PART 2 - Freelancing, contracting or both? Moving away from permanent work as a Learning and Development Professional
Welcome to part 2!
If you haven’t already read part 1 and are interested in learning more about the ins and outs of freelancing, then do give that a read before carrying on with this part of the blog post!
In part 2 we are going to put contracting in the hot seat and explore the positives, negatives and things to consider.
Once again, a quick disclaimer, I’m talking about this from the viewpoint of learning and development contract roles.
Whilst contracting for an organisation, you are often expected to abide by their policies, follow their working structure / hours and depending on the type of contract, may sometimes be provided with company equipment.
So what exactly does it mean to be a contractor?
Contracting is not dissimilar to freelancing. You are not permanently employed by one organisation, instead you go where your skills are needed for a set period of time. Contracts can range from anything as short as a few weeks, up to over 18 months.
You may be contracted by an organisation to just work on one project, or you may be covering maternity leave, or just filling a skills gap whilst they recruit for a permanent employee. There can be a number of reasons why an organisation may require a contractor.
The difference with contracting however, is that the structure can be similar to that of a permanent role. Whilst contracting for an organisation, you are often expected to abide by their policies, follow their working structure / hours and depending on the type of contract, may sometimes be provided with company equipment which you then return at the end of the contract.
Some contracts may even require you to go into an office or hub.
Contract work is often also paid in a day rate, this is agreed with the organisation, yourself and in some cases a recruitment agency.
How do I get contract work?
Many contract roles are advertised and filled via recruitment agencies. When I was first made redundant, I was contacted by a recruitment agency specialising in Learning and Development roles, it was from here I was placed in my first contract role with Omniplex.
If you’re looking to get into contracting, I would recommend signing up to a couple of specialist recruitment agencies, who will then have a chat with you about the kind of roles you’re looking for and your skillset / experience.
From here, when an opening comes up that matches your requirements and skills, the recruiters will then contact you and arrange any interviews and gather necessary paperwork. Here they will also discuss the day rate and length of the contract.
When it comes to day rates make sure you’re getting your worth! Always negotiate if you feel the day rate is too low for the role you are going to be expected to do. Most of the time, recruitment agencies will allow a bit of wriggle room.
If you are lucky enough to get the contract, once you are finished, your recruiter will then put you back into the ‘pool’ of talent and contact you again when the next position is available. Good recruitment agencies will contact you before your contract ends, to check in and discuss future roles.
When contracting you ‘join’ the organisation for a set period of time meaning you will need to be able to quickly form relationships.
What do you need to consider when it comes to contracting?
You may need to attend formal interviews and gather references. I was really not expecting this when I first started contracting. For some positions you will go through an interview process and will need to provide references and a CV too. So make sure you have these ready to go.
You will need to be agile. When contracting you ‘join’ the organisation for a set period of time, meaning you will quickly need to bring yourself up to speed on their policies, ways of working and any brand guidelines. You will also need to be able to quickly form relationships, as you will have an individual to report into and in some cases a line manager.
Don’t forget your timesheet! At the end of the working week (or month) you will need to submit a timesheet. This is detail of all the days you’ve worked, and some organisations even require you to complete a project timesheet too, so they can see what you’ve been working on. You will need to submit this timesheet before the deadline given, to get paid on time.
You may need to use an umbrella company. If you are not registered as a limited company and are using a recruitment agency to find contracts, then you may need to be registered with an umbrella company.
An umbrella company ‘employs’ you and pays you. It can get a bit confusing, so I’ll elaborate. The organisation using you as a contractor will pay the recruitment agency. The recruitment agency will then pay the umbrella company, who will then pay you. It sounds so long winded but honestly it is quite quick!
But, using an umbrella company means you are technically employed and therefore taxed as an employee of your umbrella company. If you operate as a limited company, then you would invoice and work out tax / VAT yourself.
Ready for it to get more confusing? Whether you can contract as a limited company can also depend on if the contract is inside or outside IR35. This is new tax regulations and inside IR35 contracts often come with higher tax rates and I believe you’re not allowed to contract inside IR35 as a limited company. (someone do correct me if I’m wrong here!)
Your recruitment agency will be able to tell you if the contract is in or outside IR35 and if you use an umbrella company, they will automatically work out all the tax for you anyway. But you do have to pay a small fee each month. (only for the months you’ve worked!)
Let me use my contracts to best demonstrate the difference in IR35 regulations. Select the plus icons to read more. Or feel free to skip over if you are familiar with IR35.
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I did a 3-month contract with Omniplex. This was classed as outside IR35, as I wasn’t provided with any equipment, used my own licenses for image editing etc and wasn’t required to work from any other premises. Outside IR35 means you are not classed as an employee of the organisation and therefore operate separately, much like freelancing!
