IT Contracting, embrace or avoid
Discussion
Hi Guys,
I'm facing redeployment and possible redundancy...
One of the options offered by my employer is assistance with setting up to work as an IT Contractor, which I believe is registering with agencies etc...
My questions are really,
Would this be a sensible step for the short, medium or long term?
Is IR35 really a problem or has it killed the game?
Is there likely to be work available in South/West Yorkshire to keep me utilised at least 50%?
I'm at the deskside end of things, W2K/XP Pro, MS Office Suite. Deployment of AD and AD admin. I also have some experience of routers/firewalls switches etc which make up a WAN
Regards,
Brian (and a Red 350i)
I'm facing redeployment and possible redundancy...
One of the options offered by my employer is assistance with setting up to work as an IT Contractor, which I believe is registering with agencies etc...
My questions are really,
Would this be a sensible step for the short, medium or long term?
Is IR35 really a problem or has it killed the game?
Is there likely to be work available in South/West Yorkshire to keep me utilised at least 50%?
I'm at the deskside end of things, W2K/XP Pro, MS Office Suite. Deployment of AD and AD admin. I also have some experience of routers/firewalls switches etc which make up a WAN
Regards,
Brian (and a Red 350i)
I did it for a few months. It tends to pay the bills but I was still looking for permanent contracts.
You can use an umbrella company, I used Giant (www.giantgroup.com I think) which takes care of most things i.e. tax etc. and will pay you the minimum wage as a salary and then the rest of your hourly rate as a dividend whic is taxed lower. You can also claim travel and meals back which I think are tax free. They do this for about £35 a week.
You can use an umbrella company, I used Giant (www.giantgroup.com I think) which takes care of most things i.e. tax etc. and will pay you the minimum wage as a salary and then the rest of your hourly rate as a dividend whic is taxed lower. You can also claim travel and meals back which I think are tax free. They do this for about £35 a week.
Right
there are three types of "Contractor"
The first type is the bloke/blokess that needs some cash between jobs or is in a ten a penny field such as Desktop support/bog standard developer etc. This type of person is really better off staying permy and leaving contracting to those that enjoy the freedom and uncertainty that the market brings.
The second type are the full on independent minded or niche skill specialists. The benefits of contracting if you are in this groupd is far greater. Rates are higher, less competition. You need to be independently minded, confident and realise you should be in it for the long haul.
The third type are the stepping contractors, these are mainly peeps from the previous group that use their contracting income to diversify and move quickly into other Business areas. Require even more dedication than the previous 2.
Being a contractor isnt easy if you want a long term career. I have worked lots of places where the contractors have been walked off site at a moments notice. The lack of structure can trip alot of people up.
If you need help registering with agencies then to be honest contracting is probably a step too far at the moment.
there are three types of "Contractor"
The first type is the bloke/blokess that needs some cash between jobs or is in a ten a penny field such as Desktop support/bog standard developer etc. This type of person is really better off staying permy and leaving contracting to those that enjoy the freedom and uncertainty that the market brings.
The second type are the full on independent minded or niche skill specialists. The benefits of contracting if you are in this groupd is far greater. Rates are higher, less competition. You need to be independently minded, confident and realise you should be in it for the long haul.
The third type are the stepping contractors, these are mainly peeps from the previous group that use their contracting income to diversify and move quickly into other Business areas. Require even more dedication than the previous 2.
Being a contractor isnt easy if you want a long term career. I have worked lots of places where the contractors have been walked off site at a moments notice. The lack of structure can trip alot of people up.
If you need help registering with agencies then to be honest contracting is probably a step too far at the moment.
I was a contractor for 11 years until I got offered a permie job at the same money... of course, you immediately start to fall behind. A few random thoughts;
- Definitely go for it if you have niche or specialist skills. I was a wizzo on Xerox stuff when experts were like rocking horse poo. Keep your skills up to date. Or let them get very old (I *still* get calls for MUMPS work, even though I haven't done any for over 20 years.)
- OTOH, if you're a run-of-the-mill MS weenie, I wouldn't bother. Our building is full of them, the rates are terrible and they're like Lego bricks - just plug 'em in when wanted and discard them when not. They all seem to be about 20 and living at home, too.
- OTOH(!) there's lots of work available doing NT to XP (AD) upgrades at present, but you have to know what you're doing and it won't last long.
- The first thing you should do is save up a few grand emergency money and stash it away somewhere. More than that if you have kids/mortgage/etc.
- If you need stability in your life, forget it. I've known contractors get fired on Day 1; "The project's been cancelled, we don't need you any more. Bye." Then again, I was in one contract for 11 years.
- Start a pension. Now. I didn't, and am now paying the price (literally). Trying to catch up in your 40's is painfull and in your 50's impossible.
