Mike Trollope Contract, Private Sector IR35, IR35 legislation...
If you currently work as a contractor then you will be aware of the impending private sector roll out of changes to off payroll working (better known as IR35). Depending on your circumstances, you might be contemplating a move to a salaried post. On the other side of the coin, if you are in a permanent position and wondering if you should try a freelance life, you will naturally have some concerns.
Let’s start with some basic facts. Yes, there have been some firms and contractors who have abused the concept of self-employment. But they are in a minority. Even after IR35, companies (and public sector bodies) will need to supplement their project teams and offices with contractors/temps brought in on a short-term basis. And in finance and accountancy there are lots of temporary jobs now and we think that this will continue for the foreseeable future. However, you don’t have to take our word for it. For an insider’s view, we spoke to a Senior Management Accountant. She has worked with a range of different companies in London. Despite the fact she was placed in her first role by Cedar, being from the Antipodes her views are definitely her own!
How did you get into working as a contractor?
“I moved to London and started in a salaried role in a fashion company, then when I was offered a permanent job after probation, I decided that contracting made more sense for me. My first temp job was with the comms giant, Publicis. My next was with Hogarth Worldwide, one of the WPP agencies, then my old boss at Publicis asked me to come back to replace my old manager who was leaving. I returned to this more senior position but the department was offshored and I was offered another finance role at Publicis. This to-ing and fro-ing between companies is what you can expect as a contractor, but, in my opinion, this is one of the great advantages of self-employment.”
What are the advantages of working as a contractor?
“Well, as I said, you move between different jobs and different companies so you learn far more in a short space of time than you would in a permanent role with one company. Being exposed to different firms’ way of working and the varying approach taken by finance teams has been really interesting. In addition, you meet a wide range of different people who, if you impress them, can be helpful to you in your subsequent career; whether by writing good recommendations on LinkedIn or, as in my case, by contacting you to offer another job!
“Of course, one of the other major benefits of working as a contractor is that day rates are far higher than for permanent employees. That said, you do lose out on other benefits, but the higher rate of pay means that (if you’re organised) you can put money aside for pensions and the proverbial rainy day.
“Another advantage is that you can be far more relaxed at interviews. Those going for a permanent job have far more pressure, knowing it can be a make or break scenario, whereas for contractors there seems to be less stress on both sides. Much of the interview for contractors is around fit, personality and attitude. When the interviewer is more laid back that makes me more laid back, especially as I know that if it doesn’t work out then there is always another job to apply for.”
What’s the job market like for contractors?
“As far as I can see, there is a constant need for contractors, certainly in finance/accountancy. The turnaround is so quick: you can be interviewed on a Friday and start on the Monday. Everyone has different experiences but I think that most firms are happy to negotiate around start dates: after all, they expect their contractors to be flexible.”
What is the average length of contract?
“My first one was six months, however, it’s generally around three months. I have just signed a new, three-month, rolling contract. That’s not uncommon (the extension to a rolling contract), although things may change after IR35 kicks in.”
What advice would you give to someone thinking about going off payroll?
“When I first came to the UK, I applied for lots of (permanent) jobs by myself and didn’t hear back from any of them! I then went to Cedar and they got me my first contract. However, when I was asked to come back by the boss at Publicis, I contracted directly. I was lucky on that occasion, but despite that I’d recommend you go to a recruitment agency. Agencies have the relationships and a far wider range of real jobs than you’ll find if you try and do things yourself.
“Secondly, you have to be confident about what you are doing. The initial set-up process and the prospect of doing your own accounts may seem daunting. Take advice from friends who have been on this journey. When it comes to accounts, I obviously have the background to do them myself, but, perhaps surprisingly, many of my accounting friends pay an accountant and I suggest you do too. If you don’t want to, there is some very good cloud accounting software available.
“Prioritise some key aspects of what you want in a role/organisation: for example, the industry, the stage in the business cycle, how big the company is, what the cultures like, the systems you’ll be working with, the manager’s style, etc.
“Be open minded, and work smarter not harder. Be confident in job interviews - you’re interviewing them too. You can afford to be picky and aim higher - back yourself to succeed! Don’t jump on the first job you see unless it ticks your boxes, the contractor market is pretty quick, jobs are taken and pop up just as quick.
“And of course, if you really like the company and the work, there is sometimes the chance to go from the temp role into a perm one.”
What are the drawbacks?
“Not many in my view! I guess the thing that most people worry about is the uncertainty about income and benefits, including insurance and your pension. However, given you’ll be making decent money you can - and should - put some aside.
“Unlike permanent employees, if you’re not there, because you’re unwell or on holiday for example, you don’t get paid. If you are in a situation with a lot of outgoings (e.g. with a young family), then contracting may not be for you. It’s a mindset really: if you enjoy doing it then you’ll be reluctant to give it up until your circumstances change.”
Sum up your thoughts on becoming a day-rate contractor?
“It’s a great opportunity to learn new skills and have a different kind of experience in a shorter timeframe than you do as a permanent employee.
Also, it’s great to meet new people. Some will open doors for you later in your career and a few will become friends for life.”