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Contractor doctor: how often should I change contracts?

Dear Contractor Doctor,

I’ve been in my first contract for a year and a half, and the client wants me to renew for a second time.

I’m happy to renew, but am worried that staying at the same client for too long might not look good on my CV.

How often do you think contractors should change contracts and move on to another client?

Thanks

[Name supplied]

Contractor Doctor says:

Firstly, well done on securing two contract renewals. Being renewed is key for a first time contractor because it demonstrates you have staying power.

Regarding the length of time in a single contract, there are a number of factors to consider:

  • From a career perspective if you are moving up the skills ladder, say from a senior programmer to an application architect, an existing client is less likely to renew your contract for a higher role and pay you considerably more for it. It’s a perception thing. If you wish to get a contract for higher roles, your best chance of success is to move on.
  • From a personal development perspective you will learn more and broaden your experience by working on multiple client sites.
  • From a CV perspective, it always looks good to other potential clients to have been renewed at each client. Having a reputation for staying power will put you above the “contract hopper” candidates who have never been renewed.
  • From a candidate perspective, it looks better to have worked for multiple clients. The more the better, provided they have all renewed of course!
  • From a rate perspective, if the market demand is improving and you can now command a significantly higher rate than your existing client is willing to pay, then you’ll need to move on to get that rate. However, if the market demand is falling then it might be best to stay where you are and ride the storm.
  • From a financial perspective you can only claim expenses for the first two years at a client site. See Contractor Doctor: 24 Month Expenses Rule.

Many contractors initially go contracting because they want varied projects to work on rather than being stuck in the same place. After a couple of years at the same place a contractor can start to experience the same pain as they did when they were permanent, which provides plenty of motivation to move on!

On the whole most contractors tend to stay at the same client for no more than a couple of years. This gives them time to make an impact, get their contract renewed and learn something new. After that they are then keen to seek new challenges.

My advice for your specific situation would be to renew if you are happy and the price is right, and then consider moving on afterwards.

Good luck

Contractor Doctor

Published: 21 March 2007

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