IT Contracting vs Permanent Employment. What are the benefits?

Freedom, self-reliance, intense learning, expanded network and wider experience. These are just some of the benefits IT contractors cited for going freelance over permanent IT jobs. I chatted to a number of IT contractors based in Ireland and the UK on their reasons for contracting and well it’s obvious to me that IT contractors are motivated by more than money. OK, so we know that most contractors seem to make more money than their permanent employee counterparts, but what other benefits are there to persuade you to give up the safety of a permanent job.

1. Flexibility: You are your own boss, and can decide when and where you work. Dublin based C# contractor Andrew Locatelli-Woodcock explains ‘The main benefit of contracting, for me, is flexibility: flexibility to go where the work is, flexibility to acquire the training I need and take the holidays I want’

Most IT contractors are attracted to the flexibility that freelancing brings

2. Exposure to New Technologies - London based .Net programmer Tomas McGuinness said ‘Being a part-time contractor gives me the ability to choose projects and technologies that I find interesting and challenging.’

3. Better Career Management – Contractors have the ability to manage their careers better, by matching career aspirations with employers looking to fill IT jobs. As an IT contractor you can also choose your own form of training (tax deductible) to match market demands for skills.

4. Reputation Management - If you develop a reputation for being an expert IT contractor you will find that employers will be approaching you directly to fill their contract IT jobs. And soon they will be able to do just that via RoleConnect.com

5. Contractor-Client Relationship – The company you are contracting for is your client, not your employer or boss. A very different relationship to that of a permanent employee employer one! As Brighton based freelance web developer David Lockie puts it ‘The boundaries are much clearer when you’re a contractor as opposed to an employee’. Also, contracting is about having confidence that you can make better decisions than the person employed to manage you’.

We’d love to hear what your number 1 reason is for IT contracting. Over the coming months, we’re going to be blogging on what you need to know before you embark on your contracting career; tax, PRSI, umbrella company considerations etc. If there is any topic you want us to cover please let us know.

If you are an IT contractor or employer looking to connect with each other, check us out at RoleConnect.com

Share and Enjoy:
  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
  • LinkedIn

Tags: , , ,

About Catherine Wall

Community Manager

10 Responses to “IT Contracting vs Permanent Employment. What are the benefits?”

  1. Finbarr McCarthy July 6, 2011 at 4:07 pm #

    Interesting piece Catherine

    I think that employment “norms” are changing slowly. IT Folk are at the front end of the change and moving more to a contract world.

    All the reasons described above are interesting and valid but some would still say that “Job Security” in contracting is a negative.

    On the flip-side, many people in IT are obsessed with system redundancy, companies are likewise obsessed with revenue redundancy (not becoming overly reliant on individual clients) so I think that IT contractors are on the right track, not being 100% dependent on any single employer.

    Finbarr

  2. Catherine July 11, 2011 at 8:42 am #

    Hi Finbarr,
    Thanks for your comment.
    I would agree that job security in contracting is a negative.
    However, given the demand for IT contractors and their skills (especially in Ireland), it does not seem to pose an issue for most of them at present.
    From talking to a number of contractors the advantages of contracting definitely outweigh the disadvantages.
    Catherine

  3. Gary Heath July 12, 2011 at 6:27 pm #

    I have been working in IT since 1977 when I started as a trainee programmer with Combined Insurance Company of America (CICA, now Aon, I believe) in Kingston-upon-Thames in Surrey. I went Contracting in 1986 and never looked back … until recently !!!

    I loved Contracting, I still do, given the chance; I”ve worked in England, Ireland, America, Holland, Belgium, Luxembourg & Slovakia and I don”t regret doing it at all.

    What I *do* regret though is the fact that, as a Contractor, you are very rarely (never in my case) given the opportunity to learn something new. Whilst I supported the legacy systems and ensured that the General Ledger was running OK, while I made sure the Payroll worked and everybody got paid, all the permanent employees were moving on up, getting promotions & pay rises, or learning 4GL technologies.

    Now, they have all gone into Contracting or have moved up the Corporate ladders while I am left with nothing, as all the work I am good at is either redundant or is “outsourced” !!! I have been unemployed for over 2 years, the year before that was very patchy as well, the Irish government (much as the British government before them) have done nothing to prevent IT work being given to non-EEC workers who are happy to undercut us by impossible amounts !!!

    I would be very wary about advising anybody to go contracting these days, it is not the same as it used to be, and although I want to get back into work, the contracts I have spoken to people about in the past 12 months don”t pay enough to even tempt me to go for an interview !!!

    • Peter O'Donovan July 14, 2011 at 2:24 pm #

      Hi Gary,

      It sounds to me that you have a lot to offer in terms of business domain knowledge which is not technology dependent. I would also guess that the goal of writing reusable, reliable and scalable code has always been a priority for programmers. There are certainly better (and quicker) ways to accomplish these objectives with newer technologies but the ideology remains the same.

      If you want to learn a new technology to compliment your existing knowledge I would advise narrowing your focus to a single technology or framework. Identify an area that you are interested in and pursue an appropriate learning path.

      Have you thought about professional certification? Most vendors (i.e. Microsoft, Sun, Oracle) offer various levels of certification and a lot of contracting positions explicitly declare a preference for certified contractors. You can view the most up to date Microsoft Developer Certification at http://www.microsoft.com/learning/en/us/certification/cert-vstudio.aspx.

      You could contact your local FAS office and see if there are any places on the certification programmes that are delivered by their training partners. Alternatively you can buy the course material and adopt a self-study approach but this does not suite everyone.

      I hope your situation improves in the near future.

      Peter

  4. David Lockie July 13, 2011 at 9:30 am #

    @Gary Heath,

    Sorry to hear you”ve had a rough time recently.

