There are numerous benefits to operating as an umbrella or limited company contractor. Increased flexibility and the chance to earn higher pay rates are just some of the benefits that have seen many individuals making the move from permanent to temporary work.
However, it’s always important to be aware of the common mistakes that can be made during a contractor’s professional career, so here are our top tips on avoiding such mistakes…
1. Inability to negotiate
It is crucial for a contractor to be able to negotiate effectively. This skill alone can have a noticeable impact on your pay rates. One way to do this is to ensure that you are always up to date on the average industry pay rates of contractors with a similar skill set to your own. This way you can use this as a starting point to dictate your own rates. Always try and ask for higher but expect to meet in the middle.
2. Not being financially responsible
The prospect of attractive pay rates has always incited individuals to work on a contract basis however, contracts are only ever temporary meaning those big pay rates are not guaranteed on a regular basis. There may be times where you will have gaps in-between contracts and therefore will have to depend on funds you should have saved during the times you were working. Therefore, it is crucial to save a portion of your earnings every month so you have that rainy day fund to rely on.
3. Not tailoring your CV
It is a common mistake for contractors to send out the same CV to all contract opportunities that they have an interest in. However, doing this will not help you stand out from the crowd. It is important to customise your CV for each individual contract ensuring you match the skills you possess to the skills most desired for that specific contract.
4. Being too picky
Some contractors will only apply for one or two vacancies in the hopes that this will be enough to land them their next contract. However, if you want to avoid gaps in-between contracts it’s important to play the numbers game, especially if you operate within a competitive industry. The more positions applied for, the more opportunities you will have.
5. Not being prepared for an interview
It’s surprising how many people will show up to an interview knowing little or nothing about the company or role they are applying for. Make sure you do your research before any interview:
Look into the company’s history and goals. How can your skills be used to benefit these?
Understand what the client wants from your role. Highlight how your personal and professional attributes and skills match these needs.
Always have answers in place for standardised interview questions, using the ‘STAR’ method can be useful as it gives you an effective structure to follow when answering these questions.
Situation – Discuss a previous circumstance you have been in.
Task – The task at the time.
Action – How your skills resolved the task.
Result – The result you achieved.
6. Inability to network
Now this doesn’t mean you have to be the ultimate ‘people person’ but maintaining relationships with old colleagues and clients and being able to network with others can make a world of difference when having the responsibility to seek your own work. Social media has played an increasingly important role, with professional networking sites such as LinkedIn at the forefront of this. Create a list of professionals that are key within your industry and try to establish relationships with them.
7. Lack of industry knowledge
Having a limited understanding of the latest trends and techniques within a particular sector can reflect badly on your professional image. Clients want to know you are reliable and knowledgeable so being up to date on all of the latest industry trends and techniques could make you a more desirable option for a potential client.
8. Not maintaining your skills set
In some industries competition between contractors can be strong and your skill set is the key factor that helps you stand out from the crowd. Therefore, it is important to regularly update your skill set in line with industry developments. Online courses, training sessions and industry events are great ways of doing this.
As an umbrella or limited company contractor, simply being aware of the common mistakes mentioned above could be the difference between long gaps in-between contracts, higher pay rates and your overall desirability as a contractor.
This article was provided by PayStream