Expand your resume by contracting

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When most people think of going into freelance work, they think of getting clients through their own sales and marketing. That is all well and good, but is there another way?

Yes, there is.

There is a much overlooked potential source of work: other peoples’ clients. What do I mean by that? Client theft? No, no, no. That’s just not cricket!

I mean: contract work.

These days there are lots of web design companies, web development firms, and advertising agencies with their own specialized web departments. They all have the need for skilled web professionals. Some might have employed all the workers they need but, in my experience, most are happy to hear from freelance web specialists.

Why would they want to hear from you? What’s in it for them?

Having a number of reliable external contractors who can be called upon as and when they are need is a huge advantage to firms, as it gives them extra capacity and the possibility of taking on work that normally, might be beyond their skill set. There are other benefits too — they don’t have to pay worker benefits to contractors, nor are they obliged to keep them on once the work is complete. In effect, a contractor is an “off the shelf” employee – only brought in when needed.

What is the down side for them?

  • Contractors are usually more expensive on an hourly basis than a regular employee.
  • Contractors add an extra element of risk to a project. Will they complete on time and will their work be of a high enough standard? This risk is usually negated to some degree by the contract they sign.

So what’s in it for you?

  • work, money and the chance to work on projects and with companies you wouldn’t normally get a sniff at
  • an improved resume and less administration work
  • increased exposure and the chance to demonstrate your skills to potential future clients

What are the downsides?

  • You will generally be paid at a lower rate than your ideal hourly rate.
  • You may have to wait longer to get paid (depending on company and the contractual agreement).
  • You may well have very tight deadlines that will require you to work long days and weekends.
  • The client is not your client.
  • The firms will demand and expect a higher standard of work from you and probably, a quicker turnaround than a regular employee.
  • As an “off the shelf” employee, you also get a new boss at each firm you work for — something you may have started freelancing to avoid.

So, to contract work or not to contract work, that is the question. Ultimately, it is a personal decision. I strongly recommend you consider contracting not only for the experience and potential clients that it could lead to, but also, it doesn’t hurt having some big-name clients on your resume.

In my next post I’ll give you my top tips on how to approach these firms.

Oh, in case you are wondering — I have 7 years of experience working as a freelance and contract web developer, and I’ll have plenty more to say about working in the web industry on this blog. TTFN

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  • http://www.evolve-digital.co.uk AndyBanks

    An excellent article. Not many people seem understand the difference between freelancing and contracting.

    The way I see it is that contractors generally work for a period of time i.e. a three month contract whereas freelancers will do work for a couple of days here and a couple of days there. This may be different in different areas but I also find that classing yourself as a contractor appears more professional than being a freelancer. I think it’s the use of the term ‘contract’ itself that helps with this.

    Generally, I find that you’re more likely to pick up a ‘contract’ actually working clientside – i.e. for the client, whereas interactive agencies in this area generally look for freelancers.

    I’ve been working as a contractor for my 9-5 work and then class myself as a freelancer out of hours. I’ve been working as an e-commerce and online marketing contractor for the past few months and would never go back to full time employment or just surviving off what I class as freelance work.

    One of the main advantages of contracting is that I get good steady income for periods lasting a minimum of three months (my minimum term) and I can then top this up by working for anyone I wish outside of these hours. It’s like a nice balance of being full time employed plus the ability to moonlight without having any conflict of interest.

    I have also started a e-commerce and online marketing blog recently to start to build up interest in my region for my services.

  • Russell

    What is the downside for them?
    * Contractors are usually more expensive on an hourly basis than a regular employee.

    What are the downsides?
    * You will generally be paid at a lower rate than your ideal hourly rate.

    Where is the extra money going? I know I typically don’t work through middle men (I direct contract), and even when I do, their cut is tiny. If contractors cost more per hour than employees… by logic I should be getting more than my ideal hourly rate (if i was fulltime), unless I have unreal expectations which is another problem entirely.

    Yes the taxes are slightly different, but (for me) it’s never been enough to make being an employee an attractive financial decision.

    You can’t both have the contractors being more expensive per hour, and getting less money per hour….

  • wwb_99

    While contracters get higher hourly pay than most employees, they oftentimes are cheaper for the company overall as one is not paying benefits and lots of other overhead costs. From a political standpoint, contractors can be very useful in some scenarios. But that is another blog post for another time.

