Research and forecasts show that in 10 – 15 years, more than half of the jobs will be done by contingent workers. In deciding to be a contractor or an employee, there are employment considerations to think about. The first advice is to follow the money as there is a value assigned to the services you are providing or intend to provide. As an employee, you may get equity options, salary paid per hour and bonuses. Independent contractors can be third party contractors and are paid salary, have an hourly rate, and “salary plus” (consulting fees that are attached to the billable amount).
To clinch a contractor role, timing is very important as organizations are looking to hire a contractor at the best rate, is available for the job and possess the right skillset. Companies are beginning to prefer that independent contractors are employees of a staffing firm. >>Read More
According to Phil Almeroth, Consulting Practice Leader for LogiSolve, other things to consider are taxes, benefits and intellectual property. In terms of taxes, there is a difference between being a contractor and being an employee. As an employee, there are limitations to what you can claim as business expenses but as an independent contractor, the net is wider. In terms of benefit, as an independent contractor, you cannot claim 401k. As a W2 contract employee, the growing trend is that companies pay for your health benefits but not that of family members.
In terms of intellectual property, as an employee, everything you create is owned by the company. Companies are beginning to track their intellectual property and so the best advice is to read the terms and conditions and negotiate before signing the contract. On the other hand, if you are a contractor through a staffing firm, it may interest you to know that the staffing firm does not own the Intellectual Property and they do not keep it. Again, the advice is that you read the fine prints; do not sign a contract that you are not sure of.
Finally, to decide on whether to be a contractor or a consultant, it is important to consider the type of skills that you are bringing to the table. A skill or a certification that is scare in the marketplace can put you in the consultant space. The beginning of every career journey should begin from your network; own your career, own your network. Document what you are doing especially the decision process and planning process. Keep track of what you do and remember that background checks begin with Social Media.
Phil Almeroth made this presentation at the Career Networking Group (CNG) seminar of PMI-MN on October 16, 2017. Phil is the Consulting Practice Leader of LogiSolve, a Management & Technology Consulting firm based in St. Paul.
