In the world of career coaching, most of the focus is on guiding people to full time employment within an organization. This is as it has been for many years. However, there is a growing focus on something else; contracting, or freelancing. In fact, according to Entrepreneur Magazine, freelancers make up 34% of the American workforce. According to Forbes, 50% of Americans will be freelancers by 2020. There’s an entire book dedicated to this concept, The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life You Want, by Diane Mulcahy.
Yes, a lot of attention is being given to the topic. I work primarily in the Seattle area, where tech is king and contract work is plentiful. An increasing number of mid-career professionals are coming to me, not for coaching toward full time employment, but for a successful shift from full time to contracting. Like all major decisions and life changes, there are pros and cons. Not everyone is suited for the life of a contractor. There are financial risks, an element of instability, and work required to maintain the level of employment to sustain your lifestyle.Whether you’ve considered contracting or not, here are some of the key benefits of going this route.
1. Flexibility. You won’t be tied permanently to a job. As a contractor, you’re most likely to work on projects, with distinct beginnings and endings. So, if you don’t like the company, the culture, or the work, you know it’s not forever and you can plan for the next step. Along with this, you have more control over your hours. Sure, the project may require a certain amount of time put in, but as a non-employee, you have more choices about leave time, etc.
2. Less Stress. You are no longer an employee with all the stress that may entail. No performance reviews, no office politics, no management responsibility. The simple mindset that this is all temporary and you’re not entrenched in the organization, frees you from many of the old stressors of employment.
3. As indicated in #1, you have the ability to move on. Most contracts are not binding, so if you don’t like working there, or find a different opportunity, in many cases, you are free to move on.
4. Potential for more income. While the financial aspects of contracting can be considered a negative (see next section), you are paid for all the hours you work. So if you work 70, 80 even 100 hours a week, as an hourly contractor, you are paid for all those hours. This is a huge shift from being a salaried employee!
5. There is no need to disclose other work you may be doing. Many companies require employees to disclose other work they have, and in some cases, bar employees from doing so. This is not the case as a contractor. What you do when not working the contract, is up to you without restriction. I know contractors that work two contracts simultaneously!
So, let’s talk about the negative aspects of contracting. Many people, as we can see from the growing number of people freelancing, have no problem with these, or the benefits outweigh them.
1. Your hourly rate as a contractor has to compensate you for not only your salary, but your social security, taxes and medical benefits. You must figure these costs in when negotiating your rate. There are many articles that detail these concerns. Smartasset.com provides one.
2. You are responsible for securing work. There is an element of marketing and sales to ensure you have a steady flow of income.
3. There is a certain amount of instability in being a contractor. You may have a month, or even two, pass without work. Can you manage your finances to carry you through these dry months, and can you be comfortable with it? On the other hand, for people with family, you have more freedom to take time off to enjoy summers and holidays with them.
4. You won’t be treated the same a full time employees. For many people this is fine, for others, there is a sense of being a ‘second class citizen’.
5. Some people feel being a contractor is not ‘as safe’ as being a full time employee. I have worked enough with people laid off from their jobs, to know there is no stability in a full time position. And yet, some people need to have that status to be comfortable.
So, if you’ve ever reached a point where you want more control over your work, give contracting a look. While it’s not for everyone, it’s clearly becoming more and more popular. There are a great many resources available to help you along the way to help you assess if you’re tolerant of this work style, and how to go about securing a contracting position. Good luck!
Andrea's passion is to see you achieve your professional dreams. Whether you are a corporate leader seeking leadership development for your employees or an individual seeking guidance in building your career or preparing for retirement, she will coach you to success.