Recruitment HomepageLibrary Guide to Contracting

For job seekers who enjoy an extra challenge, contract working can prove to be very rewarding, both personally and financially. If your are one of those considering a change from a permanent position to contracting projects however, you should check and see if contracting is suited to you and be fully aware of the implications.

As a leading provider of contracting staff for Aviation, Engineering and Technology, IT and Telecommunications projects and activities, Parc has the expertise to advise job seekers. We can assist you to identify which type of employment would best suit you now - permanent or contract.

Why are there so many opportunities for contractors?

Increasingly across the world, companies and organisations are moving towards a flexible workforce and hiring contract staff is one of the popular ways for companies to achieve that extra flexibility. Click here for more information on the factors driving demand for contractors.

So why do people want to become contractors?

Well it is not suited to everyone but, for many, contract work provides a more attractive career option than a permanent job. If you have ever wanted to be your own boss, wanted to take more than four weeks holiday a year, earn more money than you currently do and you are not afraid of hard work or taking care of your own affairs, then contracting could be for you.

more>> See also Advantages of Contract Working
more>> See also Disadvantages of Contract Working
more>> Check your potential as a contract worker

Most of our contractors report increased income after making the switch. Their skills, their flexibility and their experience usually secure advantages over permanent staff. Even after including the insurance benefits available to permanent staff, contract staff would normally still come out on top in the pay league.

As a contractor you have more choice over when, where and how to work. We have some contractors who work for eight months of the year and take four months off. As a contractor the choice of lifestyle is yours.

Attending different client sites, working with different companies and with different teams enables a contractor gain a level of experience that a permanent employee may find very hard to match. This extra experience increases your marketability.

How do you value yourself? With contracting, it's never a question of simply what's the rate for the job. The bottom line is: How do you value your expertise, skills-set and your ability to deliver?

Your experience of delivering within different teams will develop your sense of self-confidence. Your greater control of your own finances will encourage a feeling of independence and an entrepeneurial approach to recognising the value of opportunities. Nor do contractors need to worry about office politics. So they can focus on their job and remain independent of personality issues.

Contracting can offer significant advantages over permanent employment when it comes to tax planning. Contractors are in control of their own financial affairs and therefore they are able to minimise their tax payable using the various tax planning options open to them. While a contractor's ability to minimise tax is determined by the tax laws of the jurisdiction in which they work, generally a contractor has more scope to reduce taxes than a permanent employee.

As you are now running your own business you will need to look after much of your own financial affairs. However Parc will make it easier for you.

You will have to negotiate a rate which reflects the demand for your qualifications and experience. You need to assess how much your client is willing to pay and how much you are willing to accept. You may also need to consider other features of the contract on offer, for example: will you find the work interesting? the location attractive? the experience self-enhancing?

Ensure that money is saved to pay tax when it falls due.

Most contractors are advised to hire an accountant to maximise the efficiency of their tax planning.

	Limited company
	Sole trader/self-employed
	Becoming an agency employee with Parc
	Joining an umbrella company

A contractor receives no pay when absent from work through illness. However a good permanent health insurance policy can help cover this risk. Parc have developed a very competitive package for contractors which addresses this risk.

You are responsible for your own training and career development in most cases but Parc can assist with this in certain areas.

What are the other factors fuelling demand for contractors?

The increase in use of contract staff has come for a number of reasons. As companies try to keep pace with ever increasing changes, they find that contract staff can bring with them the experience and expertise to deliver the required changes. The evolution of technology necessitates frequent re-training of staff. Contract staff with the required experience can assist companies to deliver the maximum benefits from investment in new technology and more quickly.

As companies increase the use of outsourcing, work that was previously performed in-house, is now undertaken by contract staff. Contract staff can assist companies to keep costs down as they can provide cover for seasonal work rather than having permanent staff employed all year round to cover the same seasonal requirement. Contract staff are also used on a regular basis to cover for permanent staff who are absent due to sickness, maternity or parental leave.

	Are you flexible and willing to move around between businesses, projects and locations?
	Are you willing to look after your own financial affairs in terms of saving for twice yearly tax payments, pensions and health insurance?
	Do you see work as an enjoyable challenge or do you just feel like doing enough to get by?
	Are you good in interviews?
	Does it take you long to fit in with a new team?
	Can you hit the ground running when working in a new environment?
	Can you work and complete tasks on your own?

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