There’s a definite shift among IT hiring managers, away from the search for the traditional employee to securing the best “right-now” candidate. Tech Industry monitors are noticing that this year there are more and more contracting roles coming on the market.
So we teamed up with Contracting PLUS and have written this piece which we hope you enjoy:
A Guide to Starting Out as a Contractor
Employers are finding it makes more business sense to hire contract workers for project-based work. A big driver in this trend is the need for DevOps and Applications Deployment engineers.
But at the same time, in the IT contracting market, the power is tilting towards the candidates. For many IT professionals looking out on the market, this makes for an exciting vista; they can work on more projects of their choice, build up an extensive skill set of technologies and make lots of quality contacts in the profession. Contracting is now being seen as an attractive lifestyle choice.
Contract roles could range from short-term projects like data migration or providing sick cover for permanent employees, right through to longer term assignments, such as system integration. With more and more contracting roles coming onto the market, we look at what you need to know about contracting and offer you our top tips.
It’s Easier Than You Think…
There’s a lot to be gained in the contracting market for IT professionals. For a start you’ll enjoy much greater freedom in the market moving from role to role. This could be a solution to correcting work/life balance, and often, contracting pays well enough for you to devote time between contracts to your personal life.
Here at Verify Recruitment we work with clients who regularly utilise the benefits of both short and longer term contractors. We have in-house HR specialists who will draw up the necessary contracts.
Other services we provide for contractors include strong on-boarding to the contracting process and ongoing interaction with the client on contractors’ behalf. This would relate to extensions, rates, timelines and projected workload.
In terms of getting paid, again, it is much easier than often perceived. You have a number of options, from setting up your own company, to using a Managed Limited Company or an Umbrella Company.
Contracting PLUS offer Accounting and Taxation solutions to suit the professional contractor. Whether it is a Managed Limited Company, or an Umbrella Company, all of the financial accounting, company admin, invoicing and processing of payments are taken care of for you. If you are a long term contractor, even having your own company is straightforward with Contracting PLUS’ Contracting365 package.
It is imperative to ensure you are compliant and working within Revenue guidelines, so it’s important that you speak to reputable accounting providers who can provide you with proper guidance and support.
Captain of Your Own Ship…
Although you must work to deadlines, contracting affords you the opportunity to be flexible. You can decide what projects you work on, how long you commit yourself to a role for and the length of time that you’ll take off between roles. These are the results from a survey that was taken by ContractingPLUS and ComputerScope.
Ruadhri McGarry, Operations Manager, Verify Recruitment
As a contractor, it is your responsibility to provide for your retirement, which may sound like a daunting task. However, there are ways and means to do so and also to ensure you are covered in the event of being out of work due to injury or illness. Contracting PLUS’s sister company, CWM Wealth Management offer free wealth management advice to all of their contractors. They advise specifically on Executive Pensions and Income Protection options, some of which are subject to generous tax relief. It’s always worth looking into these plans, and seeing if they are feasible for you. It may be also worth looking into private health insurance, if you don’t have your own plan already.
You Stand to Earn a Higher Take-Home Figure…
Contractors command higher rates than employees for a number of reasons. Firstly, contractors are only paid for days worked, and there are fewer costs involved for the agency/client, as they don’t pay Employer’s PRSI, holiday pay and sick pay. And secondly, as a contractor, you are in a position to offset a range of business expenses that you incur yourself for the role. Your business expenses will reduce your taxable earnings and effectively help you increase your net take-home pay.
Something that’s also vital is to make sure the daily rate in any contracting role you’re offered would work out more than your current salary.
The best approach would be to compare like with like: work out what your current net earnings are, and a reputable accounting provider can provide you with a personalised estimate of net earnings as a contractor, based on the daily rate that you have been offered.
A good rule of thumb is that the contracting rate needs to be approximately 20% more than the daily rate of your current role.
Keeping Ahead of the Market
The obvious contrast between contracting and permanent employment is the difference between ongoing change and stability. Neither are necessarily bad things. For contractors there’s constant change, which is of little consequence, once you keep your skills updated and relevant to market demand and there are lots of contract roles available that have higher rates than permanent roles.“2014 has been a fantastic year for the contracting market in Ireland with the recent job announcements across a diverse number of sectors. Contracting is now being seen as an attractive “lifestyle” choice with many benefits. We have seen a lot of activity, particularly in the IT and finance sectors but we have also seen very strong activity in pharmaceuticals & construction. With skill shortages in a number of areas in Ireland, an increasing number of foreigners are being attracted to work in Ireland on short and long-term contracts. It is a trend we are expecting to continue well into 2015”.
Michael Holden, Director of Sales and Client Relations, Contracting PLUS
Some technologies can change at a relatively fast pace; for example, two years ago when people were discussing the speed with which Ruby on Rails caught on in the new IT markets, they’d refer to Twitter which used Ruby extensively in building its infrastructure. However, recently Twitter have started using another technology called Scala for their back end services and now expertise in functional programming languages are in demand. Previously, skill sets like this were only found among academics in computer science faculties.
Contracting for developers can be a useful way of expanding your technical knowledge base, even if the exposure is relatively short term.
Contracting is certainly one way of boosting job satisfaction; you’ll get a panoramic view of what’s going on in the IT industry and it’s very unlikely you’ll ever get bored. It also comes with the strong possibility of travel and foreign assignments.
Once you get your support system of compliant tax advice, and private health and insurance plans up and running, you’ll be able to focus on the code. And it’s entirely possible that you’ll get a taste for being your own boss and the prospect of taking the next step and setting up your own business will be all-the-more attractive.
To learn more about Contracting & the roles available contact Verify Recruitment for more information and email Contracting PLUS or call them on 1800 54 54 22 for more information on contracting, the solutions available to you and a personalised estimate of take-home earnings.