Is Contracting For You?

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I  have been contracting for around two and a half years now. This isn’t long at all in the grand scheme of things, nevertheless I thought I would share some thoughts on contracting compared with permanent employment, from my slightly limited point of view. If you are considering taking the plunge into the world of contracting, you may find this useful.

Being an Outsider

Becoming a contractor requires a slight psychological adjustment. As a permanent member of staff you become used to playing by the same rules as your colleagues. Everyone adheres to the same policies and principles, from working hours and holiday allowance to pension schemes, performance appraisals and career development plans. This leads to a subtle sense of belonging to a team, which needs to be recognised and compensated for by contractors. I am of course a part of my client’s team and I work hard to achieve success in my projects, but there is no denying that in some respects I will always be an outsider compared to permanent staff. It took me some time to get used to this.

Lack of Security

I have been fortunate enough to have never been short of work since becoming a contractor. However, by the very nature of contracting it is necessary to always keep one eye on your next job. When times are hard in industry, contractors are often the first to go, and it is important to never take one’s position for granted. It is true that anyone can be made redundant, however contractors obviously change their place of work more frequently, and this means more job hunting, more interviews, and potentially more stress. The idea of being out of work is frightening for anyone More hints. We all have responsibilities to meet and bills to pay.  For contractors this fear is likely to rear its head more often than for permanent employees.

More Paperwork

If you set yourself up as a limited company, as most contractors do, there will be some additional paperwork for you to do to manage your business finances and payment of taxes. If you hire an accountancy this will help, however you will still have at least a little admin work to do each month, and accountants obviously charge you for their time.


As a contractor you will be expected to have a certain degree of technical expertise. You will be expected to hit the ground running. Your employers will not hire you based on potential or willingness to learn, you will be expected to have already fulfilled much potential and learnt a great deal. This can be daunting, but equally it can motivate you to actually spend some time and effort on developing and maintaining your skills, and thus speed up your development. Since becoming a contractor I have spent more of my personal time learning than I ever did when I was a regular employee.

Getting a Mortgage

One aspect of contracting I had not considered was the added complications when applying for a mortgage. I have recently moved house and my first mortgage application was rejected because I did not have two full years of accounts to show the bank. Thankfully another bank was more flexible. If you are thinking of applying for a mortgage in the next two to three years then now may not be the best time for you to become a contractor. At the very least do some research. Any other application which requires proof of a steady income may be subject to similar complications.

More Money

This is perhaps the biggest draw to the world of contracting. It is no secret that contractors are paid more for their time than permanent members of staff. It is easy to overestimate the difference however. We still need to pay taxes and we do not receive any paid holidays, pension contributions, company car or other benefits. Furthermore, there will probably be times in between contracts when we are looking for work and obviously not being paid at all. That said, my earnings through contracting are higher than they would be if I were a permanent employee. If you can repeatedly find work, then you will likely receive more money as a contractor, but you must be confident in your ability to find that work.

Varied Experience

As valuable as book-reading and personal projects are, in my opinion there is no substitute for commercial experience when it comes to your professional development. As a contractor you will experience a great deal of variety with regards to projects, people, working environments and working practices. This will allow you to better understand what actually matters and what doesn’t when it comes to achieving commercial success. You will probably work with a variety of different tools, on projects of different lengths, and will have to communicate with different types of colleagues and customers. You are less likely to get bored and as scary as it can be not knowing where your next job will come from, the anticipation of a new challenge can be exciting.

Freedom From Office Politics

Successful organisations are of course made up of people who want to get ahead. Naturally everyone is aiming for that big promotion and pay rise. This is just human nature and there is certainly nothing fundamentally wrong with it. One consequence of this however can be a high level of unhealthy competitiveness in the workplace. Sometimes employees can be so eager to impress the boss that they will engage in questionable behaviour. This might be taking credit for someone else’s work, failing to accept responsibility for mistakes made or even worse, blaming someone else. As a contractor there is no guarantee of freedom from such political games, but as you are outside of the race for promotion, you are less likely to become embroiled in them.


Permanent employees are often guided towards learning about particular technologies or programming languages, according to the needs of the business. Contractors on the other hand have a greater degree of control over their professional development path. We can assess the market and find a compromise between which skills are in demand, and which areas we are interested in learning about. This freedom to be your own career development manager can be quite liberating.

Final Thoughts

If you are thinking of becoming a contractor then I hope my thoughts have helped you. It is not for everyone. There are certainly advantages to permanent employment, and the right decision will depend upon your individual circumstances, including your financial responsibilities, your skill set, and your geographical location. I took all these things into account when I made my decision, and I certainly have no regrets, but I would encourage anyone to look very carefully before you leap.

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  • Federico Orlandini

    I totally agree with your post.
    I want also add that the contractor experience can vary depending on the country where you work. In my experience, being a software contractor in Italy was hard because large part of the customer have a poor skill level. Due to this:
    1. sometimes the collaboration is very frustrating because the customer wants “old style” technical solution because it is not able to understand what new tools/approach can give it;
    2. It’s hard to sell your skills to someone that has poor technical background;
    Why this?
    Because in Italy, write software is considered a work that EVERYONE can do: “it’s just writing code” 🙁

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