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Contracting versus permanent: Employment management as a project manager

Andrew Wayland
March 5, 2014

Although contractors get paid more than permanently employed project managers, they don’t have the same job security. But how much freedom do they have to manage their employment?

Working as a contractor requires you to be a lot more organised than a permanent employee because you take on a lot more of the admin associated with employment.

For example, as a contractor you generally don’t get paid for public holidays, sick days or other leave days such as holidays. Further, some offices or companies might have forced closure periods over quiet times such a Christmas. So, as a contractor you need to plan and budget for this accordingly, as the result is that your income can fluctuate a lot. Some agencies might shape your pay for you, but this situation varies case-by-case.

As a contractor, you will also need to set up your own Australian business number (ABN), especially if you are contracting directly and bypassing an agency. Further, depending on the country you work in, your tax requirements might be increased. For example, if you are in Australia you might have to collect GST and submit quarterly Business Activity Statements (BAS). The best thing to do is find a good accountant and get the right advice up front so you know what you’re in for.

Finally, as a contractor the onus falls on your to negotiate your daily rate as there is usually more flexibility than for permanent positions. This means you should do your research, define what you think is fair (remembering to factor in superannuation, agency fees etc) and be prepared to negotiate.

Draw: Some people love control and for them contracting is the clear winner. But for those less comfortable with managing their own employment, permanent wins in this category.

The contracting versus permanent series looks at the various factors that may encourage a project manager into a permanent or contract role according to:

  1. Income
  2. Job security
  3. Employment management
  4. Career development
  5. Delivery pressure
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Andrew Wayland
Andrew Wayland runs Online Course Academy an Australian provider of online project management training. He has a decade of experience in projects and has worked in banking, utilities, government and logistics.
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