Professional Contracting (Market Overview)
Choosing to branch out into contracting for the first time? Great call. But it’s a decision with big implications. Not only does contracting change your employment status, but it also radically changes the way you work.
From the jobs you can take on, to the way you are paid and the amount you can earn, switching to contracting is a big step. But with the right guidance and support along the way, it could be the best move you’ll ever make.
Contractors are workers drafted in on a project or contract basis. They help organisations handle excess, one-off or highly specialised work.
Contracting benefits employers, who get the flexibility of expert help over a set period, without all the costs associated with a permanent hire.
Contractors get all the benefits of self-employment – a break from monotony, the freedom to pick and choose your assignments and often, a higher hourly or project rate.
Taking the plunge into contracting can feel like a big step, particularly for first timers. Relax. At iContract, we’re with you every step of the way, with the tips, tools and techniques you need to succeed. You will never be alone in this contracting world.
Why go contracting?
Ever wondered why so many people are choosing contracting? Here’s why! There are a huge range of benefits over a standard, full-time job, and an increasing number of people are choosing this career path over more traditional options.
Contractors are free to take on any contract or job they choose, with total flexibility over where and how they work. This flexibility is a key advantage contractors enjoy over employees, who are restricted by the instructions of their boss. As a contractor, you choose the projects you want to work on, and in some cases even the types of work you are prepared to perform.
Contractor rates can be as much as double the industry rate for the same work, and choosing to freelance can mean a big hike in your earnings. You are free to take the best paying jobs, and to take on as many different projects as you can handle, increasing the total amount of income you are able to generate.
Contractors benefit from variety in the work they do, with the opportunity to move between work locations. This keeps work interesting – after all, variety is the spice of life! Depending on the type of work you do, it may even be possible to work some projects remotely, including from home.
Contractors can arrange their finances in a way that results in legitimate tax savings, primarily through setting up a limited company. This saves on your liability to income tax, and means a direct advantage over those paid through PAYE. That means more of your earnings reach your pocket.
Offset Business Costs
The costs involved in your business or trade can be directly offset against income as a contractor, reducing your taxable income and delivering a smaller tax bill. This means tools, materials, and other costs directly related to your work can actually reduce your tax bill, rather than coming off after tax.
Of course, contracting has downsides too. You are responsible for managing your own finances, your own workflow, and the projects and contracts you choose to undertake. There are risks involved, and you need to be business savvy, as well as competent and hardworking to survive.
However, with the ability to earn a lot more money contracting for the same work, and the flexibility, freedom and variety that comes with going solo, many people choose contracting as their preferred method of finding work. Welcome to contracting and welcome to your dedicated contractor community, iContract.
Contractor vs Employee
So we’ve seen a few ways contracting can change your working life. It shouldn’t be a scary transition, and people do improve their earnings and overall work satisfaction from making the switch. But how do you know when you’re truly a contractor?
Some roles are more suited to be contract based, and some are better positioned to be on a permanent basis. It depends on the type of tasks involved, the expectation on time and work commitments and the company’s resource preferences.
Contractors and employees are different in a number of ways. As a starting point, contractors have much more flexibility in the work they do and the way they do it, freed from the restrictions borne by employees. As a contractor you can still be expected to be managed on a daily basis and to be subject to a defined working schedule, but the freedom and flexibility do exist to adjust the schedule as you see fit.
Contractors are responsible for managing their own finances, including managing your accounts, taxation and filing to HMRC. Most of the contract works tend to be specifically related to a function or a project with a fixed deadline. However, there are some contracts with a broader defined role and are consultancy based. These tend to be on a more senior level and require more industry experience. Assessing your own skillsets, strengths and weaknesses is essential to obtain the right contract job for you.
The earnings gap between contractors and employees, even within the same types of work, is one of the major reasons people choose contracting. Who wouldn’t want the chance to earn more money from the job, with the ultimate freedom to choose the work they do?
So here you go. We hope we have provided you some useful insights to help you to decide whether contracting is for you. It is a personal choice, so you should weigh up the pros and cons, together with your personal preferences and comfort zone to make an informed decision. Don’t forget you are not alone, as a community, iContract is here to help you along the way if you do decide to go contracting.
Finding contract work
So you’ve heard about the benefits of being a contractor, and you might even be warming to the idea of getting started right now. But before that, you need to find work.
