resume, and schedule a phone interview. They could be the only people to interview you before the hiring company extends you a contract offer; or, you could be scheduled for phone and/or in person interviews with people at the actual company. In my experience, it took as little as a week to go from recruiter to 30-minute phone interview with the company’s account manager, to offer. Often, they’re willing to place contractors without as much vetting of references or timely hiring process, because they just need someone in place to do the work and it isn’t as costly for them to replace you if it’s not working.
If you’ve been out of work for a long time, this quick recruiting process can feel like a life saver. Rather than applying and waiting for up to a month or more to wrap up the process, with many contract positions, you’ll know within a week when you can get started.
3. Be Your Own Boss, Set Your Own Schedule
Working for yourself can be great, but if you’re doing contract work, you still have one boss (or many bosses). You probably have some flexibility in your daily schedule since the organization you contract to can’t completely control your schedule. It’s best (and sometimes required) to know up front what the organization and the company that represents you have in place about working hours. For example, are you working more than one contract, so your work for one is primarily during standard business hours and work on the other is during night and weekend hours? Do you have to formally request to take time away from the desk, or can you just casually let people know you’re going to need an hour today for a doctor’s appointment or a child’s soccer game? Sometimes contractors also have more flexibility to work from home, but that varies from company to company. I prefer to work at home because I get plenty done, but I do have the feeling of always being “on.”
You might also have the opportunity to set certain milestones or progress reviews, but could have little control over complete project deadlines. In addition, if you come in at a management level, you won’t have much (if any) hiring or firing responsibility, so you’re stuck with the team the company has set in place.
4. Variety of Responsibilities
If you’re brought in as a contractor, you have an opportunity to expand or refine skills, without feeling like you’re stuck at the company if you want to move on when the contract ends. Along with the breadth and depth of project work, though, you can sometimes run the risk of being placed on so many projects that it’s difficult to keep all the details straight.
It’s also important to prepare for the full-timers to not treat you the same as their true co-workers. Rules in many places govern how employment is viewed, and companies who use contractors rigorously in enforce policies around co-employment. As a result, contractors are often not invited to company parties, aren’t given bonuses, and kept out of some project discussions that hit too closely to the company’s trade secrets. And at times, full-time staffers could think you’re placed as a consultant to analyze and report back on their successes and failures, so they’ll mistrust or assume you’re trying to take their jobs.
5. Potential Work Arrangements
Just because you work on contracted projects does not necessarily mean you are a solo contractor. You might be employed by a consulting company and kept on the payroll even when not assigned to a project (often called “bench time”). Or, you might be employed by a consulting company as a W2 employee, yet only employed when assigned to a project.
Another option is that you are completely an independent, primarily 1099 contractor. In this case, you are responsible for your own healthcare and the money for taxes, Medicare, etc. And, you might have to supply our own equipment, such as a computer or mobile phone. You can organize an official business or file a doing business as (DBA) registration and just work under your name.
Each of these employment situations has its challenges and benefits. As you gain experience as a contractor, you will likely develop a preferred way to work.
Don’t quit your day job just because you think it’s easier on your own. There are always perks and drawbacks on both sides, and let’s face it. You’re still always working for someone! Even when you don’t have a “boss”, you still work for a client, who demands your best efforts.
Overall, the choice to take contract work is personal, and your decision to go that route may change based on specific roles that are available and situations within your life. Download and use the checklist as a way to balance your feelings about contract work overall, and about individual contract opportunities you’re presented.
|This template is free to download and customize for your own use. However, DO NOT REDISTRIBUTE OR REBRAND AS YOUR OWN ORIGINAL DESIGN for posting to online sources or for business profit.|