Archive for the ‘How to get paid more’ Category

To be an employee…or not to be

September 5, 2008
employee or contractor

employee or contractor

I was at a management meeting today. Death by Powerpoint. Managers managing more managers. Jargon bingo. But it made me think about the difference between employees and contractors, and why I have alternatively swung between the two approaches in my career.

Why be an employee?
– You are on a career path. The company invest in you and train you. You don’t have to be an expert to start with, as they will mould you into what they want. You are happy being part of a bigger organisation that has a structure, processes and a support network.

– You like the stability and security of being part of a company. You know how much you get paid every month, and you get paid for sick days and holiday. You have a contract that doesn’t have an end date.

– You like the kudos or prestige of working for X company. You have won that job and it makes you proud.

– You have more options being part of a company. If you want to try something new, you can ask your Manager and can move into a new position.

– You get benefits like pension/superannuation/car. You don’t have complicated taxation affairs. You don’t have to think about the money; it just arrives in your bank account.

Why be a contractor?

– You don’t want to be on a career path. You are a specialist in what you do. You don’t want to do performance appraisals, or be in management meetings. You like being independent.

– You want flexibility of lifestyle, geography and the freedom to move on when you want.

– You like having a variable wage. You can earn a lot more in less time, and then take 3 months off. You don’t need stability.

– You like managing your own money and taxes, or you hire someone to do it for you.

– If you want training, you pay for it yourself – or you do the same job over and over again (and risk being bored)

Both of these ways of working have their benefits and drawbacks. Both involve working for other people (working on your own business will be tackled in a different post).

I started out as an employee – then went contracting. Then back to an employee, then back to contracting. Repeat twice more, and I am currently in the contractor cycle…and heading towards working in my own business altogether. So there is room for all types….. which do you prefer?
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