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An IT Consultant’s Case for Contracting

  • Publish Date: Posted almost 7 years ago
  • Author: Randy Reno

An IT Consultant’s Case for Contracting

I recently read a comment about how contracting isn’t worth it due to lack of benefits, job security and potential gaps that can be on your resume. As a longtime IT contractor, I would have to disagree. In fact, it seems the rest of the U.S. is jumping on the contracting train, too. A recent report from SIA reveals that contingent workers represented 29 percent of all U.S. workers last year. Here’s my take.

Let’s talk benefits.

"In business as in life, you don't get what you deserve. You get what you negotiate." - Chester L. Karrass

With respect to contracting compensation, pay and benefits are not mutually exclusive. Pay and benefits traditionally are a function of negotiation. Pay and benefits are mutually exclusive in a Federal 1099 or W-9 context because that is an arrangement between corporations, effectively. Size does not matter in either party. You can be an army of one, if you so choose.

The 1099/W-9 mechanism is just one means of contracting. It is not the end-all-be-all of the consulting track. The more savvy agencies, like MATRIX, recognize this and can offer a W-2 contract arrangement in most engagements. Through MATRIX, W-2 contractors really can have the best of both worlds: excellent pay rates, group health coverage, 401(k) retirement planning, and more.

Contrary to what the Beatles would have you believe, the best things in life are not free. Everything costs money. This is where the art of negotiation is key in any employment arrangement, whether contract or permanent. One thing I always look at when negotiating a contract is the benefits package available to contractors. Healthcare insurance is expensive above and beyond the actual cost of the actual care one receives, no matter who is paying the bill. With the advent of the Affordable Care Act, the days of employer-subsidized benefits is quickly going the way of the dodo bird, the horse and buggy, and, oh yeah, Yahoo! Many companies refer their permanent employees to the public healthcare exchanges because the laws make providing insurance benefits cost-prohibitive. Just last month, a healthcare exchange co-op collapsed, and several had collapsed previously. Sooner or later, everyone pays.

There are no guarantees.

"Make friends with change because it's the only thing you can count on." - Cantonese Proverb

With respect to permanent employment being comfortable, every situation, regardless of how good or how bad, is only temporary. Nothing is sacrosanct or risk-free about a permanent gig. Permanent does not mean forever. I have contracted through MATRIX off and on since 2000, with some permanent jobs here and there as time off for good behavior. How did permanent turn out? Let's roll the tape:

  • Two jobs eliminated by merger/acquisition and restructuring

  • Two jobs disappeared due to corporate bankruptcies

  • One job vanished due to management's decision to change platforms wholesale

Contracting is very cool, especially when it saves your bacon. There is no categorical panacea to the whims of the business world. It can provide a tangible bridge while one seeks their next permanent home.

Embrace change.

"The times, they are a-changin'" - Bob Dylan

As for times being sunshine or very dark skies, all I can say is that versatility and adaptability are keys to building a career in IT consulting. I have had many contracts in my career. I think with my next one, I win a set of Ginsu steak knives or something. I can't be sure.

Contracting has intangible benefits that are often missing in permanent gigs, namely, variety. I have had the good fortune to work in a wide spectrum of industries, each with common business problems. I have grown my skill set through technology diversification and learning about business the old-fashioned way. Those traits enable me to bring value to my clients.

Sure, I have had gaps, too. Weathering them financially requires personal financial discipline, which may be the most difficult life skill anyone can master. Escaping the valleys can sometimes mean stretching oneself beyond one's comfort zone through learning a new technology or business skill. Yes, it's cliché, but also very true: education never stops. It is the most essential survival skill one can have. From learning comes the ability to adapt and grow. And that yields something that is truly permanent.

If you're wondering whether a contract or permanent job works better for you, download our eBook, "Contract vs. Permanent Employment: A decision guide for tech pros" to weigh the pros and cons.