Thinking about becoming a professional contractor?
Being a professional contractor is very different from being employed. There are more risks, but there are also many advantages. You are a contractor if you work for somebody else for a fixed period under a fixed contract to help them complete a project. You will be selling your skills and time, and will usually be paid by the hour or by the day. Your will normally operate through your own Limited Company as otherwise, you are likely to be regarded as an employee of your client by Revenue.
What’s in it for the client?
There are several reasons why companies like to use IT contractors or Engineering contractors.
They are usually more flexible over hours etc. than permanent staff;
They are easier to hire and fire – and are not a long-term commitment;
There is no employer’s PRSI to pay (a saving of 10.75%).
Employee rights and entitlements including redundancy etc. do not apply.
They provide skills the in-house team may not have.
The other major reason companies like IT contractors is that they save money. If a company employs you they may have to pay sick pay, holiday pay, redundancy pay and employer’s PRSI (as mentioned above). But if they use you as an IT contractor or Engineering contractor they don’t have to pay any of this – so they can usually afford to pay you more per hour and still spend less money!
What’s in it for the contractor?
Every contractor has his or her own reasons for liking it. Some of the most common are:-
Being your own boss – which can be extremely enjoyable and satisfying;
More money – Contractors are usually paid more than employees working alongside them on a project;
Freedom – e.g. IT contractors can choose when and where to work, when to take holidays, how long to take off in between contracts, etc.
Variety – by moving from contract to contract and company to company, contractors usually develop very varied experience and an impressive CV;
Less tax – IT contractors who take professional advice can also reduce the amount of tax they pay and choose for example to pay a greater portion of their earnings tax-free into a company pension scheme.
What qualities make a successful contractor?
The successful IT contractor or Engineering contractor:
1. Has the ability to go from site to site, adapting to the different conditions, the different tools, the different culture, and the different ways of working. Those that can’t do this will struggle, especially as a first timer in IT contracting.
2. Has the ability to get on with other people and make new friends easily, or at least the ability to make new working relationships easily.
3. Has a willingness to help other people without criticising their mistakes. Contractors have a wealth of knowledge of how things are done at different sites, and it can be very useful for both permanent management and permanent employees to be able to tap into this reservoir of knowledge.
4. Has the ability to know when his or her advice is wanted and when it is not. Sometimes, or at some sites, they’ll want your advice about how to do things and sometimes they won’t. A successful contractor will be sensitive to this, and not try to force unwanted advice on an unwilling audience. If it is clear that they don’t want your advice, just get on with your job or go elsewhere.
5. Is always aware of potential business at a client’s site. Any problem that the client has is a potential new business for the alert contractor. The successful IT contractor may even have bid successfully to win pieces of work at various sites, e.g. to run part or all of a project or to maintain an area of the system.
6. Looks for their own work rather than just lets agencies look for them. That way they have the opportunity to tout for new business without having a restrictive agency clause in their contract which prevents them approaching the client for new work.
7. Will have taken his or her opportunities to pick up extra work / contracts for multiple clients over the years, and may have employee’s working on various sites.
8. Will have a database of potential clients, with those he or she has worked for before, near the top of the list. He or she will have permission to contact those potential clients every so often, say three months or so, and will do so.
9. Will keep potential clients up to date with contact information when it changes, e.g. address, phone number and email address, so that there is never a situation when the client is desperately seeking him or her for work in an area of the system where he or she has knowledge, without being able to find them.
10. The successful contractor will have such a good reputation for his or her work and have such a good rapport with their clients that their various contracts are renewed whenever the client is able, or is contacted again when clients need to have work done on an area of the system where the contractor has expertise
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