- Although you don't have to get involved in office politics, you do get problems with "permie envy". Don't park your Porsche next to the IT Managers Mondeo. (I knew a contractor who bought a ratty Ford to come to work in for this very reason).
- A good accountant is a necessity. And hard to find.
- Forget about it if you want a "career". By the time you go back permie, you'll be 20 years behind everyone else on the career ladder. OTOH, you'll have loads more money, mortgage paid off, lots of nice holiday piccies.
- Agencies are (mostly) scum. This is a fact of life, and so long as you remember that everything they tell you is lies you'll be fine. If it ain't written down, it don't exist. And even then you can't be certain. (They don't treat the clients any better - I've seen both sides.)
- Definitely go for it if you have niche or specialist skills. I was a wizzo on Xerox stuff when experts were like rocking horse poo. Keep your skills up to date. Or let them get very old (I *still* get calls for MUMPS work, even though I haven't done any for over 20 years.)
- OTOH, if you're a run-of-the-mill MS weenie, I wouldn't bother. Our building is full of them, the rates are terrible and they're like Lego bricks - just plug 'em in when wanted and discard them when not. They all seem to be about 20 and living at home, too.
- OTOH(!) there's lots of work available doing NT to XP (AD) upgrades at present, but you have to know what you're doing and it won't last long.
- The first thing you should do is save up a few grand emergency money and stash it away somewhere. More than that if you have kids/mortgage/etc.
- If you need stability in your life, forget it. I've known contractors get fired on Day 1; "The project's been cancelled, we don't need you any more. Bye." Then again, I was in one contract for 11 years.
- Start a pension. Now. I didn't, and am now paying the price (literally). Trying to catch up in your 40's is painfull and in your 50's impossible.
- Although you don't have to get involved in office politics, you do get problems with "permie envy". Don't park your Porsche next to the IT Managers Mondeo. (I knew a contractor who bought a ratty Ford to come to work in for this very reason).
- A good accountant is a necessity. And hard to find.
- Forget about it if you want a "career". By the time you go back permie, you'll be 20 years behind everyone else on the career ladder. OTOH, you'll have loads more money, mortgage paid off, lots of nice holiday piccies.
- Agencies are (mostly) scum. This is a fact of life, and so long as you remember that everything they tell you is lies you'll be fine. If it ain't written down, it don't exist. And even then you can't be certain. (They don't treat the clients any better - I've seen both sides.)
You should avoid!
I was a contractor for 6 years, the money was great, but then because of the bl00dy w2k issue and those idiots in the government flooding the market place, the money went down pan.
Remember that at £18,000 that is roughly £10 per hour
But as a contractor, you should really get a ltd company, and then you are liable for company national insurance at over 12% so your £10 has just gone down. Then you need to get an accountant, so the £10 has gone down a little more.
You are treated as the lowest of the low, last in first out doesnt even come into it. They will drop you like a stone, and it does hurt. I have a friend who was out of work for 6 months.
Also when you try to get back into permi land, the first question will be how do we know you are going to stay?
I was a contractor for 6 years, the money was great, but then because of the bl00dy w2k issue and those idiots in the government flooding the market place, the money went down pan.
Remember that at £18,000 that is roughly £10 per hour
But as a contractor, you should really get a ltd company, and then you are liable for company national insurance at over 12% so your £10 has just gone down. Then you need to get an accountant, so the £10 has gone down a little more.
You are treated as the lowest of the low, last in first out doesnt even come into it. They will drop you like a stone, and it does hurt. I have a friend who was out of work for 6 months.
Also when you try to get back into permi land, the first question will be how do we know you are going to stay?
I would say definitely go for it!
I was an IT contractor for about 7 years. Various investment banks, interesting projects (no BAU rubbish) and skills always kept razor sharp. I also really enjoyed the fact that if i wanted time off to travel it was my choice, what can you with 5 weeks paid holiday?! However after 4 years in the last contract they made us go permy or leave. So i thought i would give it go. I lasted 2 years before the office politics became too much. I actually ended up earning more as a permy as i was as a contractor but it wasn't enough of an incentive for me.
I've now changed careers, but if i ever go back to IT it will be as a contractor for sure.
I was an IT contractor for about 7 years. Various investment banks, interesting projects (no BAU rubbish) and skills always kept razor sharp. I also really enjoyed the fact that if i wanted time off to travel it was my choice, what can you with 5 weeks paid holiday?! However after 4 years in the last contract they made us go permy or leave. So i thought i would give it go. I lasted 2 years before the office politics became too much. I actually ended up earning more as a permy as i was as a contractor but it wasn't enough of an incentive for me.
I've now changed careers, but if i ever go back to IT it will be as a contractor for sure.
