The Darkside of Contracting
This week I am announcing the online workshop: “Becoming an Independent Consultant“. It is for people interested in becoming a contractor in the UK. If you have an entrepreneurial spirit, and you want to make 2x your income, this event is for you. You can register for it here.
This newsletter will reveal the challenges I’ve faced in the contracting industry. It is not meant to scare you, but educate you.
It’s great to know all the benefits, but a measured person also knows the challenges. This will give you food for thought when deciding to take the leap.
Understandably, there are some people who encounter these challenges and give up. I haven’t seen many of these people (if any), but I’m sure they exist.
With this in mind, let’s get started!
Things you should know about
Here are some key things I want to discuss in this newsletter:
- Long breaks
- Permie vs Contractor
- Let’s talk leadership
- System failures
- Your interview is yesterday
- Give me my money!
So with that said, let’s go!
In mid-September 2022, I explored having a long “career break”. I calculated that I should be able to do this for 4–5 months. This is because my partner and I had an emergency fund. Plus I also had some cash-monies in my own account.
This was great because it gave me the opportunity to restructure my business. It gave me the time to soul search and find deeper meaning. There is no way I would be able to do this if I was in my last full-time permanent role.
Where is the downside you ask? As this is not a “usual thing”, you can sometimes second guess yourself. The side hustle may not be hustling as much as contract money. With that in mind, you think to yourself, will I ever get a contract again?.
I admit, I had 2–3 day spells of “What the hell am I doing?” and then I’d snap out of it. Overall, considering most people, I believe I handled it pretty well; but not everyone will.
What kept me sane was having other contractors in the same boat and talking to them regularly. In addition, I had knowledge of the fact that this season was a poor season to get work anyway. Plus I wanted the break! Finally, my partner and immediate family were super supportive.
I also kept my recruiter leads warm, and continued to refine my CV whilst applying for roles.
Mitigations to remember:
- Always stack your emergency fund for situations like this. Ensure it is an absolute minimum of 3+ months
- If you can plan for breaks, do it, if it makes financial sense
- Gain the support of family and friends
- Make sure to check in with others who may be in the same boat
- Ensure you do something meaningful or productive on your break
- Stay active with recruiters and contract applications
Permie vs Contractor
In my first contract, I had people indirectly judge me because I was a contractor. It’s like my 12 years of service within the NHS meant nothing!
In my view, this is a small minority. Even if it was a bigger majority I would not be phased. Unlike some contractors, I chose this path. There are many people who did not want to become a contractor. I have typically met Gen X’rs or baby boomers who:
- Became one due to a redundancy
- Do not like the “stress” of the upkeep
- Are used to the “cushion” or idea of permanency
I hold no judgement over these people as their logic makes sense. Contracting is not a logical path for most, but when you understand it, it’s a no-brainer for some.
Getting back to the point, I use my professionalism to speak for itself. This is portrayed in a number of ways:
- Constant communication employing emotional intelligence (EQ) skills
- Self-monitoring and conflict management in challenging situations
- Sharing knowledge of and implementing world-class project methodologies
- Seeking and implementing improvements
- Lending an ear to times of trouble and despair
In other words, if I provide value, others will defend my corner.
Mitigations to remember:
- Know your worth. Be confident in your abilities. Trust your experiences
- Let your value speak for itself
- Do not create unnecessary conflict
Let’s talk leadership
Just because you are in a position of power, doesn’t mean you’re a leader. That can be sometimes all too noticeable when you are contracting.
Unfortunately, organisations are littered with poor leaders. This is due to many different factors including:
- Lack of training
- Lack of accountability
- Personal influences
The leaders heavily define the tone of the culture, which has a ripple effect. Some leaders create a “clique-effect” which can leave you isolated.
As a contractor, it’s best not to take it personally, remembering your contractual powers are different. You do not need to get involved in their politics. You don’t even have to stay in the organisation. You just need to get the job done, and move on.
I am predominantly a value-based person. This means that a lot of my decisions are driven by what I believe is important to me. If your lead is giving you unnecessary lip, you can professionally make your exit. Don’t just take it because of money.
There will be consequences financially, emotionally and mentally, but you need to make the decision based on your circumstances.
Mitigations to remember:
- Use self-monitoring and EQ skills to navigate various leadership styles
- Humbly assume your position as an expert to deliver value to your team
- Aim not to take things personally
- Do not take nonsense from anyone
Something closely related to leadership is the system. This is essentially the processes and policies that support the business. There are some instances where they are non-existent.
This can make things frustrating as it means that it is slow to get things done. This may not always be a bad thing, but it is dependent upon if they are asking you to do the impossible.
What do you do in this situation? We adopt the locus of control model and focus on what you can control. In addition, you focus on things you can also influence.
This is going to be a combination of trying to solve your tasks, and fixing parts of the system. The great thing is, the second part positions you as even more valuable. This, in effect, could create you more opportunities.
You most likely are going to also have to connect with a lot of people. This looks like having meetings to try to understand the barriers. It also looks like coordinating people to tackle some of these issues.
