What is a contractor?
A contractor is someone who is self-employed or employed, if working through an umbrella company and offers services to clients on a contract basis. The contract’s fixed period of time and the hourly or daily rate is agreed upon in advance. Usually, contractors have a specialist skill set that a company doesn’t have the expertise for in-house. For example, a company might hire a contractor graphic designer to help rebrand their website.
People often contract through a limited company or via an umbrella company. Working as a contractor with an umbrella company means that the umbrella company pays you and your income tax and national insurance are automatically deducted.
Contractors are sought after in a variety of different skilled industries including the following:
The differences between a contractor and an employee
There are several differences between being a contractor and an employee, many impacting flexibilities, job security and pay. Let’s compare the two to see which suits your lifestyle better:
|Flexible hours, days and length of contract
|Secure set days, hours and employment
|No holiday limits (unless specified by a company when contracting)
|Company’s holiday policy (usually 28 days per year)
|Responsible for finances (unless working for an umbrella company)
|Employer takes care of finances – tax and national insurance is deducted automatically from pay
|Have to set up own pension
|Employer sets up pension and contributes monthly
|Self-employed as your own boss
|Have managers and people to report to
|Fixed contract for an agreed amount of time
|Open-ended, permanent contract
|Contractor decides where and when to work
|Employer decides where and when to work
|Can set your own salary (hourly or daily rate)
|Salary provided by employer
|Provide your own training
|Employer provides training
There are many benefits of contracting as you are more in control of your pay, training, hours and the day-to-day work you do. Many prefer the flexibility of contracting as being your own boss gives you a level of autonomy other jobs may not offer.
Why should graduates choose to become a contractor?
When fresh out of university, graduates don’t necessarily have the work experience required to land a full-time permanent position. Contracting is a great way to build up your CV and work for a variety of different companies. It also gives you the opportunity to decide whether a certain career path or niche is right for you.
But doesn’t full-time employment offer more job security?
Many graduates may be concerned about whether being a contractor offers the same job security as permanent employment. Whilst a full-time role may be more secure, contract positions do last an agreed length of time and give you experience that’ll open doors in the future. With a contract role, you’re more likely to work for larger companies that look great on your CV – so it can offer strong future job security.
How to start contracting straight out of university
Anyone can start contracting, including recent graduates, but there are a few things to consider first.
Research and preparation
You’ll need to research the field you’re interested in working in to see if there are contracting opportunities. Consider your university degree and the type of jobs that would benefit from your education. You’ll need to create a strong CV that stands out from other candidates. Emphasise your key skills that the company may be currently lacking. Try tailoring your CV to each contract job to ensure that you meet all the criteria. Although time-consuming, making your application personal will ensure that you stand out.
Once you’ve carried out research and prepared your CV, it’s time to start finding contract work. The world of work relies on networking and there are countless opportunities available to those who have a strong professional network. Attending events in your field is a great way to meet potential employers and gain referrals. LinkedIn is a free resource that allows you to connect with people in your industry as well as apply for jobs. The larger your LinkedIn network, the more likely you are to appear when people are searching for a particular set of skills.
Regularly checking job boards specifically for contractors such as Worksome and ProContractJobs is another great way to find work. General job boards like Contractor UK, Monster and Indeed are also brilliant resources. If you have a niche industry, contractor job boards for specific industries exist such as Techno Jobs, ITJobBoard.net for IT contractors. Recruiters are also a valuable resource for contractors as they’ll help you search for work and negotiate your day rate.
Contracting is a great flexible form of employment that allows you to gain experience with a variety of different companies. It’s also a way for fresh graduates to find work without competing for full-time jobs.