When to start and stop contracting
I often encounter seasoned contractors with extensive experiences frustrated by the competition they face with newer contractors offering lower rates. Conversely, some individuals jump into contracting prematurely, lacking the skills and training that come with early career development in permanent roles.
When is the right time to start contracting?
In my opinion, it’s when you’ve developed a robust skill set that makes you a specialist, capable of quickly adapting to any environment. This typically requires at least 5+ years of focused experience.
When should you consider transitioning out of contracting?
When you start to get tired and sick of the constant cycles of interviews for new roles, moving from project to project, and always searching for the next opportunity. It’s also a good time if you aspire to senior management positions, which are usually reserved for loyal, full-time employees rather than contractors. Some contractors later regret not transitioning to permanent roles earlier, as they observe their former colleagues advancing into management positions.
After a decade of contracting, transitioning to a permanent role can be challenging, not by choice but because employers often prefer candidates with steady career histories in permanent positions, believing they’re less likely to leave for higher rates elsewhere.
While some career contractors are content with remaining in the contracting market for the rest of their working lives, a common strategy that works well is to:
-Build your expertise in your 20s
-Contract through your 30s to maximise earnings, particularly as life becomes busier with marriage, travel, mortgages, and starting a family
-Shift back to a permanent role in your 40s, when job security and career development become more important
-Aim for a senior management position by your 50s
-After that, start planning for retirement
This approach balances learning, earning, and long-term career growth, setting you up for a successful and fulfilling professional journey.