I think it is very difficult to advise anyone on whether they should go contract or not unless you know them very well. The answer depends on so many things, particularly on your mindset and the kind of person you are.
If you are treating contracting as a form of temping until you get another "proper" (sic) job, then I would advise an umberalla company and declaring yourself as being inside IR35 - there's no point in fighting for the IR to acknowledge you as a genuine business if you dont consider yourself one.
However, if you are going into contracting as a career / life move and are looking at the long-term view then a full-blown company, accountant, insurances (Public Liability, Professional Indemnity, Employer's Liability, IR35 investigation, etc.) and a bloody-minded approach to staying out of IR35 are what you'll need. However, in the current climate you have to be really sure of yourself to do this.
Unfortunately for many freelancers* like myself, once you've been running your company for a few years and enjoting some of the freedoms it offers, then it is hard to consider going back to being a wage slave. I feel there is far to much of an attitude of "I own you, biatch" from many employers for me to handcuff myself to them. Trouble is, having been out of contract for a total of 6 months last year and several the year before, I doubt I'm nay better off financially than if I were someone's employee (or aforementioned biatch
) but that's the way things go sometimes.
(* - I've never liked the term 'contractor', to be honest)
If you are treating contracting as a form of temping until you get another "proper" (sic) job, then I would advise an umberalla company and declaring yourself as being inside IR35 - there's no point in fighting for the IR to acknowledge you as a genuine business if you dont consider yourself one.
However, if you are going into contracting as a career / life move and are looking at the long-term view then a full-blown company, accountant, insurances (Public Liability, Professional Indemnity, Employer's Liability, IR35 investigation, etc.) and a bloody-minded approach to staying out of IR35 are what you'll need. However, in the current climate you have to be really sure of yourself to do this.
Unfortunately for many freelancers* like myself, once you've been running your company for a few years and enjoting some of the freedoms it offers, then it is hard to consider going back to being a wage slave. I feel there is far to much of an attitude of "I own you, biatch" from many employers for me to handcuff myself to them. Trouble is, having been out of contract for a total of 6 months last year and several the year before, I doubt I'm nay better off financially than if I were someone's employee (or aforementioned biatch
) but that's the way things go sometimes. (* - I've never liked the term 'contractor', to be honest)
Jon is on the money.
Its a thing that your personality fits seldom the other way around.
I've just been through exactly the same thing as you and am very much enjoying the freedom and the risk is something that is offset by not having to deal with office politics.
Get in, do your work, devolve the knowledge, advise to the best of your ability and go home.
So much nicer.
Its a thing that your personality fits seldom the other way around.
I've just been through exactly the same thing as you and am very much enjoying the freedom and the risk is something that is offset by not having to deal with office politics.
Get in, do your work, devolve the knowledge, advise to the best of your ability and go home.
So much nicer.
Indeed. The freedom to say "sod off. I'm not doing that - I'm not your employee" is very refreshing.
Also, there is no such thing as pulling a sickie - if you don't work, you don't get paid and apart from the fact you're not getting your work down, few employers or employees mind as it's not as if you're getting paid whilst you're absent.
Also it is quite acceptable to say that you don't give a flying fig about the company and you're just here for the money. Try saying that as an employee - you're expected to be a "team player" and a "company man" and be there for the love of it all with the financial renumeration a welcome fringe benefit. As if.
Hello. My name is Jon and I am a mercenary. 
Also, there is no such thing as pulling a sickie - if you don't work, you don't get paid and apart from the fact you're not getting your work down, few employers or employees mind as it's not as if you're getting paid whilst you're absent.
Also it is quite acceptable to say that you don't give a flying fig about the company and you're just here for the money. Try saying that as an employee - you're expected to be a "team player" and a "company man" and be there for the love of it all with the financial renumeration a welcome fringe benefit. As if.
Hello. My name is Jon and I am a mercenary. In summary. If you have rare skills, can find your niche and will be more or less fully employed, keeping up to date with things, go contract. You can then afford 12 week holidays in the US and nice new sports cars.
If, like me, you are mainly an MS and TCP/IP bunny, who is (or was) being undercut by know-nothings with a piece of paper, then forget it. It stinks. Keeping up with the latest MCSE/MCP/Novell/Cisco costs a fortune and the income doesn't justify it.
Mike
(in an over-saturated West Yorkshire)
If, like me, you are mainly an MS and TCP/IP bunny, who is (or was) being undercut by know-nothings with a piece of paper, then forget it. It stinks. Keeping up with the latest MCSE/MCP/Novell/Cisco costs a fortune and the income doesn't justify it.
Mike
(in an over-saturated West Yorkshire)
Zad said:
In summary. If you have rare skills, can find your niche and will be more or less fully employed, keeping up to date with things, go contract. You can then afford 12 week holidays in the US and nice new sports cars.
