ServiceNow Professionals – Contract or Permanent?
I speak to a lot of ServiceNow Consultants who are currently permanent employees and are considering permanent, mainly due to the lure of the money – with some companies (mainly the big banks) offering as much as £650 a day for experienced developers, why not quit your job and earn some serious money!?
My aim is to support everyone that I work with in their career choices and offer honest and neutral advice to help make an informed decision as to whether to stay where they are (yes I do advise this sometimes), become a Contractor or consider a new Permanent role.
With this in mind I thought I would write an article for those that are considering a move as to the positives and negatives of taking a step into the unknown and becoming a contractor.
I always like to start with the good news! There are many advantages to starting up your own business and becoming a contractor:
- The Money! – The first thing that attracts most people to contracting is the money, the current average rate for an experienced ServiceNow Developer/ITSM Consultant is £500 – £550 per day, this could see you earning up to £132,000 per year (based on working 48 weeks a year.. you need to take some time off!)
- More Independence – One of the most personally rewarding parts of contracting is having the ability to choose when you work, how long you work for and where you work. A lot of Consultants I speak to are sent all over the country by their employers and they want to become a Contractor so that they have the ability to choose work closer to home.
- Get Involved with the Best Parts of The Project – Another benefit of being a contractor is the fact that clients will bring you on board due to your technical expertise, and due to the expense of having you on board, will only use you for the core development/analysis which are the most interesting parts of the project. Once this is done, you can hand over to someone else to do the maintenance.
- Gain Skills Quicker –In order to be a successful contractor you need to know enough about ServiceNow to be able to make a positive impact on any project you join. However; you will develop you existing skills very quickly due to the diversity of projects/industries that you will work in as a contractor. You may work within the financial/telecoms/publishing industry all in one year and develop a variety of ServiceNow modules such as HR and Project Management. Although the technology used is essentially the same, you will be making your rare skillset even more desirable by building up these skills.
- Holidays – Great news! Between contracts you can take as much or as little time off as you like. You are earning a lot more than you were so you need to work less hours to make the same amount of pay.
- No More Office Policies – Some of the people I speak to, hate the bureaucracy within their offices…. Why should you have to seek approval from a whole line of Managerial staff to get the promotion/pay rise/training that you need? Now you are your own boss you can choose which skills you develop and if you want a pay rise… choose a better paid contract.
- Improved Work/Life Balance – A lot of Permanent staff feel a lot better once they have control of their own destiny and become a contractor. If you want to use the extra money you’re earning to take the school holidays off with your children or learn a new skill away from ServiceNow you can. Or if you would prefer to work as much as possible and take no time off… you can choose to do this too.
With all of the benefits of becoming a limited contractor and working independently, I am sure your pens are poised and waiting to hand your notice in and start looking for a contract. However; before you are blinded by the positives, there are some challenges to becoming a contractor that you need to consider first.
- Securing Your First Contract – Now you have made the decision to start contracting the first thing you want to do is find a contract so that you can hand your notice in knowing you have secured work right? Wrong! Most companies recruit contractors because they need someone now, not in 4 weeks. You may find that you lose out on a lot of positions due to other seasoned contractors being immediately available. You may need to take a step into the unknown and hand your notice in and then start looking for a contract. This can be a scary prospect as it could take a while to find a role.
- Safety Net – One of the biggest draw backs of working for yourself is that you will no longer be paid if you are ill, or receive any benefits such as pension, private healthcare or holiday pay. I have seen contractors have to take long term sickness and the stress of knowing they were not earning money had on them. This is something that should be considered, I advise all new contractors to put money each month aside to compensate for the times they are not working.
- Downtime Between Contracts – Although you may use some of this time to take a holiday, there is no guarantee as to when you will find your next contract. August is a very quiet month, if your contract ends in this period you may find yourself struggling for work and this could in turn take away your ability to choose where your next contract is located and how much you will earn.
- Skills and Development – As an independent contractor you have no HR department to ensure that you are properly trained and qualified to fulfil the role you complete. In ServiceNow this is less of an issue as you will encounter the latest technologies on the job.
- Time Spent Running Your Business – Once you are in charge of your own destiny, you are also in charge of your own business administration. This includes invoicing, reporting to HMRC and chasing up unpaid invoices. My advice to minimise this is to find a good accountant who can guide you as to the best processes to follow.
- Invoicing – Something else that needs to be considered is the fact that you will not be paid as soon as you invoice a company for your time. You will typically invoice either weekly or monthly and will agree “payment terms” with the agency or business that you are working with. This will usually range from 14 – 30 days. This means you could have to wait as long as 60 days from staring the project before you get paid.
- IR35 – This is tax legislation that you need to be aware of. Falling foul of this legislation will take away many of the financial benefits of contracting. Again your accountant will be able to advise you of IR35 best practice.
This article is not intended to either convince people to become contractors or scare them into staying in permanent employment. It is merely a neutral view on the advantages and pitfalls of becoming a contractor. If you were a permanent employee and have made the jump into contracting, please comment with you experience of the positives and negatives of working for your own company.
If this is something you are considering and would like some advice, please do not hesitate to contract me via email firstname.lastname@example.org or phone: 0121 231 3065