Is there a perfect time to become an IT contractor?

There are several reasons why you may choose to work as an IT contractor. It could be that you need greater flexibility and your current role can’t offer this, or it could be that you’ve taken a career break and are looking to get back in the world of work.

As contractor accountants, we’re often asked the question, “Is there a perfect time to become an IT contractor?” The truth is, there isn’t a set date or time when it is best to become a contractor. You must decide when the perfect time is for you. The key things for you to think about are:

1. How strong is the contractor market?

The outlook for contractors remains promising. According to figures released by REC (Recruitment & Employment Confederation), the demand for skilled IT contractors is particularly strong. We partly have Brexit to thank for this, as companies put hiring plans and projects on hold until the final details of the divorce deal are put in place.

There also continues to be a skills-shortage in some areas of the IT industry. Some of the areas that businesses and recruiters are finding it hard to recruit for include; Cyber Security, CAD, Gaming and GDPR.

However, the market for contractors does fluctuate. Typically, the quieter months for contractors are July and August and around mid-December. It’s no surprise that these months coincide with the main holiday periods.

Recruiters will advise you that the best times to start looking for contract work is around March / April. September is also a good month as companies are keen to move forward with projects after the quiet summer months.

2. Are my skills up to scratch?

Companies are paying a premium for your expertise. They will expect you to hit the ground running. Before you choose to give up the security of employment and become self-employed, you should assess the skills that are needed to be a successful IT contractor.

If you feel that you are lacking in some areas, try to upskill whilst you are still in employment. Doing it before you leave your job will make it easier for you to secure a contract once you do leave.

3. Am I ‘fit’ to become a contractor?

As we mentioned, your client has hired you for your expertise. This ‘label’ can put added pressure on you. Before you make the decision to become an IT contractor, ask yourself, if you can physically and mentally handle this extra pressure. If you have any doubts, now may not the right time to do it.

4. Can I cope financially?

Being self-employed means, you’ll no longer have the benefit of sick-pay, paid holidays, a pension or a subsidised healthcare. You’ll have to cover the full cost of these things yourself. That saying, as an IT contractor you should expect to earn on average £400 per day. If you’re looking to work in niche areas such as Cyber-Security, this can be more than £500 per day.

As well as the loss of employment benefits, you’ll have to factor in times when you are in-between contracts.

Before making the leap into contracting, examine your monthly expenditure and calculate if your earnings from contacting (taking into account possible periods when you may not be working) will cover your outgoings.

If you’re in a permanent role and are considering becoming a contractor, or if you’ve been out of the contracting market for a while and are thinking of re-entering, download our free guide to contracting which is full of practical tips and advice on becoming a contractor.