Most contractors split their time between the revenue-earning work and the admin work. Additional time has to be allocated to find contract work. After all, the more projects you can obtain, the more options you can choose from, the more experiences you will gain and the higher rate you might be able to justify.
Marketing yourself and your skills is the most important thing, both online and offline, to make sure you get a steady flow of offers. A professional Certificate, a strong CV, a good social media presence and a solid personal network are all important when it comes to building a successful career in contracting.
So how can you put together the best CV, and make sure you are always front-of-mind when it comes to landing contractor work?
How to write the best CV
When you’re out in the world of contracting, you need the best CV you can possibly muster to give yourself a fighting chance.
The CV is your first impression and the first thing that catches prospective clients’ attention. It should be written not only to tick their boxes, but to impress them and to convince them that you are the best candidate for the role required.
Your CV needs to look visually appealing to read. In printed form, it should have a clear, straightforward font, and plenty of white space and margin. Converting the word document into a PDF version gives an additional polished touch.
Be clear in your wording, and be clear about your message. What are your key skills and experiences? Why should the person reading your CV want to get in touch with you?
Keep your CV punchy. Avoid long sentences, and rambling paragraphs about your time at school, or your first job. A clear, punchy, impressive CV is more likely to bring the clients to your door.
No one wants to read about experience in sectors unrelated to their business. They want to know what you have done and what you can deliver for them. Keep your CV focused, relevant and direct to the point at all times. Tailoring your CV for different contracting roles gives you a better chance to tell the client why you fit well for the specific role they are recruiting.
Should You Get Your CV Professionally Reviewed?
A growing number of people are choosing to have their CV written for them, or reviewed by a professional writer for a tidy up. A second opinion can help you to spot mistakes you somehow missed and to stand out from the crowd.
The CV is still all-important for landing work as a contractor, but the working world is now much more online than ever before. Social media in particular can be a great tool for contractors, and it is worth polishing up your social media profiles to get the best results.
LinkedIn, Facebook, Twitter and Google Plus are the main social media profiles you should have and maintain. If you were to choose only two, go for LinkedIn and Facebook.
The best social media profiles are those that are:
- Presented with a personal touch
Be careful about the image you portray and the things you say on social media. When you are contracting, you need to think about your personal brand; prospective clients might look you up on any of these channels, so make sure there’s nothing there you wouldn’t want them to see, or that would alienate your name from their search.
On LinkedIn, there is a huge amount you can do to make your profile attractive to prospective clients. Your profile should be an extension of your CV, showing a little more about you as a person. It should be kept up-to-date at all times. Out of date profiles may cause you to be relegated beneath other candidates who have kept theirs current. Your profile should portray you in the best light for the best chance of securing contracts.
Your personal summary or description box is one of the prime areas for establishing your credibility. Write a description that is punchy, but touches on all the skills you have to offer and the type of work you might be interested in.
When setting up your social media profiles, particularly on LinkedIn, it is crucial to make it obvious you are a contractor. Write ‘Contractor’ and the key industry sectors in which you work in the title. Online searching by recruiters is often confined to title headers, so you want to make sure your name crops up in all the right places.
Positive client recommendations will add in extra bonus points. If you’ve done a good job for your client, why not ask for them to provide a personal recommendation on LinkedIn? A multimedia approach combining videos, images and sharing of interesting articles will help put you ahead of the pack and keep your name front-of-mind of any prospective client.
To further strengthen your profile visibility, you could even consider going for the LinkedIn Job Seeker premium account for an annual subscription fee. This enhances your profile by listing you higher up in the search results and helps demonstrate to recruiters that you are open for opportunities.
iContract provides a dedicated channel for professional contractors to connect with recruiters. Being presented on iContract gives you highly targeted visibility as an active contractor open for job opportunities and to connect with recruiters in real time.
Once you have a consistent and clear social media profile, you are ready to connect with others and to expand your network. But how?
Connect with employers in your sector
Find those in your sector who are in a position to hire contractors. Follow their LinkedIn and Twitter updates and make yourself known to them on social media by commenting on and participating in discussion. Identify the movers and shakers in your business and start listening to what they have to say. This is the first step towards building a three-dimensional online platform for your contract search.
Keep up to date with your industry
When you are out there on your own as a contractor, it can be easy to fall behind on current updates and trends in your industry. Follow industry bodies, commentators and anyone else sharing useful information about your sector. You might even want to share their updates with industry contacts and other contractors, helping to cement your network while positioning you as a knowledgeable expert in your field.
