Is it time to go contracting? Weighing up the pros and cons
Projects are, by their very nature, temporary, so it is not surprising that a mature contract labour market exists for project management professionals. Perhaps you are considering this route?
It is a big decision – particularly for those used to the relative security of a permanent role and salary. So what are the benefits? Well, income is the big draw. In its simplest form, you accept more risk, and therefore you can receive more reward. But recognise that you are also accepting more risk.
Most contract roles have one-week notice periods, so your revenue stream can quickly disappear. Anyone who starts contracting should save a minimum of three months’ income beforehand because, at some point, your contract will end. Don’t expect to jump straight to a new contract. And consider how your mortgage or rent will be paid in the meantime. And what day rate should you ask for? I use a simple rule of thumb: take your annual salary and divide it by 100. So if you earn £45,000 a year, this equates to £450 a day. A good, long-term role for the right organisation that only pays £390 should still be attractive, though.
Is there anything else to consider? Your career development rests solely on your shoulders, so make sure you invest in yourself. Continue your professional development. Just don’t start multiplying your day rate by the total number of workdays that exist annually to convince yourself that you deserve that new car, or even worse, can afford that huge mortgage. Be conservative. Remember, you have holidays, get ill and need to have savings for when the project ends. Oh, and you will have a tax bill to pay.
Vince Hines is managing director at Wellingtone Project Management, an APM career development partner.
Other blogs in this series:
- Don’t be afraid to move industry. Your skills have universal relevance
- What are you worth?
- Being 'social' is essential to your career success
- Making the jump from project coordinator to project manager
- How good are your project management skills?
- Your career is your own personal project