Dear Contractor Doctor,
I'm currently in a permanent job that is neither fully satisfying nor monetarily appropriate to my skills and experience level. I am thinking of going contracting but, with a lack of savings and no experience in the contracting market, I'm worried about how I can afford to hand my notice in without the promise of a job in the near future.
Any thoughts on this?
Contractor Doctor says:
This is the common Catch-22 situation for most permanent employees thinking of going contracting. You are certainly not alone.
As I explained in another guide ‘Should I quit my job before applying for
contracts?’ in msot cases you will need to hand in your notice before searching for a contract. This is because:
- Most agents will be reluctant to put you forward if you might not take the contract.
- There is the possibility that your current employer might produce a compelling "counter offer".
- Many firms want contractors to start right now, or certainly within a couple of weeks - more than your notice period.
- An agent orclient might prefer to hire someone who is a seasoned, and therefore proven, contractor.
All these factors mean that you are starting a few blocks back in the race to win a contract when competing with other contractors.
Employees with long notice periods, unless they are in very high demand in a niche sector, are unlikely to have the bargaining power to make a client wait for over a month or more before they take you on. This is something you'll need to judge for yourself.
So, you could test the market whilst you are still permanent and see if you get any interest. Agents will phone you to ask your availability and then probably rule you out due to you still being permanently employed. However, if you get some phone calls it will give you the confidence that you won’t necessarily be left on the shelf for too long if you make the plunge.
Prolonged testing in this manner is not advisable though – agents will remember you. So, just be honest with them and tell them your predicament. If you do finally hand in your notice make sure you contact each agent you have previously spoken to and let them know your circumstances have changed.
With regard to the financial situation, the switch from permanent to contracting can actually work in your favour. Some contracts are paid weekly. This means you may not have to survive a whole month on your last pay cheque before getting paid. So you could find yourself with up to 3 weeks extra money in your pocket! Even if you are paid monthly, payment is typically within a week of getting your timesheet signed. Some agencies will give you an advance. There are also timesheet factoring companies which can turn invoices into case very quickly for you.
If your skill set is high in demand and you market yourself well and chase down the opportunities well then you should be able to get yourself sorted out with a contract within 4 weeks.
The other factor to consider is the downside. What is the worse that can happen? For me, all those years ago, the worry was losing a rented flat and ending up back on the parents sofa for a few weeks - hardly dramatic really. Try to be realistic and dont' let your emotions poison you catastrophising too much. The worse fear perhaps should be "What if I don't do this?" You can always find another job if contracting doesn't suit you.