Are you a permanent employee – a “permie” – wondering whether you’d be able to succeed as a contractor? Here are seven signs that you should switch to contracting.
- There’s high demand for contractors with your skills
As a start, check your local job websites. They will give an indication of the demand for contractors in your city. Bear in mind that demand can be seasonal – there are less roles advertised during holiday seasons and towards the end of financial accounting periods. Speak with recruiters to gain a better understanding of current market trends. Alternatively, are you willing to move to another city where there is more demand?
When I first started contracting, I realised there are tech companies who only hire permies. Being a contractor excluded me from working at some innovative companies with exciting technologies. If there are specific companies you’d like to work with, find out whether they hire contractors. On rare occasions, those same companies may make an exception.
If there is a downturn in the market for contractors you can always go back to being a permanent employee. After all, being a permie does have benefits… literally.
- You’re great at what you do
A lot of us think we’re great testers. What’s more important for contractors though is what other people think about the quality of your work. Are you usually successful at job interviews? Do co-workers seek your advice regularly? Do you keep your skills up to date with new technologies and trends?
When searching for a contract, your skills and reputation will have a large impact on how the process plays out. It’s the difference between receiving calls about upcoming opportunities from recruiters, versus sending out job applications and not receiving any responses.
Seek referrals from former colleagues, and always continue learning either broadly or deeply about testing areas. It’s also important to be a fast learner – contractors are expected to hit the ground running. Taking one month to learn the system under test is not good value for money for your client, especially on a 3-month or 6-month contract. Similarly you should be able to learn a new issue management tool in less than a day (preferably in your own time), and taking a week would be unacceptable.
- You have a wide professional network
It’s not only what you know… it’s who you know. Networking – meeting new people and keeping in touch with those you already know – is a useful skill for contractors. Try attending meetups in your area to share knowledge, to learn, and to network with local professionals.
Network internally as well, with colleagues in other teams or departments. To help build professional relationships you should have a strong work ethic, deliver on your promises, and always add value with the work that you do.
You will change jobs more often as a contractor, so it’s important to be able to work effectively with all kinds of people. Don’t burn any bridges when resigning or ending a contract. After all, there’s a fair chance that you’ll work with these people again. It’s funny how often contractors end up working together again at different companies over the years.
- You value your time
How does your pay rate compare to market rates? Are you earning what you should be earning? Are you often working 10 hour days as a permanent employee, while being paid for 8 hour days? Imagine getting paid well, for every hour that you work…
For contract work an hourly rate is preferred, particularly for short contracts which may be under pressure to work long hours and meet a tight deadline. Your negotiation skills will be important when deciding on contract terms, after successfully passing the interview process.
For longer contracts of 12 months or more you may compromise and be paid a daily rate. Be wary though… a 12 month contract suggests the comfort of job security, which is an illusion. If there’s a downturn in profits, a change in management or a shift in company priorities then contractors will be the first to go, with only 1 or 2 weeks notice required.
When negotiating rates consider your experience, how unique or relevant your skills are, and the current supply versus demand for candidates. As Gerald (Jerry) Weinberg says in The Secrets of Consulting, “Set the price so you won’t regret it either way”. Will you miss out on an interesting project by asking for too much money? Will you get the contract and then resent not being paid a higher rate?
- You understand that job security is a myth
Multiple times in my career as a permanent test manager, I’ve had to make positions on my team redundant. This means that good people have lost their jobs, usually through no fault of their own. As permies, some of these team members had just bought a new car or taken out a mortgage with the expectation of job security allowing them to afford loan repayments.
Unfortunately I’ve also seen whole departments closed down or relocated to other countries, multiple times. When that happens it no longer matters that you’ve worked long hours, gained domain experience, been a team player or have strong technical knowledge of the company’s systems and products. You will still be looking for a new role alongside your former colleagues.
In reality, job security (or income security) translates to how quickly you can find a new job. This could mean gaining experience with a wide variety of industries, technologies and tools. It could mean specialising in an area which is in demand, such as security penetration testing. It’s important to keep your skills current, and relevant to the local job market.
- You’re able to budget for expenses
You will not get paid for sick leave, national holidays, vacations or time in between contracts.
If you have an ongoing credit card debt, or have usually spent your salary by payday, you need to consider how well you’ll be able to save for a rainy day. If you receive a bonus payment, do you usually spend it or save it?
To remain at the top of your field, you will need ongoing education in your own time. All conferences, training courses and education will need to be self-funded. Contractors are not entitled to “free stuff” from their clients. Having said that, local meetup groups usually don’t charge an entry fee; there’s a lot to be learned online for free; and being selected as a conference speaker is one way to attend conferences free of charge.
Contractors can minimise time spent looking for their next role by going through an agency. Naive contractors resent agencies for charging clients a percentage on top of their contract rate. I’ve been on all three sides of this situation at different times – contractor, agency and client. What I’ve noticed is that agencies have stronger negotiating skills and bargaining power – they’re able to charge clients more than you’ll be able to charge on your own, and you’ll have the same rate as you would by contracting directly to the client. You can also find work much faster through an agency because this is what they do, build relationships and contact IT companies regularly about upcoming opportunities. Sometimes they will have exclusive access to fill certain roles, and you would not be able to apply for the role directly. Using an agency will save you thousands of dollars in lost income when searching for a new role, so it’s not worth being bothered by what they charge for their services.
- You’re ready to step out of your comfort zone
Companies usually want contractors to start immediately, within 1-2 weeks time at the most. Which makes it difficult to find your first contract if you have a one month notice period as a permie. Resigning without a contract lined up can be daunting. Leaving a permanent job for my first contract position felt like jumping out of an aeroplane, despite the support and encouragement from my mentor at the time. With each new contract though, the process feels more familiar and slightly less nerve-wracking.
Contracting is not for everyone, you’ll need to be comfortable with feeling uncomfortable. Regularly searching for a new role, joining a new team, learning fast, working hard, and then leaving new friends for your next role… that’s contracting in a nutshell, and many people thrive in this context.
For more practical tips from Kim Engel and Jody Goodwin on working as a contractor, listen to this podcast:
There’s more to the story of contract versus permie than just an enticingly high hourly rate. I’m keen to hear from other contractors who started their careers as permanent employees. What convinced you to make the switch?
Kim Engel has worked in software testing for the past 20 years, with a pragmatic attitude and hands-on approach. She has been instrumental in expanding the awareness and practice of context-driven testing in New Zealand and Australia.
Seeing every teaching experience as a learning opportunity, Kim enjoys sharing her experience with others in articles, presentations, workshops, coaching sessions and via her blog www.isitgoodenoughyet.com