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How did contracting start?

Why are there Contractors? Who Benefits? Why?

The background to why companies and businesses need professional contractors & temporary workers. JMK Group UK explains that contracting exists for a number of reasons:

– A company may have to complete a project in a specific timescale. It may not warrant employing a full time member of staff, but on the other hand no current employee has the necessary spare time needed to complete the project without other jobs suffering. A contractor taken on specifically for the project can help.

– A company may not have the exact skill-set amongst its employees in order to complete a new task/project. Rather than go to the expense of training their staff for this one-off job they will hire a contractor who already has the specialist skills needed.

– A company which is expert in designing widgets may not necessarily have the HR resource to handle an ever growing employee head count, and so hires a contractor (rather than an employee) who doesn't come with the social costs of things like sick pay and holiday pay.

– A company is taxed on each employee it has on its books. Currently the tax is around 13% of the employee's salary. However, if the company takes on a contractor they can save this expenditure.

 

A Transient Workforce

Each one of these examples is enough on its own for any business to consider taking on a contractor rather than an employee. Many companies can tick more than one of these reasons and several will tick all of them.

On the flip-side there needs to be compelling reasons for individuals to forgo the perks of being an employee (things like paid holidays disappear as does maternity leave and the blanket security of employment) and become a transient worker with seemingly little or no long term guaranteed work.

Some of the ‘soft' or ‘social' benefits a contractor gets in return are:

– Being your own boss
– Taking time off when it suits you
– Wider experience of the workplace in general, with firsthand knowledge of how different companies cope with similar issues
– Continual exposure to the latest trends within their specific discipline
– Actual hands-on experience and up-to-the-minute sharpening & development of their skills
– Not getting stuck in a rut with one employer.

 

 

UK PLC

But the main reason why someone would choose to become a contractor is often because of the increase in money they can earn. After all, why shouldn't you get the best reward going for all your hard work?

A contractor will be rewarded with a higher rate of pay than an employee doing the same job. The exact rate you can command depends on a variety of conditions but it's not unheard of for a sought after contractor with the right skills to take home three times the amount of a comparable employee.

Contracting is here to stay confirms Stephanie Buck, Sales Director of JMK Group UK.

– "UK PLC needs it to remain competitive within the world economy. As long as there are individuals who are happy to forgo some  social benefits, in return for higher financial reward, this industry will continue to survive & thrive. Currently, well over a million temporary workers and contractors are operating in the UK."

 

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written on2010-08-21 20:17:41

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