If, like me, you are mainly an MS and TCP/IP bunny, who is (or was) being undercut by know-nothings with a piece of paper, then forget it. It stinks. Keeping up with the latest MCSE/MCP/Novell/Cisco costs a fortune and the income doesn't justify it.
Mike
(in an over-saturated West Yorkshire)
Hmmm, maybe you're looking in the wrong places/asking for too much!
I keep getting offered contracts in Leeds doing MCSE/Exchange/AD type work (and they do request the latest certifications) but am always in a contract so have never taken one up there.
I'd say 'go for it' if the market will support your desired salary and you're prepared to be flexible/take a few risks.
>> Edited by _DeeJay_ on Tuesday 14th June 09:34
I would say - go for it - there's a big world out there. You have the chance of earning more money, but more importantly, you're your own man - and even more so if you use the agency route as a stepping stone while you build up your own roster of clients.
(Me? I made the move in 1994, after 25 yrs in the corporate machine, and I've never regretted it for a minute)
Good luck
pg
(Me? I made the move in 1994, after 25 yrs in the corporate machine, and I've never regretted it for a minute)
Good luck
pg
Thanks for all the replies guys...
between you you have raised all of the issues/pitfalls I had in my mind already, plus some I hadn't thought of.
Looking at this simply, I can see two rather than four types of contractor.. The rare skills, high flyer with the late model supercar in the drive guy. Or the common or garden guy who is in contracting for a variety of reasons (not all by choice!) who drives anything from a pushbike upwards.
Obviously, income/responsibilities determine where you fit into this broad classification. I don't mean to be derogatory to anyone in this simplification, if it works for you then it's OK.
I don't know if I have the balls to take a leap into contracting from permanent employment (which might be good enough reason in itself for NOT doing it) I have about a month left on the account I'm working on, then "gardening leave" which I'm planning to use to update my skills.. (yes Microsoft!) Although I have the offer of some free ITIL Service Management training/certification by my current employer, but am wary because I've never seen it referred to anywhere else other than on the company intranet. (comments anyone)
Regards (Brian and a Red 350i)
still undecided, but better informed.
between you you have raised all of the issues/pitfalls I had in my mind already, plus some I hadn't thought of.
Looking at this simply, I can see two rather than four types of contractor.. The rare skills, high flyer with the late model supercar in the drive guy. Or the common or garden guy who is in contracting for a variety of reasons (not all by choice!) who drives anything from a pushbike upwards.
Obviously, income/responsibilities determine where you fit into this broad classification. I don't mean to be derogatory to anyone in this simplification, if it works for you then it's OK.
I don't know if I have the balls to take a leap into contracting from permanent employment (which might be good enough reason in itself for NOT doing it) I have about a month left on the account I'm working on, then "gardening leave" which I'm planning to use to update my skills.. (yes Microsoft!) Although I have the offer of some free ITIL Service Management training/certification by my current employer, but am wary because I've never seen it referred to anywhere else other than on the company intranet. (comments anyone)
Regards (Brian and a Red 350i)
still undecided, but better informed.
Another umbrella company type malarky place for ya
www.brookson.co.uk
Used them last year with no problems, and only £20/week.
www.brookson.co.uk
Used them last year with no problems, and only £20/week.
briantvr350i said:
Although I have the offer of some free ITIL Service Management training/certification by my current employer, but am wary because I've never seen it referred to anywhere else other than on the company intranet. (comments anyone)
If they are offering ITIL, take it. It is the standard for IT service management & much of it is based on common sense! Quite a few large companies use it to provide a framework for managing elements of their IT
The way i've played it i've done 5 years contracting, about 4 months of that i was out of work (when 9/11 happened) after that i got back in, so i could say overall i've had a good run. Personally i wont go back as i enjoy the perm benefits i am getting.
The best advice i can give you is if you really want to contract - is do a stint, but try to get friendly with the people you work with. I'm now permie with a bank doing rather well just because i was social with the the head honcho. Even though i know my stuff - i dont have any paper to show, and it didnt even enter into the equation as i did the job well and i had a good reputation.Its not entirely relevant these days either IMO. Too many monkeys with certificates about.
Leave a good impression and leave the door open. You might need to go through it again
Good luck either way
The best advice i can give you is if you really want to contract - is do a stint, but try to get friendly with the people you work with. I'm now permie with a bank doing rather well just because i was social with the the head honcho. Even though i know my stuff - i dont have any paper to show, and it didnt even enter into the equation as i did the job well and i had a good reputation.Its not entirely relevant these days either IMO. Too many monkeys with certificates about.
Leave a good impression and leave the door open. You might need to go through it again
Good luck either way
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