If you’ve been searching for a job in this economy, you know the harsh realities: hiring is expensive for an employer.
Ramping up a new employee requires a significant investment of both time and money, and the added expense of benefits, taxes (unemployment, social security, workers comp, etc.), and even just the office equipment (laptop, phone) to keep the employee productive is a constant strain on a business which may already be struggling to stay afloat.
And then there’s always the risk that after investing in a new hire, she or he will jump ship once a better opportunity arises.
But even in a tight economy, every business needs resources to get the job done. After all, people are almost always any organization’s most valuable asset. So what’s a company who’s hesitant to hire to do? This is where consulting comes in.
Hiring a consultant as an independent contractor is the ultimate stopgap solution for many organizations in today’s competitive market. Yes, consulting isn’t cheap, but it gives companies the freedom to bring in expertise on an as-needed basis without obligating them to the burden of long-term overhead. So as a job-seeker, what does this mean for you?
It’s a likely scenario that you may one day find yourself faced with a decision: do I want to wait to find work as a full-time employee or should I pursue this consulting package I am being offered? As with anything, there are pros and cons to working as a contractor. Let’s examine a few of them:
Pro: Higher Upside. Since companies aren’t paying for your overhead, as a consultant you can charge a much steeper per-hour rate than an employee could expect. As a result, your gross income may well be greater as a consultant than as an employee.
Con: Higher Costs. But as your own employer, you’re also responsible for your own operating expenses, your own medical insurance, and your own Social Security and Medicare taxes. And since your income is higher, you may even find yourself in a higher personal tax bracket.
Pro: Flexibility. So depending on how the numbers work out, the financial side of things may end up being a wash. But one thing you can’t put a value on are the intangibles of working for yourself – you get the flexibility to set your schedule, choose your projects, and can even continue looking for full-time work, if you desire.
Con: Lack of Security. The downside of all this freedom is that you have no security net. If you take a vacation or sick day, you’re not getting paid – it’s as simple as that. And if your current project ends unexpectedly, there are no termination benefits to tide you over until you find more work.
Given the tradeoffs, choosing whether or not to pursue work as an independent contractor can certainly be a difficult decision. But keep in mind that becoming a consultant does not have to be a permanent resolution. In fact, for many job-seekers consulting work is a great way to get a foot in the door. It’s reasonable for a company to offer a full-time position to a trusted contractor who has proven themselves as a consultant, and in today’s market, this kind of hiring path is only becoming more common.
In the end, working as a consultant gives both you and the company an opportunity to try each other out. If you’re looking for work in a harsh market, consulting may just be the right solution for filling the gaps and keeping your career on track. Good luck!
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