Contractors' Questions: Should I get a new job before New Year is up?

Contractor’s Question: I’ve seen that I can earn twice as much as a contractor, doing largely what I do now on a permanent basis!

So should I do what I know a contractor friend of mine is actively looking at – albeit the other direction as she’s eyeing going freelance to full-time, and use the New Year to find a new job?

Expert’s Answer: For both you and your contractor friend, it all starts with the question ‘why?’

Motivations

In other words, and I'm addressing you now specifically, ‘Why move from a permanent role to a freelance opportunity?’

The motivations usually vary from person to person, but typically those who work freelance choose to because they want to be their own boss. That usually stands the test of time over pay.

Those who seriously want to be contractors are confident in their skills and competencies; want to work on a variety of projects during the course of a year, and want to be able to choose when and how they work and take time off. They must then work out how that they will charge in terms of a day rate. And yes, that rate is greater than the equivalent wage they would earn in permanent employment.

Not the tax situation it once was

Of course, it’s well-known that some of the tax advantages of limited company contracting have gone, and so you should gauge your likely tax implications with an accounting professional before setting your decision in stone.

Often at New Year, those individuals who have not been working may opt to work in a freelance capacity as a way to get back into a permanent role. And something else to keep in mind of course, there is much less job security working freelance!

Making the jump

But that's not to say self-employment or professional contracting isn't worthwhile. People looking to make the jump into contracting can do so in 2022 with real confidence.

As the latest contractor market report for December showed, demand for freelance workers is still increasing very nicely, with businesses relying heavily on the flexibility that only temporary workers can offer.

Rates for contractors are also rising fast and the pay outlook is bright.

A great time to act

All that said, and as your freelancing friend will likely attest, contractors considering making the move into permanent employment will be strongly placed to take advantage of the soaring demand for candidates across the board. There is also a spike in salaries not to be sniffed at, and remember, pay only forms part of the package of incentives which employers are being advised to think carefully about, to ensure they can both attract and retain the talent they need for their programmes and projects in 2022.

Whichever way you look at it, the record number of job vacancies - which sits well above pre-covid levels - means it’s a great time to change roles, whether permanent or contract.

The expert was Paul Farrer, founder and chairman of digital recruitment firm Aspire.