Job seekers often ask us if they should take a contract role. Especially when they compare their annual salaries with the “potential” earning with daily rates.
So we wanted to share this little article to highlight what to consider when you are deciding to pick your contract assignment
This morning we did a quick search on “Seek” to see to understand the job dynamics (leave nothing for popular assumptions ;-)).
Total Permanent open jobs 108,137
Total Contract open jobs 27,007
So roughly 20% of all open jobs are contract opportunities. So we can safely assume out of everyone out five calls from recruiters will be about a Contract role.
And if you have not been regularly contracting, you might have some of these common concerns.
With two weeks official notice, it’s daunting to imagine when you start on a 6-month contract, you could be out of a job by the end of the first month. We know this is an extreme view, though a real possibility due to changes in project priorities.
Employee Engagement and Career Progression
Unlike permanent roles, you are usually not part of the regular performance cycle. You might be going through reviews cycles, but usually, there is little or no focus on your career development by the employer. Growth within an organization is also minimal as a contractor.
The Pressure to Perform
You are hired to deliver a specific task or responsibility; hence, you will join the project right when you are needed. This situation will require you to be on top of your game, i.e., quickly pick up the project dynamics, technology, and deliverables to get going. Hence it is essential to understand your role, responsibilities, deliverables, timeline, and support you can expect.
Holiday / Leave
Especially for a shorter contract, there is barely any room for long leaves so its important to discuss your planned leave before your onboarding.
Why contracting could be right for you:
New work environment, a challenging assignment will often help you bring your best. Hence it could be a pleasant change from your regular stable job without little or no challenges.
Be Part of Larger Network
You’ll be able to work with employers, roles, teams, and individuals this will allow you to broaden your professional network
You can always pick your assignment, and based on your interest and opportunities, move to your next role. You can plan your holidays and other commitment with ease.
Contractors usually get paid higher and tax benefits when you are working as a contractor. Daily rates are higher due to eminent.
On average, you would expect 25% or more hike in take-home pay compared to a permanent employee. So if you are working on Contract assignments you can feasibly be unemployed for three months of the year and still earn the same total amount as a permanent employee over 12 months.
Contracting can offer attractive daily rates, but in many ways, that greater earning potential is down to your flexibility, ability to excel in these challenging environments, and networking skills.
We are sharing a few tools to compare your permanent and Contractor salary and tax advantages.
Salary comparison so see what will be payout benefits working as Contractor
Getting started to work a Contractor
Employee or contractor – tax and super obligations compared