    It seems that your experience is the flip side of contracting/freelancing: the freedom to shape your own working life comes with the responsibility of shaping your own working life! It becomes one”s own responsibility to stay ahead of industry trends, to learn new skills and to manage one”s own work pipeline. Something else to remember is that one is responsible for one”s own savings/pension fund, etc.

    Please don”t take this comment as suggesting you have failed to do any of these things: even with the most diligent attention to these issues, one can simply be unlucky. Worth remembering though is that many employees have found that their jobs have been outsourced and find themselves out of work. At least as a contractor/freelancer, you are likely to have a bigger network, more experience at finding work (and coping with periods of no work) and therefore less culture shock.

    Again, really sorry to hear you”re having a poor time atm.

    David

  5. Kieran July 13, 2011 at 5:09 pm #

    @Gary Heath

    I would echo pretty much all of what @David Lockie says above, also sorry to hear you have struggled to find contract work in the last few years.

    It would seem to me that many people, but not all, who opt to work as a contractor retain an *employee* mindset. In my view, this is a mistake – you are not an employee who works on a contract basis, you are now a small business owner who needs to market and sell his or her services to prospective clients. We will be blogging here on RoleConnect on that very topic shortly.

    @Gary, there is a significant skills shortage in IT throughout the UK and Ireland at present. The contracting market in London has recovered or near its pre recession levels. The Irish market has not recovered to the same degree as London and the UK but it is not far behind.You have significant experience which, with a little reskilling, would allow you to take advantage of current demand levels.

    I am guessing from your comment that you are based in Ireland. Both Fas (http://www.fas.ie/en/) and Skillsnet (http://www.skillnets.ie/) do a lot of work with people to help them bring their skills up to date. There are a huge number of online courses and resources available also.

    However, I would start with some research before jumping into training, courses and certification. What skills are currently in demand, what areas would suit you – you have a wealth of experience which money simply cant buy. In software development at present, there are a huge number of openings for C++. Java and .Net developers. There are also a number of opportunities at present for testers and project managers. Spend some time on the job boards and measure what skills are required and where you fit.

    Coder Dojo (http://www.codrdojo.com/) is a new and free approach to programmer, currently starting in Cork and I understand will shortly be available in Dublin. The approach is a club for people to learn some new coding skills.

    Hopefully others will post some suggestions for you here and I will be happy to pass those onto you, hope it helps

    Best of luck
    Kieran

  6. Darren July 18, 2011 at 2:25 pm #

    Very interesting post. I”m new to the contracting game – recently finished my first 12 month stint. First contract job had a steep learning curve but fellow contractors are very willing to help you out.

    One thing I”m still adjusting to is the amount of red tape involved in contracting. I was required to set up a limited company or become part of an umbrella limited company. I went for the former, and the tax/PRSI returns etc. are time consuming.

  7. Tomas McGuinness July 19, 2011 at 8:34 pm #

    I was a contractor for almost four years and found the paperwork annoying, but I chose to do it personally. Getting setup can take some time, but I didn”t find it troublesome at all. I paid an accountant to do all the paperwork etc. In terms of PRSI/Tax, you can easily pay an accountant or umbrella company to perform that stuff for you.

    I”m working now in London as a permanant employee and I do some contracting part-time, working for people in Ireland. I do see a strong demand in Ireland, one which wasn”t present when I left the Emerald Isle in 2007. London does seem to have a very strong requirement for developers at present, especially in the financial sector in which I work.

    In terms of learning new skills, I find that my work with companies in Ireland has afforded me that privilage. Perhaps because I work part-time, I could pass up on work that I know won”t teach me anything new. However, I haven”t found that to be the case.

  8. Michael, Cork July 25, 2011 at 11:57 pm #

    I have been a contractor for about 7-8 years in total. I also had a number of permanent jobs.

    I would encourage anyone considering contracting, to get a few years experience under their belt first. It”s important to be able to go into a company and very quickly command respect from your peers and your client, so make sure you absolutely love what you do, and have around 5 years or more good quality relevant experience in your field of expertise.

    If you do your research, choose your contract(s) carefully, keep on top of the paperwork, and admin obligations, contracting can be a very rewarding career.

    Working direct with the client gives the contractor the opportunity to develop a lasting relationship, and become a trusted service provider or expert in the eyes of the client as apposed to a temporary “resource”.

    So I would say with the right attitude, and a very professional and hardworking approach, contracting can be a great career option. It”s obviously not for everybody, and there is some uncertainty as there is with any job or business. Developing an excellent reputation with your clients can help reduce the uncertainty, and make it easier to find contracts and get referrals.

    Mike

  9. Dave Aronson January 3, 2012 at 3:00 pm #

    I”ve pretty much given up on “real” jobs and am taking the plunge (back) into contracting. Why?

    - Staying on top of new technologies. At the very least, I”ll get a much bigger say in what *training* I get, and might stand a decent shot at getting work in new technologies. By contrast, at one place I worked in the 90s, I was doing C but hoping to do some of their C++ work, having learned C++ on my own. But no, the C++ work was reserved for the people who had been there several years. I left, and the very first assignment at the next company was in C++.

    - Job security. Yes, believe it or not! The IT field here in the USA is full of layoffs (what you would probably call “being made redundant”), especially where I live. I”m near Washington DC. That means lots of government contracting company work, so it”s subject to the whims of the government, which go nearly opposite every four years or so (when we elect a new President).

    Yes, it”s risky. And a lot of work, since you have to be developer, support staff, CEO, CFO, Director of Sales, Director of Marketing, etc. all in one. But it sure beats going obsolete by depending on a company to give you training in new things, chances to apply new things, or even a steady paycheck.