Contracting Myths - 5 things you should know about contract work
I have spent the bulk of my career recruiting for permanent positions within the Accountancy and Finance space but made the transition to the world of contracting almost a year ago.
Having now worked both markets I have noticed quite a few misconceptions around temporary/contract work and often find myself discussing these when working with inexperienced contractors or candidates considering a move from a permanent position.
"I will earn more money if I do contract work"
This can quite often be the case and for many candidates is one of the main attractions when moving to a temporary assignment. The thing to remember however is that you do not earn more money by simply commanding a higher salary. If you earn $100k + super in a permanent role, you don’t then earn $120k+ super because you move to a contract role. You will earn more money because you are paid for every hour you work (when on an hourly wage) and there may be an initial small increase in salary.
"I don't know how to calculate the hourly wage."
Over the last year I have heard several different methods of calculating your hourly wage equivalent, with the calculations coming wildly under and over the actual amount. There is no exact science and as you will not have paid holiday and some of the other benefits of a permanent role, it is hard to exactly calculate the right amount. It will also depend on the number of hours you will typically work per week. As a rough guide use your annual base salary in thousands divided by two, which will give you a rough hourly wage (e.g $100,000 per annum would be 100/2 = $50 per hour) with super on top. It may also be worth while checking out our recent Salary Guide to check where your expectations should be compared to the rest of the market.
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"My workload will be lighter."
Often when a temporary employee is brought on board, it is at a period of increased workflow and you are there to help out. This means you will need to hit the ground running and make an impact straight away, and this may well mean some extra hours. If you think you will be working 9-5 and not really given much to do then you may experience a bit of a shock. It does however present a great opportunity to add some real value from day one and broaden your experience at the same time. Temporary roles can often lead to longer term opportunities as well, so treat every temporary role as if it was permanent.
"I won’t be given anything interesting to work on."
This is completely wrong when looking at contracting roles that focus on a specific project as you will often be looking after the most interesting work available. In the case of covering a sickness leave/maternity leave/permanent recruitment process you will ultimately have to prove your worth before being given extra responsibility. However, if you do this early on then there is no reason why you can't take on extra work and use this as an opportunity to broaden your experience and make the most of the contract. You may even end up impressing the right people and it could lead to longer term opportunities.
"Contracting will make my CV look jumpy."
Several back to back contracts that do not add experience or variety to your CV will ultimately make your CV favour contract roles over permanent roles in the long term. BUT, if the contract role adds a new skill set/sector experience/exposure to your CV, then it can be a great way to open more doors in the longer term. Getting 6 months experience working for a retail business partnering with the Sales and Marketing team when you currently work in a property company for example, may be experience you would struggle to gain when only looking at permanent roles.
Consider moving into contracting?