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  • Annette Corbett

What are your contracting options, and which will work best for you?

Updated: Feb 20

The what, how and why of contract types

Last week I blogged about how contracting can provide learning and promotional opportunities, as well as a solution to a toxic workplace situation.

But there are different types of contracts and different ways of contracting (and for each, your experience as a contractor may be slightly different). I’ll share what has been typical for me, in the hope you can someday see yourself in that space too, rather than remain in a working situation that no longer, well, works.

Fixed Term Contract (FTC)

This effectively gives you (more or less) the same benefits as a permanent employee (“permie”) - you’ll work the same office hours as your colleagues, have the same holiday entitlement, pension contributions, bonus eligibility - the only difference being your role has an end date. This contract type differs from its counterparts because you won’t be considered an “SME” or “consultant”; you'll have been hired for a particular skills set for which you’ll be paid the market rate (potentially with a small bump because its a contract) but you'll slot into that role with no expectation other than to deliver on the skills you demonstrated in previous roles and at interview.

This is the least pressurised of all contracting options and a great first step into contracting (and, I’d argue, the best possible starting place for the uninitiated). Day rate contract Here, the waters get slightly murkier on all counts. Chances are you'll be working typical office hours but I’ve found there is greater flexibility about where you work. Remote working (with some in-office attendance when necessary) suits me best and day rate contracting seems to have less arbitrary rigour about where you work from. So, if you have caring responsibilities or a particular need (or desire) to have flexibility, day rate contracting will offer you that option (and, arguably, a fair trade off against perceived lack of "security"). You’ll be earning a higher rate of pay (hopefully) but for this there will be (often unspoken) expectations of what you're expected to deliver.

For example, as a day rate contractor, I’ve been asked to put lipstick on a pig, polish a gigantic turd and perform minor miracles without the genie or lamp. It isn’t unusual to be told “you're the expert, here to tell us what our vision is”. The lines can become blurred between reality and wishful thinking on what is possible for you to achieve, so be crystal clear on what your role is from the get-go (and what needs to be in place for you to deliver on that). Reporting into one particularly odious programme manager, I was told “you have to do [insert mission impossible task] because that’s what we're paying you all this money for”. Thankfully he was the exception, not the rule, but be aware that you'll need to deliver, not only what you say you can, but oftentimes that extra extra mile too. The technicalities of a day rate contract can be quite nuanced - inside and outside IR35 status; umbrella companies, working through your own company - all a possibility. But advice on these should be sought from someone far more experienced than me! Freelancing There is no “one size fits all” with freelancing and my experience has been very different to some of my industry peers. It is, imho, the utopia of contracting.

The ability to work, but without keeping arbitrary office hours and forcing your home life to fit around your job. All those daily activities; school runs, trips to the gym, study time, can be taken without asking someone’s permission. Uncapped holiday entitlement (for which of course, you will need to finance) means you can take the four weeks off in the summer and not have to worry whether this impinges on someone else’s holiday plans to ensure “cover” is in place. And Christmas! No, drawing straws for who gets to work and who gets to spend the run up to festivities with their family. Like the day rate, you'll be expected to bring a weight of expertise, but you're unlikely to have as much access to grassroots employees or people you ideally need to speak to in order to gain some much needed clarity on the task at hand. Freelancing requires a hustle mindset, not only to secure a continuous stream of work but, as part of the work you have been asked to do. No one is going to hold your hand or onboard you; you'll need to do all the groundwork and stakeholder mapping yourself and figure an awful lot out as you go along (but with significant less grace period). There will be peaks and troughs in this most fluid way of working and it’s important to have a financial buffer and be prepared to execute a contingency plan (see day rate roles) in case you hit a dry spot. Freelance work relies heavily on recommendations and word of mouth so networking tends not to be optional in this space. Final thoughts... For me, day rate contracting and freelancing have provided a framework I can work more flexibly within (that isn't to say permanent roles, don't, they simply tend to be unicorns) and I’ve been a far more present parent and had lots of time to work on side hustles and things I enjoy as part of this flexibility. But anyone that comes from a predominantly permie background shouldn’t underestimate how different these worlds are. Your “security blanket” isn’t just removed, your attitude has to change. A growth mindset will be so important (but think of those skills you will be bolting on as a professional). A skin like a rhinoceros hide also comes in handy! I’ll be covering the pros and cons behind these contract types in next week's blog which you'll find here (make sure you sign up) or over on LinkedIn.

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