As we draw close to the end of 2015, it is clear that employment levels have continued to improve, particularly in the IT Sector. As was highlighted in the Abrivia Salary Survey, 2014 was the year of the contractor and in terms of 2015, nothing has changed in this regard.
2015 has seen as significant rise in both companies seeking contractors for fixed term contracts and employees crossing over from permanent to contract based employment. Abrivia Recruitment’s 2016 salary survey will delve further into rates and trends in this area, but for employees it is good to weigh up the options between permanent or contract roles.
Advantages and Disadvantages of Contracting
Advantages
1) Salary
When working as a Contractor you can charge a higher daily rate for the specific short term contract you are assigned to. Due to this contractors receive an estimated 20% salary increase. What does this mean however in take home pay? It does really depend on whether you are working for a Limited or Umbrella Company, working through your own limited company your take home can be between 70% – 80% of your contract value, whilst working through an umbrella your take home will be approximately 60% – 65%, meaning that working through your own Limited company can be more tax efficient.
Here at Abrivia we offer all candidates advice on which company to go to, generally if your contract is under 9 months with potential of going permanent we would recommend an Umbrella company. If your contract is over this duration a Limited company would be best advised.
2) Flexibility
You can have the option to work for a multitude of companies in the space of a few years, whilst having the opportunity to get your hands dirty on variety of different projects. You are also given the opportunity to work at times which suit you personally, extended holidays between contracts along with control over what industry and working environment would suit you best.
3) Exposure to new technologies
With any attractive position an employee is given the opportunity to develop and hone their skills. In contracting, especially in the IT sector, you can work on a number of databases, applications, servers. Working and perfecting your skills in these areas will stand to you and make you much more marketable when seeking a new contract
Disadvantages
1)Security
Although unemployment is at its lowest level since 2008, one of the major downsides of contracting is there is no guarantee of your contract being extended or gaining employment in another company immediately after finishing your contract. To mitigate against this, start your search or contact your agency a couple of weeks before your contract is due to end.
2) Between contracts
Although you do charge a higher salary, when you are not working (in between contracts, holidays, and sick leave) you will not receive a salary. The key here is to plan ahead and create a budget for this circumstance, should they arise
3) Training
As a contractor you are hired specifically for one project, it is assumed from your previous experience and conversations with management that you are equipped with the full knowledge of the project ahead. Because of this there is little or no training period given, you are fully responsible for your own training and development.
As you can see there are benefits and struggles in both areas, here at Abrivia recruitment we recruit in both areas and offer advice and guidance if you are uncertain as to which career path to take. Along with detailed information on how to set up your own Limited/ Umbrella Company.
