As the tech talent shortage continues, Contracting Plus’s Jimmy Sheehan shares his top advice for in-demand IT contractors.
Demand for experienced IT contractors is on the rise as the job market continues to heat up and a growing number of employers report critical skills shortages.
With the latest CSO Labour Force Survey showing a 9.8pc rise in employment in the year to the end of September, demand for business-critical roles is mounting.
In particularly high demand right now are tech contractors with the most sought-after skills in areas like cybersecurity, data science and analytics, DevOps engineering and cloud architecture.
All of these skills are needed by employers in Ireland and elsewhere – and they’re needed right now. A staggering 91pc of Irish employers experienced recruitment challenges last year, according to a survey released in December by Hays.
The most recent figures we have at Contracting Plus show a 6pc year-on-year rise in the number of tech contractors signing up to our services. This isn’t at all surprising, because these highly skilled professionals can bring immediate value and they are generally at the top of their game.
They are often mid-way or more through their career and they have built up a bank of knowledge, expertise and experience that is highly attractive to companies. Because of this, these contractors typically command high rates of pay.
Last year, Contracting Plus partnered with Trinity Business School to publish Ireland’s Project Economy, a report in the Irish market to focus solely on high-skilled independent professional contractors.
We found that tech contractors earned an average daily rate of €529, their median age is 48 and their contracts last, on average, 14 months. More than a third (37pc) have a master’s degree and they are very confident about their future.
Even back in May 2021, before the job market began its recovery, 87pc told us their experience was in demand and 55pc agreed that it would be easy for them to find another contract. 71pc said they expected the contracting sector to grow in the next three to five years.
This all bodes well for tech professionals with in-demand skills who might be considering a career in contracting in 2022.
It is really important, however, to make sure you lay the groundwork before you make the jump.
Be clear on your objectives
One of the biggest benefits of contracting for tech professionals is the potential to build up a specific skillset more quickly than you might be able to do in full-time work.
You can work across different companies and with a greater range of senior professionals and experts, gaining experience and insight more quickly than you would waiting on an in-house promotion at the discretion of a boss or manager.
This kind of autonomy can be really appealing but, without the structure of a permanent role, it’s important to think carefully about your objectives and set out a roadmap for yourself so you stay on track.
Are you contracting because you want to ‘supercharge’ your skillset? Do you need to save a lump sum quickly – to travel, for example, or for the down payment on a mortgage?
How long do you want to do this for? Where do you see yourself in five years? If you’re in it for the long haul, what kind of financial planning should you be looking at?
Having a clear plan from the outset will help you better navigate this new way of working, increasing your chances of success for however long your contracting career lasts.
Lean on your network
I’m talking here about people in your working life who know you and what you can do. Don’t be afraid to reach out to tell them you will be available and what kind of contract roles and projects you’re interested in.
We surveyed 1,458 respondents for Ireland’s Project Economy, and 38pc said they relied on their own initiative to find new work. 21pc rely on third parties such as a recruitment agency and most others use a combination of both.
This really shows the importance of networking for independent professionals. Those who are moving in their industry circle and connecting to peers and contract recruitment companies will find it easier to move on to new roles.
I would also really advise making the effort to build your own trusted peer network – other IT contractors with the same or related skillsets you can call on to help out if you’re facing a particular challenge or need to step away from a project for a time for any reason.
This will help to ensure you don’t let your clients down, helping you to build a solid reputation over time.
In the same vein, make sure you factor in unknowns when you are agreeing the terms of a contract with any new client. The better prepared both parties are for all eventualities, the less likely you are to face project overruns or cost disputes.
Plan ahead and keep on top of admin
While equivalent salaries are generally higher in contracting, you won’t be entitled to holiday or sick pay contributions and some social welfare payments won’t apply.
It’s important to factor all of this into your work schedule and budgetary planning, so you can forecast your earnings as accurately as possible and be prepared for whatever happens.
Look into public liability, employer liability and professional indemnity insurances as early as possible. Income protection in particular could provide that all-important safety net should you find yourself unable to work for any reason.
No matter how busy you are, take time to keep the right records, so you can claim for the business-related expenses you are entitled to.
Instead of operating as a sole trader, consider instead operating under an umbrella company or setting up your own limited company. This will give you much better legal protections, and multiple clients and different sources of income can be more easily managed under an umbrella or limited company structure.
A good accountant or specialist service provider will be able to manage income and payroll, if applicable, for you as well as the payment of VAT and tax liabilities.
This will also help you to optimise your income and create wealth further down the line through the right pension planning.
Jimmy Sheehan is managing director of Contracting Plus, a specialist service provider for professional contractors offering company set-up, accounts administration, invoicing, payroll, tax and pensions advisory services.
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