Things you should know before committing to life as an independent contractor

The Australian Bureau of Statistics estimates that there are now one million independent contractors, representing 10% of the total workforce in Australia. It's a significant, growing sector and one in which the IT profession figures strongly.

The decision to become an Independent Contractor (referred to as Independent Professional - IPro - by Entity Solutions) can be exciting and scary. Exciting because of the appeal of becoming your own boss - work for a living and do not live to work, work when you want, where you want and for whom you want. Scary because there is no financial safety net or guaranteed monthly pay packet.

IPros are responsible for sourcing and retaining their own clients. They have to manage all aspects of their business from contract work through to their own administration and invoicing. There's no one else to help.

Making the decision

Why someone chooses to become an IPro is often thought to be a question of: were they pushed or were they pulled? Is the rise in IPros due to retrenched professionals turning to contracting when they can't find another full time job or are the lures that strong?

According to a recent survey by Entity Solutions and Monash University involving more than 250 Australian IPros, it's resoundingly the latter. IPros choose to engage in professional contracting because of the sense of freedom, variety of work and perceived ability to earn more. Push factors such as being laid off, fear of job loss, difficulty in finding work and the tight labour market play no role for the majority of IPros. This is important because it means that IPros begin their consulting life with positive expectations.

If you are considering becoming an IPro it may also ease some of your concerns to know that this positive attitude is a feeling that lasts. The overwhelming majority of IPros are happy with their decision. Eighty per cent of IPros are satisfied working as an IPro and 87% are satisfied with the kind of work that they do.

Personality

The survey also shows that IPros tend to be proud of their work. They feel happy when they are working intensely, are enthusiastic and energetic. These are all signs of people who are matched to the right job. Their sense of personal well-being is high and this is no doubt an important contributor to their job satisfaction.

The independent way of working inevitably helps to build confidence. Eighty five per cent of IPros feel they are prepared for most of the demands in their jobs and 88% are comfortable that they can usually handle whatever comes their way.  It's a career choice that helps to develop highly competent and self aware individuals.

Clients

Far from being a necessary evil, it's nice to know that as an IPro, you can expect to feel a strong connection to your clients.

One in two IPros slightly or strongly agree that they would be very happy to spend the rest of their career working for their current client organisation. The same number feels as if their current client organisation's problems are their own. 

For many this sense of commitment runs both ways. More than 70% of IPros believe that their client organisation cares about their opinions, is there to help if they experience problems, and that the client takes pride in their accomplishments at work. When it comes to developing trust, most IPros feel that their client organisation has kept their promises.

However, not all organisations are completely supportive of IPros nor do they always consider their IPros' needs. This is why it is important to try to ensure that your client's work culture matches your requirements. If you need to feel as though you are part of the "family", you might want to think twice before engaging with a client that holds contractors at arms length.

Keep up your contacts

Social networks are essential. Beside the obvious fact that they may deliver your next contract, social networks help to keep skills up to date and are an important source of peer support. New IPros should consider strengthening their social ties by establishing a presence on sites such as Facebook and LinkedIn. Active memberships of relevant professional associations such as ICA can also help.

The role of an IPro doesn't suit everyone but for those who understand and are prepared to deal with the down sides, there are many compensatory benefits. It's much easier to avoid becoming enmeshed in office politics. Your experiences and advice often hold more sway than an employee's. There's constant change and stimulation to keep you engaged in your work. And there's the job satisfaction and well-being that comes from being matched to the right career choice.

Before leaping into the world of consulting you should also give some thought to the downsides of working for yourself. There is no such thing as holiday pay or sick leave. If you don't work, you don't get paid. There are no staff benefits. Keeping your skills up to date is your responsibility. You'll often be working on your own. Clients break contracts. 

There is help out there...

In Australia, there are professional engagement services companies which provide the corporate engagement structure through which IPros can engage with in a risk free, efficient and compliant relationship with no administrative burden. This provides flexibility and control for both the IPros and the companies which engage them to a fixed term, project based relationship, leaving all parties to focus on what they do best.

About the author 

Matthew Franceschini is CEO of Entity Solutions. Entity Solutions provide the corporate engagement structure through which IPros engage with and are engaged by the business sector, most commonly for fixed terms or on a project-to-project basis. For more information, go to www.entitysolutions.com.au, email enquiries@entitysolutions.com.au