New job - advice needed :/

Hi all

Just been offered a chance for a 6 month contracting role and looking for some opinions.....

I work as a permie atm and this new role would be a pay cut (unusual for a contract i guess) of ~£2k.

The new place is a good place to work for and will give me a lot of hands on experience and training on technologies I won't get the chance to touch in my present role.

My question is - would you consider going for a role like this from a permanent one, with a pay drop just to gain skills that will help you long term?

Yup ... as long as you're certain that you're going to actually get the experience and training you're expecting, and you're fairly confident you'll be able to find a job after the contract expires. Seems a safe bet.

i agree with ibm is the six month pay cut worth it if after that 6 months someone give you a job at 6K more then you were on because of the Xtra Xperence you have gaind??

YES!

holding a permanent position looks good on your CV too! shows you have staying power and responsibility (and that another company thought you were good enough to employ full time, so they might be more inclined to)

I work in IT, so this is my perspective from that sector. If you work in a different sector the situation may be different.

Firstly, I would never take a contract role for a pay cut. When you are a contractor all the employment costs are shifted to you. You have to pay your employers NI, pension contributions, and any benefits like BUPA that you would normally get from an employer. The usual rule of thumb is that your contracting rate would have to be at least 40% over your permanent salary in order to break even.

Secondly there is a whole load of extra paperwork to do. You will have to setup a company, pay yourself a salary and company dividends, keep track of your expenses, and pay taxes. The alternative (what I did) was to use an umbrella company to do the paperwork, and pay me every month with PAYE deducted but they charged me £175 per month.

Thirdly as a contractor you have no job security or employee rights. The company you work for can sack you for no reason and without any notice or compensation. You may think that you are protected by a contract clause that guarantees notice, or pay in leu, but watch out, there will probably also be one about summary dismissal in cases of gross misconduct. Your employer can define misconduct to be anything they like, and unless there is a clearly defined grievance policy (unlikely) they can use the clause to get rid of you for surfing the web on company time or stealing paperclips. In many companies you will find that your permanent colleges will treat you as a second class citizens, and in any case you won’t get invited on any company paid for outings or training.

Because of these factors, I would generally only consider a contract role if it paid around double what I could get in a similar permanent job.

I don’t want to put you off contracting, as it can be very lucrative, but you should be aware of all the downsides and hidden costs.

I'm thinking of going the contracting route in a few years time. I'm in the engineering world, and i think that the pay benefits outweigh any cons :)

I don't mind the idea of contracting and have a Limited company already - the main thing holding me back is the money - it doesn't pay more than what I'm on now........ahh choices choices :undecided

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Originally Posted by Gerschwin

I don't mind the idea of contracting and have a Limited company already - the main thing holding me back is the money - it doesn't pay more than what I'm on now........ahh choices choices :undecided

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Why don't you do some calculations to find out exactly how much worse off you will be, taking into account both the pay cut, and the extra expenses and taxes you will incur, as well as any benifits such as being able to tax deduct stuff like traveling expenses, food and accomadation, and any training courses or text books.

Then you will have a better idea of how much that valuble experence will be costing you.

Also what do you plan to do when the contract finishes? if you will be back on the job market, might you be unemployed for any lenght of time, and do you have enough savings to tide you over if necessary?

Anyone else got any thoughts on this? :)

What chrestomanci said basically..

Taking a pay cut to do contracting really isn't a good idea..

Sounds a bit iffy. What line of work are you in? Generally contracting jobs should be higher pay than full time jobs, due to factors such as instability and risk. Are you certain you will get another job at the end of the contract? I'm a fan of contract work myself (Working towards being a project accountant hopefully), but consider what you want to do after your contract, what you will gain from your contract (and how this will help you in the long run), and anything you might miss out on in taking up this contract.

As ibm said, if you're sure of the experience then it sounds like a good idea. Just go looking for your replacement job well before the end of the 6 months. Get your name in agencies and explain to them you will be available from that date, having completed 6 months experience in that job.

Contractors at my place (not IT) earn about 25% more than we do.

No holiday, sick pay, pay rises, pay packet sorted by employer etc, most would jump at a permanent contract.

I'd say stick with your current employer, keep your head down and go for a promotion/rise when you can.

Best of luck!

smallstool

:)

depends what percentage of your salary 2k is

Doesn't sound right to me, I've just moved from permanent to contractor and in my area of expertise (accountancy - the skillz that pay the billz :mrgreen: ) there is a premium of 25% and up for contractors. Also, can you be 100% sure that they aren't talking up the contract to make it sound more attractive? If it doesn't pay very well, it probably isn't as senior/skilled a role as what you are used to. Also you may have to incur additional expenses in the form of umbrella company fees (or take a lower agency rate), as well as obviously the risk of sick pay etc.

That said if it's just time to move on from your current job you could do worse than take a one-off contract for six months, then consider what you want to do after you have been at the new company for a while (especially if it is somewhere you would consider working permanently at some point in the future).

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Originally Posted by smallstool

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No holiday, sick pay, pay rises, pay packet sorted by employer etc, most would jump at a permanent contract.

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I'm surprised at that, because most companies would jump at the chance to convert contractors to permanent. Don't forget the company is paying 15 - 40% to an agency, on top of their contract rates which already contain a premium for employer's NICs, pension, sick pay (or lack thereof) etc.

Pay rises (or lack of) are one thing I won't miss, the way I see it is that permanent staff get a pay rise based on what they already earn rather than what they are worth and my experience is that people develop faster than an annual review can adjust for (not to mention that your pay rise is always one year in arrears). Whereas a contractor should always be able to get full current market rate based on their skills, by moving contracts (or just asking for more money on the basis that they have got/can get a better rate elsewhere). Try doing that every six months as a permanent employee... :mrgreen:

Yeah but contractors can be dropped like hats when required so maybe thats why?!