  • Russell

    they oftentimes are cheaper for the company overall

    Yes this is true. However this does not address my comment, which is that as a contractor you do not, as he stated, often get less than your ideal hourly wage. If you did, then that would make contractors both cheaper overall, and cheaper by the hour; not more expensive by the hour (which is the actual case)

  • Toby Somerville

    Russell, perhaps I didn’t make myself clear. Generally when freelancing you have a fixed hourly rate for the type of work you are doing — let’s say $50 per hour. This may be your “public” rate (that you advertise to clients) or it may be your “private” rate i.e. the rate you actually get (the amount charged divided by the time spent). With contract work you are less likely to get that “ideal” ($50) figure, as you are typically working over a longer period of time, so you might get $40 per hour. The company you are working for might be paying its regular employees $25 per hour. As you can see, you are getting less than your ideal hourly rate and the firm is paying more that it would to a regular employee.

  • JB

    I keep telling a good friend of mine, obsessed with the notion he needs to get hired on a perm basis, that contracting is the way to go. Yes, you do miss out on things like company sponsored 401K (retirement program in the US)and medical benefits. I have found that, unless you have children, private insurance is on par with the medical benefits you’d get form your job both in coverage and cost.

    Myself, I’ve only worked two jobs in the past seven years where I was hired on a permanent basis and neither of them lasted as long as some of the contracts I’ve had with companies. Many companies where I work (silicon valley) will let you contract for up to year or longer.

    Another benefit of contracting versus full time is that you have a lot more control over your money. As a W4 employee, the government takes a nice big chunk of your income before you even get paid. By contracting you get 100%. You can invest that in capital (software, computer, desk) and write it off when you do your taxes the following year. You can even take that money and invest it, then when tax time comes you’ll have gained some extra money from the interest. This makes a lot of sense when you realize that money that you overpay the government via income tax does not gain interest in the time between when they take it out and when you get your return.

    Contracting also helps you build your skills and grow your network. Every time I move on to a new place, I learn so much from the people I work with – whether it be new coding or Photoshop tricks or even just how other businesses are run. I alway leave a contract job with a few more connections than when I started as well.

    All of this, and the really hot contracter market in the San Francisco bay area make it a no brainer to contract.

  • Russell

    Russell, perhaps I didn’t make myself clear. Generally when freelancing you have a fixed hourly rate for the type of work you are doing — let’s say $50 per hour. This may be your “public” rate (that you advertise to clients) or it may be your “private” rate i.e. the rate you actually get (the amount charged divided by the time spent). With contract work you are less likely to get that “ideal” ($50) figure, as you are typically working over a longer period of time, so you might get $40 per hour. The company you are working for might be paying its regular employees $25 per hour. As you can see, you are getting less than your ideal hourly rate and the firm is paying more that it would to a regular employee.

    Working over a longer period of time? Perhaps you mean not getting vacation time. In that case it is better to advise people to consider the cost of vacation time when calculating their bid rate. If by “working over a longer period of time” you mean working hours that aren’t claimed… As a contract you should not be doing that. If a client asks you not to charge for something you should be very lery of that client. Contract work is typically (in Atlanta anyways) paid by the hour. IE, you should be getting paid for every hour you work. This is the definition of hourly pay…

    Now of course project bids are different, where you may indeed have to work many more hours than expected, without pay. I did not understand your article to include project bids.

    Actually I think that is the problem. It sounds like you are describing the exact opposite of the market I am in. Here is you build your own clients, you are often paid on a project basis, because you are expected to bid total costs. Then you can often work hours outside of the bid, reducing your hourly rate. If you are a contractor, you are paid by the hour, and thus your actual and net rates per hour are the same (not to mistaken for net salary).

    If you are referring to working hours that you just don’t report to the client… that’s a really bad idea for a lot of reasons. So I’ll assume you are not talking about that and contracting works on a more project basis in your city ;)

  • zephyr sloan

    a very interesting and useful article indeed. we should also develop a balance between work and life ourselves especially if we are operating from home. As far as flexibility and ease of work is concerned, Jeff Paul’s marketing techniques are rather interesting for those operating from home. they are not only easy to access but are known to be helping people make hundreds of thousands of dollars in just a few months. i found his books very captivating too.

  • http://www.mikehealy.com.au cranial-bore

    but also, it doesn’t hurt having some big-name clients on your resume.

    I gather this means the contractor gets to add the work they did to their portfolio, even though they may never have contact the end-client directly. Makes sense to me, but I can see why some would not like that.

  • colorbycolor

    I gather this means the contractor gets to add the work they did to their portfolio, even though they may never have contact the end-client directly.

    I’ve always wondered about that? I’ve contracted with the same firm for over 2 years non-stop and that has left little time for me to pursue new clients on my own so while my experience and ability is greater than it was 2 years ago, my portfolio is the same. Would it be unethical for me to add the projects that I have done for the firm to my portfolio? The point wasn’t addressed in my contract and I worry that bringing it up to my boss may cause bad feelings and possible less work?

  • david solomon

    Nice blog I should say…I also feel that freelance working is possibly more useful and better than wroking on hourly basis too !
    http://www.electrocomputerwarehouse.com/