The move from permanent employment to contract work is a transition that many are interested...
The move from permanent employment to contract work is a transition that many are interested in, but are unsure of where to start. This article reveals the steps permanent employees must take to become an interim professional.
Whether it's being your own boss or increased earning potential, there are many benefits to becoming a contractor. This complete guide will reveal the first steps to moving from full time, permanent employment to pursuing contract roles.
Contractors, or interim staff, provide a quick solution for businesses facing hiring challenges. Contractors provide specific skills or services needed by a company for a set period. From marketing support to executing ecommerce strategies, contractors lend their expertise to help businesses hit new heights.
Usually, contractors are highly experienced professionals who have developed specific skills and mastered their craft. This level of expertise enables them to quickly deliver value to businesses. As a result, many companies seek contractors as an alternative to hiring a permanent employee.
One concern that permanent employees have when considering becoming an interim contractor is the amount of opportunities available. However, there will always be vacancies for new contractors.
There are a number of reasons why a company might engage a contractor. For example, companies might bring them in to cover staff absence or to fill a skill gap within the team.
There are three main ways a business might engage a contractor. Clients may hire you for a specific number of hours, a set time frame, or for the duration of a project.
Additionally, there are different ways to become a contractor. You can be self-employed, work independently as a sole trader, or run a limited company. Whether "employed" or independent, contractors can work on one or multiple temporary contracts simultaneously. They will often work across various industries and build an extensive range of transferable skills.
With the demand for contractors as prominent as ever, there's never been a better time to consider moving from permanent to interim employment.
So, how do you become a contractor? We've compiled a list of five steps you should take to set yourself up for success when pursuing interim roles.
Before you embark on your career as a contractor, you must research the market you intend to tackle. When considering moving from permanent employment to contracting, it's essential to assess:
To gain a solid understanding of your market and be confident in your ability, ask yourself the following questions...
Contracting is competitive, so you need to establish whether there's a demand for your skill set. You might discover that employers are searching for your credentials in an industry you hadn't considered before.
Within this research, you should understand your earning potential and determine whether contract work makes financial sense for you. Employers usually pay temporary workers a day rate, but this can vary depending on the contract length.
Additionally, you should research the regulations of becoming a contractor and consider how you will manage your accounts and taxes.
Understanding the legal requirements behind contracting is another crucial step. The most prominent is the off-payroll working rules, often referred to as IR35.
The UK government created the IR35 Act in April 2000 to identify contractors who worked as "disguised workers." This means they evaded paying the proper tax by offering their services through an intermediary. The Act also attempted to expose companies that employed individuals to "misrepresent" their employment status by treating them as independent contractors.
Your IR35 status will change depending on your working circumstances from contract to contract. The end client will decide whether your employment puts you within or outside public sector positions. Large and medium end-clients in the private sector are in charge as of 6 April 2021. You should always be aware of IR35 in case HMRC queries your status, or you have the chance to contest an end-choice.
Companies can pay interim employees in one of two ways - through a limited company or an umbrella company.
Contractors frequently use umbrella corporations to avoid handling administration or paperwork personally. Or they might only choose to pursue short-term assignments.
In contrast, a limited corporation has the advantage of providing additional tax planning alternatives. This might result in higher take-home pay than an umbrella company. Additionally, Directors of limited companies may also deduct some costs that an umbrella company cannot.
To be a successful contractor, having in-demand skills will only take you so far. You must find ways to stand out from the competition. Building your personal brand is one way to achieve this and help bolster your client network.
Your CV for contracting should be different to the one you have used to find permanent positions. Create a CV and a portfolio of the projects you have worked on and the clients you have supported.
Be sure to share these resources on platforms that will help you find work, such as LinkedIn. LinkedIn can act as an online CV that potential employers can contact you through.
You should consider attending networking events to get your name out there. These might be industry-specific events or recruitment events tailored for contractors and interim professionals.
Creating an elevator pitch for your personal brand will prepare you for any chance encounters. You never know when you might meet someone who require your services. So what could you say in this scenario?
Your elevator pitch should be able to...
Registering with a recruitment agency is one of the easiest ways to put yourself out there as a contractor. The industry is fuelled by contract recruitment agencies who are connected with brands looking for trusted contractors.
For example, Director, Liz Hopkins, recently reached out to MOJU having spoken to an excellent contractor who would be the perfect fit for an open vacancy in their team. They weren't actively searching for contractors at the time, but Liz was able to educate the brand on the benefits of interim talent as they continue searching for a perm hire. This resulted in the perfect match for both parties.
At 3Search, we know how difficult it can be to grow your network when starting a career as a contractor. Contact our specialist team to learn how we can help you get started.
