Contracting or Freelancing is an employment engagement where the contractor is self-employed and typically works from home. Contracting allows the individual to schedule their work hours on a day-to-day basis, thereby providing a better work-life balance.
A study by Elance, the online freelance platform, across over 1,000 graduates in the UK, showed that over 85% of graduates consider contracting to be a “highly attractive and lucrative career option.” The concept of contracting started in the construction field, but today it includes functions such as IT, finance, HR and health services, to name a few. A plethora of small businesses has discovered the cost-effectiveness of contracting over hiring full-time employees.
Since assignments cover different fields, companies, cultures and processes, the graduate gains valuable experience even before entering permanent employment. The experience and insight gained ensures that your progression will be much faster once you join the mainstream.
How do you become a contractor?
If you have decided on contracting as a long-term career option, you need to set up your business to minimise your tax liabilities, while facilitating ease of customer interaction and building customer confidence. You would need to set up a limited company, where you would be a director and sole shareholder; this is the most tax-efficient way of working.
If, on the other hand, you are only looking to contract over a short-term horizon and do not want to get involved with the paperwork and legal obligations involved in running a limited company, you can choose to be a freelancer or contractor, and work for an umbrella company.
The umbrella company takes responsibility for raising client bills and securing payments as well as all relevant paperwork. The umbrella company pays the contractor after deducting taxes as applicable. Atlantic Umbrella is one of the UK’s leading umbrella companies, offering contractual employment across diverse fields such as construction, aviation, IT and healthcare.
Opportunities and incomes for graduate contractors
Some of the most sought-after skills include graphic and web designing, article writing, Java, PHP, HTML and accountancy skills. Contracting roles in the IT market often allow you to make more than you would in a full-time job. For instance, if you have PHP skills, you can earn an average of £325 per day, which is twice the average salary of £35,000 for a permanent IT employee.
Essential skills for the successful contractor
Every job has its unique set of skills that need to be mastered, and contracting is no different. Here are some tips and skills that you can work on:
- Be flexible so that you can adapt to different companies and cultures while using different business tools.
- You should look for work rather than wait for it. Maintain a database of potential clients and contact them every quarter or so.
- Work towards cultivating a great reputation. You want to be the go-to person whenever someone has a new project.
Contracting allows you to take your future in your own hands and is a great way to gain experience across business functions and verticals before you join the mainstream. It is also highly rewarding on both the professional and commercial fronts.