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During my 3-month contract with Lloyds bank, I was provided with a laptop and was expected to work from an office for 2 days a week. When beginning the contract I had to complete compliance eLearning and was given a name / ID badge. If your contract is inside IR35 you are considered an employee of the company for the duration of your contract and are therefore taxed using the PAYE system.
Phew! That is a lot of info. Whether you’re contracting or freelancing I would definitely recommend doing a bit of research on IR35, just so you don’t land in HMRC’s bad books.
But I digress! Back to the things to consider…
You will often have to abide by the organisation’s set working times (usually office hours) and will be expected to be at your desk during those hours.
You will have to work notice if you want to end your contract early. Most contracts will require you to give around 2 weeks’ notice, if you decide to call things off. On the flip side, the organisation you’re contracting for can also let you go with only 2 weeks’ notice too!
You may not get to add the work to your portfolio. Depending on the organisation and their rules around copyright and sharing work, it may be that the work you’ve completed during your contract will not be allowed to be shared as part of your portfolio.
Just like freelancing, there may be quieter periods. You’re not guaranteed to jump from one contract to another. Based on your skills and the services you offer, you may experience quieter periods where there are no suitable contracts available for you.
And now for some honesty….
Just take my word on this one, the larger organisations can be messy, unorganised and toxic.
Contracting can feel restrictive. Once I became more established as a freelancer, I found jumping back into a contract felt like going back into permanent work. I sometimes struggle with having to be at my desk from 9 to 5 and needing to be present on MS Teams.
You often won’t know the details of the project you will be working on, until you have accepted the contract. Because of NDA’s and confidentiality, you may not know the exact details of what you will be working on until you have accepted a contract.
The big organisations don’t always equal the best places to work. Just take my word on this one, the larger organisations can be messy, unorganised and toxic. You may think as a contractor you will not end up sucked into the culture, but quite often you can’t get away from it, especially if you’re in a longer-term contract.
It can be exhausting having to learn company rules, policies and meet new team members every few months or so. Longer contracts can be few and far between, which means you may find yourself hopping onto the next contract every 3 or 4 months. This can be mentally draining having to cycle through meeting a whole new team of people and getting used to different rules and ways of working, every few months.
You will probably end up with a range of email addresses and accounts for different software. When contracting you’re likely to be set up with a company email address and given account access for any software they use. You’ll need to be fairly competent in using a variety of sharing platforms too, such as GDrive, SharePoint, One Drive and Dropbox.
Let’s inject some positivity….
I have adapted some of my own processes based on my experience contracting for different organisations. You get a front row seat into what does work and perhaps what doesn’t.
It’s a great way to build your CV. Contracting allows you to work across a variety of organisations and industries, which is a fantastic way to build depth and breadth to your CV.
You can develop great relationships with the organisations you work for. If you do a good job first time around then it is likely an organisation will want to extend your contract or invite you back again for a subsequent project. You will then begin to build good relationships with those working in that organisation, making each time you return much smoother.
You can move on if things aren’t working. I love taking on 3-month contracts as I find they’re long enough to have a bit of stable work for a while, but if you find you’re really not enjoying things, or don’t gel with the organisation you’re working with, they’re short enough to stick things out then jump ship!
You can earn a lot! Let’s be real and talk money. Contracting can allow you to earn a lot more than if you were in permanent employment. I was absolutely gobsmacked when I received my first contract payslip. But, just be mindful you will need to keep some away should you ever be off sick or take holiday.
It offers stability. If you’re looking for something more consistent, contracting can guarantee you a stable income for a set period. Unlike freelancing which can be much more unpredictable.
It’s a great way to strengthen your skills and gain insight. During your contract you may get a chance to play with software you don’t often use, try out new ways of working and see different processes in action. I have adapted some of my own processes based on my experience contracting for different organisations. You get a front row seat into what does work and perhaps what doesn’t.
I currently do a balance of around 75% freelance and 25% contracting. But in my first tentative months of freelancing this was definitely the other way around. For me contracting is a safety blanket and I love to fall back on it every now and again. I’m a huge fan of the shorter 6 – 12 week contracts, as I find anything longer and I start to feel the suffocation of working for corporate organisations, creep back in again.
My biggest advice for contracting? Build those relationships! It really does pay off to make yourself known. When you’re placed into an organisation show them what you’ve got! Talk to people in the team, introduce yourself and exceed expectations. Those relationships can be vital in seeing you being asked back for future contracts.
And that’s the end of part 2! We’ve now explored contracting and freelancing as separate entities, examining the pros and cons of each way of working.
In the final part of this blog series, we will define how to choose which path is right for you.