Mitigations to remember:
- Focus on what you can control and clearly identify this
- Manage what you can influence. These are usually people
- Speak to as many people as possible to understand challenges
- Become a solution finder (if contracted to do so)
- Coordinate people to take the right course of action
Your interview is yesterday
When I received my first contract interview, the agent gave me 48 hours to prepare. I thought “this is not enough time”. I soon came to realise this is a normal thing.
I have had instances where agents have asked for the same day, and some have allowed a week. It can be a little intimidating at first, especially if you are not used to at least a week’s grace. But over time it gives you thick skin.
This edifies the need to know your generalist and specialist niche pretty well. It also stops you from applying to just anything. You are in a strong position once you can confidently articulate what you have done. This is looking at responsibilities and achievements.
I find that really knowing a framework well and applying it to experiences helps. If you are a Programme Manager, and are familiar with MSP, use that framework and talk around it. It allows you to express keywords that make the interviewer rate you.
Mitigations to remember:
- Don’t be afraid of quick succession interviews
- You don’t have to go ahead with it. But I encourage you to do so
- Stick to generalist and specialist roles that make sense based on your experiences
- Create a crib sheet of questions and answers
- Use the STAR-L method for interviews: Situation, Task, Action, Result and Learning
- Use frameworks to help structure and articulate your answers
Give me my money!
Contracting is not a charity. Contracting is not a permanent role. We, as professionals, have different standards. We expect to get paid as per contract terms.
For those doing Outside IR 35 roles, these contract terms can vary. They can be milestone based or regular payments. How payments are done also varies. Here is a general process to understand:
- Before you start a contract, some sort of commercial arrangements are made. This is from a recruitment and/or procurement perspective. A requisition is raised, authorised and commercial processes begin. This is all to say a certain amount of money is allocated to your contract
- Once you have won the mini competition for works, you need to agree to (or negotiate) terms of your contract
- Once happy you sign the contract and start and begin work
- If you have reached a milestone and the commissioner of your work is happy, you issue an invoice
- This invoice is usually uploaded onto a payment system for finance to authorise payment
- You should be paid and receive a receipt, acting as proof of payment
The latter part does not always happen smoothly. Organisations forget that contractors are people too. Because they do not have the same payment rhythm, they sometimes take long.
In these situations, you need to be clear from the get go that you will expect to be paid on time for your works. If they don’t pay you, you have every right to stop working. Would I encourage this? I’d leave that for you to decide based on your values, and their working culture.
If you are working Inside IR 35, the process is a little different. The difference is, the payment arrangements are made between:
- End-client organisation
- Umbrella company
This is what the process looks like:
- Assuming you are already signed up to an umbrella company, they will work with the recruitment agency
- Once you have accepted a contract, the umbrella company and agency will have their own contract between themselves
- The agency gains commission for acting as the liaison between the end-client, umbrella and contractor
- They also collect payment from the end-client and pass it onto the umbrella so that they can pay you. This also means they can get their cut of the pie too
- This is only made possible because you need to sign a timesheet at the end of each week. This logs your hours and is sent to your timesheet authoriser for signing. This is usually the head of department, hiring manager or director you were assigned to
- The process is done on the agency’s online timesheet portal
- You also usually have a time window for when you need to sign the timesheet, and when they need to authorise it
Sometimes you forget to sign your timesheet, and sometimes they “forget”. Either way, it can be frustrating. Don’t be afraid to remind people.
Mitigations to remember:
- Ensure that your contract terms are conducive to you being paid on time
- Be clear on the process for getting paid
- Create an invoice template and send your invoices on time. If you have an online system it can do this for you
- Remind your commissioner or authorisers using email, phone or calendar invites
- Evidently highlight your works produced either on an invoice, highlight report or other means
- Don’t be afraid not to work until you get paid. Assess this well before you make a decision like this
- Payment regularity can vary. Be clear of when you should get paid
- Ensure your finances are in order. Save for an emergency fund
The key takeaways are:
- Long breaks aren’t always bad. They can be seasonal and an opportunity to mentally reset
- It doesn’t have to be Permie vs Contractor. Be clear of who your allies are, and let your value speak for itself
- Leadership is a luxury. You’re not going to always get it, so sometimes you need to lead
- Systems do fail. If they do, try and work out why
- Your interview is always yesterday. This mindset will keep you prepared for your next one
- You are not a charity! You’re a professional contractor who deserves to be paid on time
To summarise, there are sticky roads on this journey, but you can overcome them. Contracting, in my view, is an entrepreneurial endeavour. If you have the right mindset, you’ll overcome all of these challenges. It doesn’t make it easy, but there is always a way. Always.
This newsletter is not supposed to deter you, but encourage you to take action. I never had this level of detail, but I did have some awesome people open the door for me. I hope I can do the same for you too.
If you want I can help you in the following 3 ways:
- Secure the Job: The step-by-step course that unveils systems, strategies and success when it comes to progressing your job and applying for new roles
- The Independent Consultant UK: A guide to becoming a contractor in the UK. This is a step-by-step walkthrough of my experiences, hosting exclusive information to help you transition into the space of contracting.
- Book a call: Let’s have a chat to focus on your life areas and where you can the biggest impact. If it makes sense, we can progress towards procuring coaching or mentoring.