At all times, your communication should be subtle and professional. Bad social media etiquette can be worse than no social media presence at all. Don’t try to reach out and close a job on your first contact – you want to build your profile and your personal brand over time through relevant, professional insights and communications.
Look for channels for referral
If you know someone who knows someone, it is well worth pushing for a social media introduction or referral. This is as much as 20% more likely to result in a response than a cold message. On sites such as LinkedIn, you can easily see the common connections you share with the person you are trying to approach. Don’t be afraid to ask for an introduction.
Publish content on LinkedIn
LinkedIn allows contractors to publish articles relevant to their industry. Strong content can be hugely valuable – it allows people in your industry to see that you know what you’re talking about and makes them think of you when they’re next in need of a contractor. The LinkedIn Job Seeker Premium account offers more direct contact with the movers and shakers in your sector, while allowing you to contribute more original content to increase your reputation and industry visibility.
Interact, follow-up and help out
Social media is a two-way conversation and you should aim to answer questions or respond to comments on your profiles as quickly as possible. Don’t leave anyone hanging and promptly follow up on everything you can.
As a contractor, the most important feature of social media is your network. The ability to reach out and make contact with people right across your sector is key to the power of social media. Business happens because people make it happen and developing relationships with key players in your industry is important if you want to secure the best opportunities.
Contracting while ensuring a pipeline of quality roles can be challenging. Marketing yourself, finding the right clients for roles suitable to your skills and experience and generally ensuring you remain visible in your sector are among the difficulties encountered.
iContract is a dedicated professional network for contractors with instant visibility in front of the right contract recruiters, targeted contractor profiles and contract searches, as well as other hosting and social benefits. iContract makes contracting altogether a more accessible, seamless and social experience.
The power of networking
Networking is the key to building solid relationships. As a contractor with limited job security, it is vital to keep a solid and active network to gain access to decision makers who might be able to offer you the dream contract.
Get in groups
There are tons of groups and pages, and getting involved in those most relevant to your line of work is a good way to get your name known. There are 3 groups on Linkedin and Facebook specially set up for contractors: Financial Service Professional Contractors; IT Contractor Circle; Independent Legal Consultants. Joining these groups help you to stay informed with the market information and to mingle with other contractors in your industry.
Participate in discussions
Participating in discussions, commenting on others’ comments and following-up on particularly pertinent discussions with a friend request or connection is a good way to meet other people in your industry who could open the door to the next opportunity for you.
Creating engaging social media content of your own is invaluable. This shows you as an expert in your field and helps you attract more interest in the work you do. Create meaningful content, from posts relevant to your industry to videos, photos and other engaging media and start to attract people to your online network.
Engaging with your network across multiple online platforms is key to the most effective results. Make sure you are represented and engaging on different social media sites and make connections wherever and whenever you can, i.e. actively respond to a ‘like’ on Facebook, a ‘Retweet’ on Twitter or a connection on LinkedIn.
While the online stuff clearly helps you to reach out to people you would otherwise never have met, to expand your network quickly, networking in the real world is the only way to bring people closer and to make a real connection. Combining the two together: to establish an initial contact online and to follow up in person is a very efficient way to ensure you are not just acquiring a virtual and distanced contact but to actually gain a real contact or friend in life.
To help you further, below we have listed a few real life networking opportunities and venues:
Business groups – The FSB, The BCC
Business groups like the Federation of Small Businesses and the British Chamber of Commerce provide networking opportunities and events for small businesses, freelancers and contractors. These events allow you to meet other people in your industry face to face, so you can discuss opportunities for partnering up and working together.
There are a number of online platforms specifically tailored to organising offline networking meetings and events. These can help you get put in touch with the right people and can secure you that all important meeting before you even leave the house.
Conferences, training, industry events
In less formal settings, conferences, training days and industry events can be a great way to expand your network. IPSE hosts several training courses and conferences each year, which is a good opportunity to meet other contractors and subject experts in the industry.
iContract provides a contractor focused network to connect with each other and with recruiters instantly based on mutual interests. Through our 3 dimensional engagements: Connection search, add and updates; active group discussions; and offline meetups, it is never easier to establish and maintain a targeted and active contractor network.
The rest of this guide can be found in our Financial Matters guidebook.