When most people think of switching careers, they think of leaving one full-time job for another. And that can be great. But there’s another option that can offer many of the same benefits, plus a few more. Read on to find out if contracting could be the perfect solution for you…
Today’s question comes from Ajay R. who asks, “I understand what freelancing is but is contracting different? I want to make sure I know what I’m getting myself into before I sign up for projects.”
Many people use the terms “freelancing” and “contracting” interchangeably, and they do have a few similarities. In both cases, you’re doing work for a company, but you’re not on-staff at that company. They’re your client, not your employer.
However, freelancing usually refers to working remotely for this client and only occasionally coming into their office for meetings. Freelancing is usually done on a project to project basis.
Contracting usually entails working in that client’s office for a set number of hours per week and for a set duration of time. For example, you could have a contract with a client to work 40 hours a week for three months.
I know: You’re wondering why anyone would give up the freedom of working from home in favor of contracting. It seems like freelancing is the way to go.
But remember that freelancing is generally done on a project basis, and a project is very rarely going to take up a full 40 (or even 30) hours a week of your time. If you’re freelancing full-time, you need to be working with multiple clients to make up that full-time income. Projects, too, can end unexpectedly and leave you high and dry.
Contracting, however, has the benefit of offering a more guaranteed income. When you’re contracted to be somewhere, you’re also contracted to be paid for that time. As a contractor, you have the freedom to know that you can leave a company once your contract is up. But you also have the security of knowing that your income is relatively secure during your contract tenure.
Remember, too, that you don’t exactly meet a lot of new people when you’re working from home. Contracting means that you’re working in a new office with new people. That can yield new friends, but just as importantly, that can yield new contacts. Contracting allows you to broaden your network as a natural consequence of just coming in to work. The more people who know you and your work, the better.
So, that’s why contracting can be better than freelancing. But is there a reason to choose contracting over a full-time, on-staff job? There sure is.
First of all, it’s important to note that contractors and freelancers are usually paid more than on-staff employees. On an hourly basis, a freelancer or contractor is almost always going to make more.
Why? Well, contractors and freelancers usually have self-employment tax to pay. Also, companies justify paying employees less since they pay some income tax, as well as often pay some health insurance and provide other perks like vacation time, free snacks, etc.
So there’s that. But contracting can also be nice because you can get a feel for a company and how it works without making the full commitment to stay there. Can you quit a full-time job? Sure, but all of those perks make it a lot harder. With contracting, it’s much easier to say, “Thanks so much, see you around” at the end of your contract if it’s not a company you want to stick with.
Contracting also lets you sample a bunch of companies and types of work and get the requisite experience and samples that go with it. When you work on staff for a company for a year, you get experience at just that one company and samples of just that work. But when you contract for a year, you might get experience with several companies and several different kinds of samples.
All of this said, contracting is not for everyone. Even if you’re working with great recruiters and networking like crazy, there’s always a chance you could find yourself without a next gig when one contract ends. (Of course, you could also find yourself without work if you get fired from a full-time job, but that’s more of a surprise. At least with contracting, you know when you’re about to hit the end of your gig. I digress.)
There are plenty of people who will just prefer the (relative) security of working full-time and on-staff. And that’s perfectly fine. But if you’re interested in broadening your horizons a bit, can trust yourself to save a bit of money instead of burning through it all, and don’t mind the risk of a dry spell every now and again, contracting could be the perfect choice for you.
Your turn! Have you had any experience as a contractor? What did you think? Let us know in the comments below!