Becoming a contract test consultant – part 1

Due to some changes in my personal circumstances, I have recently decided to move into contracting from being a permanent employee. My experience with working as a contractor is literally next to zero, this has certainly become a very significant transition stage in my professional career, and will undoubtedly influence my career choice in the next 5 to 10 years of my life.

To mark such an occasion, I decided to dedicate some pages in my blog to help me as a reference when I need to access how successful this move actually was after some time, and hopefully, to provide some help and guidance to anyone out there who is in the similar situation as me and thinking about doing the similar thing.

As much as I like to write stuff, it is just way to long to put in a single article. I will divid into a series of short blogs, and post them here. Ok so here we go.

Just like everything else, whenever there is a need to change something, the first question is always related to – Why. Usually, when we make a career move, it’s because there is something we can’t get from our current position. Becoming a contractor is no different, you will need to ask yourself why, why do you want to become a contractor, I’d suggest you make a list of the things you want to achieve by working as a contractor, then find some contractor friends and ask them if your goals are realistic and achievable.

I have asked a lot contract test consultants, different people will have different opinions of course, but usually they are all related to and can be summarized as:

• Significantly higher pay.
• More work flexibility.
• More work variety.
• Less BS and political fights, if you like to concentrate on doing actual work.

Of course, the other side of coin:

• No job security guarantee.
• No benefits, such as industry certifications, training, seminar, etc.
• Much more other responsibilities that you will have to take care of, doing your own tax for example.
• No paid leave.
• Personal career development can be difficult to achieve.

Without too much detail, I will briefly going to some of the points above.

More pay. If you are in a short-term rolling contracts, in most cases, you will be paid by the hour. For a typical test analyst with around 5 years, the market usually pays between $45 and $60. Please be aware that the numbers are only for reference purpose, do not quote me on this. In a bad economy where market is too volatile, the rate will generally be lower. Depending on the actual company, project type, and market demand, the actual rates will vary. But one thing is for sure, a contractor will definitely be paid more than a permanent staff, usually it’s about twice as much. I did a simple calculation, if you are lucky get paid $65/hour, it is equivalent of $113,880 per year. I also took into account of 20 days of annual leave, 10 days sick leave, 11 days public holiday, and assuming you work 8 hours per day, 5 days a week. While this figure include personal income tax, but even after deduction, you still end up with lots money, not to mention you can have your business expense deducted and other many tax benefits too.

No job security. Generally, job security is mostly impacted by the big economic environment. This is especially true for New Zealand, as it is very dependent on export and import industry, any abnormal change in global economy will quickly impact the country. There were a lot contracts out of their jobs during the 2008 recession, but equally speaking, I have also seen many permanent staff been force to resign or made redundant as their roles were dis-established. I guess my point is when the global economy is turning into shit, everyone will be affected, regardless your job status. But I have to point out generally, contractors are the fist bunch to go as employer are still morally obliged to protect their staff, and if things don’t get back on track quickly, permanent staff will get similar treatment.

No paid training, seminar, etc. This is one of the most perks entitled to a permanent staff, being part of an organization, you will usually receive opportunities to go to seminars, conferences, and trainings, better yet, all of these will be paid for by the company. Often, these benefits are known as personal training and development. What one should know is that a company is not obliged to provide these, so say if your company is going through some finical hardship, your manager will have every right to turn down your training application and cancel that ones that already planned. Sometimes in less extreme situations, you can still have your training requests denied, because it doesn’t align well with the company’s long term strategy. So my point is, the paid trainings etc are not part of the company’s contractual responsibility, you as an employee won’t get it if the company you work for doesn’t want give it to you. Here is my way of solving it, by working as a contractor, you get more money, and if you want to get certified or attend a conference, just save the money and pay for it yourself, that way, you always get it and won’t have to be dependent on other things and you will always stay in sync with the new technology development of the industry.

If this is the 1st time you are into this uncharted water, I’d strongly recommended talking to your contracting friends, ask them about the pros and cons. The key here is about making a informed decision and not rush things through. Remember you are the one that is going to make the final decision, and accepting all the good and bad that follows. So please think it through, if still not sure after contemplating and scrutiny, park it and come back to it after some time.