More IT professionals pick contract than ever before

Aug 5, 2015

by Neil Sullivan

It is undeniable that Dublin is one of the worlds’ leading tech hubs, offering incredible opportunities with prestigious companies. One less well known fact, is how thriving the daily rate contract market within the industry is. There is a lack of information on how contracting works, which in turn has generated myths within the market.

With the IT contracting market booming, now is the time to dispel those myths. Here are some of the many reasons contracting could be the best career move you could make:

  1. Contracting is as secure if not more secure than a permanent job, every company of value is hiring at the moment and embarking on long term IT related projects, talent is the key requirement and smart companies do not mind if that talent comes in the format of a permanent employee or a contractor. Most contracts get extended several times and even if your project finishes an experienced recruitment partner such as Stelfox will have another project lined up for you with no down time
  2. Earnings – you can increase your take home pay by 40-60% overnight by switching to contract, you get paid more and working as a Ltd Company contractor is far more tax efficient than the PAYE tax system
  3. Flexibility – you are your own boss, you pick when you want to start a contract, many contractors take long breaks in between projects and travel extensively….New Zealand, Asia, Oz for….if you have a family you could plan your projects and take the whole summer off with the family….head of to Spain or Kerry for 8 weeks whilst all your ex colleagues are struggling to get 2 weeks annual leave approved
  4. The banks are making money again… they look as favourably on a contractor as they do a permanent employee when approving loan and mortgages
  5. You can get ahead of the curve, projections based on market intelligence and historical industry trends suggest there will be surge of permanent candidates entering the contract market over the next 12 months… to us now, secure the premium roles and have the pick of the crop

Even with all the reason’s to do it I am sure you will still have some questions so give us a call, find out what is out there for you and then make an informed decision.

+353 1 679 3182 / [email protected]

  • Martyn Birzys

    Let me give you 8 reasons why not to become contractor:
    – You have no job security after the contract end date – getting contract extended every six months is a stress over time.
    – You are not entitled to company benefits, including bonus, etc. There is weaker bond between contractors and trade unions.
    – You cannot get mortgage with some lenders, with other lenders you can only get it if you have had 3 contracts
    – Companies view contractors as working horses and try to maximize their benefit by applying pressure on contractors
    – Contractors are viewed as ‘them’, and they are often excluded from company’s social circles
    – Starting up Limited company comes at a cost and annual returns incurs cost every year, even if you haven’t traded. Winding the company down is yet another cost.
    – Bear in mind that higher daily rates are gross, you will have to pay taxes on it yourself. Holidays are not paid for, take that into consideration when doing your maths.
    – Remember that contract suits better the company and the employment agency, and your contract will be tailored as it suits them, not you. In some cases, like drivers, you may be called out for a day’s work with few hours notice, and then not getting called for weeks.
    Contracting suits some people, but do your homework well if you are considering to start as contractor.

  • Ricky Barry

    Been contracting for over 10 years. Managed a 3 month break in Australia and a 2 month break in Europe during that time. Not as often as I would like but 2 times more than when I was a full time employee.

  • David O Reilly

    Great article Neil, it’s a good summary of some of the benefits of contracting. From our experience contracting has definitely become an increasingly popular way for
    businesses to take on professionals. The reality is contractors play a pivotal role in Ireland succeeding as a knowledge based economy and more and more
    people are (voluntarily) choosing to operate this way. This trend is a global one and Ireland needs to make sure it nurtures contractors to keep its competitiveness.

    Contracting is not for everyone though. There are numerous reasons why contracting may not be suitable for certain individuals, but some very good reasons why it may suit others. I deal with contractors on a daily basis and from speaking with them the two main reasons why they operate under this structure are as follows:

    1. Contractors generally get paid a lot more than they would if they were to take a permanent role. It is true contractors do not get paid for sick days, bank holidays or annual leave days – however they still frequently earn considerably more than their permanent counterparts.

    2. It can be easier to build up required or desired experience. Contracting allows individuals to quickly acquire specialist skills / knowledge that they otherwise
    may not be easily able to. A benefit of this is they can subsequently achieve higher daily rates or alternatively get the permanent role they were previously
    not qualified for.

    There are other benefits to contracting but the above are the main factors in my experience for permanent employees making the switch to contracting; other
    benefits of contracting are:

    3. Tax benefits. Contractors operating through their own limited company have much more scope for tax planning than normal employees. There are set up
    fees and close down costs related to operating a limited company – however they are small compared to the tax saving opportunities available to those
    contractors whose circumstances suit a limited company structure. For individuals new to contracting I generally advise on having a minimum 12 month
    contract before setting up a limited company.

    4. Flexibility. A lot of contractors take time off between contracts. This is attractive and can result in nice work life balance situations.

    We have seen an ongoing trend of individuals contacting Fenero who are new to contracting and leaving permanent positions. The main reasons we hear cited as
    to why they decided to take a leap into the world of contracting was more money and experience. The other benefits associated with contracting were just an added bonus to them.

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