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The Pros and Cons of Being an IT Contractor


I’ve been working as a contractor for five years now. Overall, it’s been a great experience, with the opportunity to work in many different industries and on all kinds of systems. I’ve worked with many better- and lesser-known applications, alongside hundreds of people.

Many full-time employees ask about the pros and cons of being a contractor. This article seeks to answer a few of those questions.

But first, the fine print: I’m comparing the life of a full-time employee at a single company with that of a freelance contractor who moves around (or works online) for many different companies. I understand a whole spectrum of work exists in between. Also, employment and contracting arrangements can vary greatly from country to country. Tax laws and the general work culture can make contracting less attractive in some areas. So, too, some industries and specializations lend themselves to contracting more than others.

Pay and Flexibility

Many companies are happy to take on contractors for a short engagement, although that usually means paying a higher rate. Why? First of all, a contractor is expected to have expertise that a new employee might not. Also, a contractor has to absorb many of the costs a company usually covers for employees. Contractors can charge a higher daily rate because it’s for a specific, short-term engagement.

The most common questions about contracting involve job security. I’m not sure how secure full-time employees are these days. Still, they do have a guaranteed pay (for as long as they have their job), and they generally have regular hours (unless they work in IT).

The contractor can have highly irregular hours. That doesn't just mean late nights or weekend work, but also taking a few days or weeks off before a project gets started. Contractor flexibility might allow for time to go to kids’ sporting events or music lessons every week, and that sort of flexibility is easy to get used to. It can be unnerving, however, to be home on a Monday morning wondering whether any work will come through that week.

As a contractor, you might be working for several companies at the same time. Unlike an employee, a contractor isn't dependent upon the success of just one company, so if budgets get cut and contracts aren’t renewed, you can consider yourself a little more secure than if you have all your eggs in one basket.

The fluid nature of freelance contracting means work can come in fits and starts. You have higher peaks and lower troughs. This takes quite a bit of managing. One approach that can help is arranging regular routine work—perhaps with a monthly retainer. This guarantees at least some income, and if the work itself is flexible enough to be postponed a day or two, or can be done remotely, it's easier to fit this in with other more pressing jobs.

Cross-fertilization

When working on many sites in different industries, you meet many people and pick up ideas from different environments. Some places have strict change-management practices or documentation requirements. Others are more relaxed. You learn to work within the organization’s culture, while trying to improve processes where possible.

You also get to work with many different applications, databases, storage subsystems and backup solutions. This can provide better understanding of the features and drawbacks of each component in an environment.

Working on several projects at once enables you to apply what you learn in one environment to another. Naturally, this can’t involve violating commercial agreements, but working with several environments brings cross-fertilization. For example, a performance-tuning parameter you’ve tweaked at Company A might be useful when you do a new installation at Company B.

Scope Creep

It’s important that your work and time are valued. Therefore, you must manage others’ expectations. Many tasks are simply out of scope, because they’re not what you’ve been engaged to do. That means even if you could make improvements, sometimes the best you can hope for is to mention them. If you’re expected to fix everything—even those things well out of your field of expertise—you're bound to burn up budget hours and either go back to ask for more pay or work for free. Either way, the situation is uncomfortable. From the start, it’s best to have clear expectations of what’s in scope and what's out of scope. Then, if unforeseen tasks arise, you can raise the issues early on, allowing the company to decide whether to engage you to work on them … and be sure it gets paid for accordingly.

Engagements

Every business has hurdles in getting projects approved. This can be a source of frustration, and makes it difficult to schedule work. Companies’ enthusiasm when they hear about you doesn’t always translate into concrete work. This is the two-edged sword of being a contractor: You’re more independent, but the company doesn't always feel obliged to give you work the way it would an employee. In the contracting world, reputation counts for everything. It’s crucial to foster business relationships and keep your name in people's minds.

Payments

Payment processes can vary. Some pay a decent rate, on time. Others pay poorly and late. For slow payers, if you’re charging for time and materials, it can be better to arrange a set of prepaid hours, which clearly defines the time and cost. When the prepaid hours dwindle, you can ask if the firm wants to renew the same arrangement. If there are more companies between you and the end client, they’ll each take some slice of the cake. This can significantly reduce the rate you receive, even if the end client is paying handsomely for your services.

Overall, working as a contractor has its positive side. It offers flexibility and variety, and can pay well if the work comes through regularly and you don’t have to absorb too many costs. However you work—as a full-time employee, a freelance contractor or another arrangement—it’s important to enjoy what you do and be recognized for your good work.

Anthony English is an AIX specialist based in Sydney, Australia.


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