Managing director of Danbro, Damian Broughton, worked as a contractor before founding the national umbrella and accountancy firm. Here he shares his thoughts on the pros and cons of joining the growing army of 1.8m self-employed professionals around the UK.
Hiring in freelance experts has become the modern way of working for British businesses. With skills shortages in most industries, temporary workers who provide experienced insights into key projects have become the lifeblood of UK PLC. It brings businesses a wealth of benefits, not least a cost effective solution that ensures they can compete on an increasingly global stage.
Unsurprisingly, we’ve seen a boom in the number of people opting for the self-employed lifestyle – in a variety of forms; either working as contractors, freelancers, sole traders or setting up a limited company. 20 per cent of the UK workforce now earns money this way. That rise in freelancers shows no signs of slowing down and research suggests demand will continue to grow for the next 10 to 15 years.
Becoming self-employed is popular because it delivers a wealth of benefits and helps to accelerate career growth. It’s something I did before I started Danbro and I believe everyone should seize on these opportunities if they get a chance. I’d argue you’re better off being self-employed than you are a permanent member of staff.
What are the benefits of being self-employed?
I became a contractor after being made redundant from a previous role. As I started hunting for a new job I realised there were very few permanent roles I wanted, but there were lots of temporary opportunities. In the months that followed I worked for a variety of firms including a major bakery in Liverpool and GlaxoSmithKline in Cumbria.
In these roles I got some great experiences, was challenged more than before and I got to work with different systems and teams. All of these things made me better at my job and meant I was in even greater demand.
The real benefit of self-employment is the ability to pick and choose the roles you take on, and the chance to earn more than people doing the same job in permanent positions. Invariably, job roles seem more exciting and varied and will usually prove to be more challenging.
Crucially, self-employment or contracting gives you a wealth of new experiences and that means you can look for better permanent roles or take on more demanding contracts.
The downside is you have to be prepared to travel further for roles but you have more flexibility, a more interesting career and it helps you to feel more confident about yourself.
How will I find work?
For me, finding work was about word of mouth, making use of my networks and by taking on opportunities from recruitment agencies.
Today, the skills shortage means there are plenty of opportunities out there to pick and choose work and that means you can price your rates accordingly.
Businesses need freelance expertise and really value what contractors can bring. By taking on a variety of contracts, your experience grows and you can become even more desirable, meaning more offers of work couldl be available.
What qualities will I need?
You have to be autonomous, confident and be prepared to take the risk – albeit a low risk. Because you’ll be working with lots of different teams you also have to be a good communicator.
Being organised is also important and you have a number of things to consider when starting out as a contractor.
Perhaps the most important quality is flexibility. You have to be flexible about your working locations but, most importantly, you have to be flexible about the way you work. Every business will have a different culture and different systems and you have to be able to adapt to match them all.
What will I get paid?
The remuneration part is perhaps the biggest draw for those who abandon a permanent role for life as a freelancer. Put simply, you will get paid more and you will also take more money home.
Your skills will be in demand and businesses will pay more for your services than they would for someone providing the same services in a permanent role.
Crucially, being self-employed means you can be more flexible with the money you receive. It’s a great, tax-efficient way of operating and ensures you keep more of your hard-earned cash.
Managing your accounts is not simple, but taking on this extra responsibility is worth it. If you’re worried there are a number of options to help you and you should speak to specialist accountants to make sure you get the best advice.
Many people argue that people in permanent roles have more job security but I’m not sure they do.. There are few downsides and if you get the opportunity, give it a go. If nothing else, it will make your CV look better when you want another permanent position.
What do you think the main benefits of being a contractor are? It would be great to get your thoughts in the comments below.