Tired of the long hours and unpaid overtime, professionals are heading for the open plains of self-employment – in increasing numbers. We talked to construction’s guns-for-hire
Fewer hours for the same money, greater flexibility, and more variety in the places you work. If that sounds tempting, perhaps you should think about freelancing or switching to short-term contract work, because being one of construction’s hired guns offers all this and more.
The biggest advantage over permanent positions is the pay. A QS with three years post-qualification experience working on short-term contracts in London could be earning upwards of £20 an hour, which works out at £40,000 a year. This compares to about £30,000 for someone in a permanent position.
Steve King, a freelance assistant site manager in Brighton, confirms the advantages. “It’s unlikely a permanent job would be able to match what I get for freelance work,” he says.
King has been freelance since early 2002 and says he was attracted by the flexibility. “When I first went freelance, I was doing a university course so the flexibility was the main advantage. Where possible, I work contracts of six months or more, and one job I did for Jarvis lasted about a year. Plus, I get to move around – I’ve worked a couple of contracts in London as well as here in Brighton. It’s really the best of both worlds. You get better pay and you can pick and choose where you work.”
Paul Lees, a freelancer for two-and-a-half years who is currently working as a project manager for Devon council, adds another plus point. “Although you’re responsible to your client, you don’t get that “same thing every day” scenario. I get fed up with the drudgery of going into the same place, day after day.”
The higher earnings available under contract work mean temps can earn a good salary without putting in the inflexible hours that are commonplace for colleagues on staff contracts. Lees, who has recently become a father, says: “I start work at about seven, but I leave at four so I’m at home for my son’s bathtime.”
“I could get a reasonably salaried permanent job,” adds John Halpin, who’s been freelance since 1997 and is currently working as a QS for the north London borough of Camden.
“But it would mean working 50 or 60 hours a week, and here I do about a 40-hour week for a similar salary.”
Of course, what one person sees as flexibility, another may see as a lack of job security. This factor is often the main issue that puts people off freelancing. But King says he has never had trouble finding jobs (he is registered with agency Hays Montrose) and has no qualms about the temporary nature of his employment. “The way the industry is at the moment, there’s a huge amount of work around,” he says.
Halpin agrees. “There’s no continuity in the construction industry anyway,” he says. “If firms aren’t going bust they’re being taken over, so you have to think of number one.” In fact, he has been working for Camden for 18 months and is confident the contract will continue for the foreseeable future.
Another potential disadvantage to short-term contract work is that freelancers generally don’t enjoy the same benefits that permanent employees do: pension contributions, car costs and private healthcare will all have to come out of your own pocket. “Sometimes you do think about stability, and your pension, especially with a young family,” says Lees.
Training, too, can be hard to come by, as continuing professional development is usually funded by employers. However, many companies do train their freelance staff as it’s often in their interests to do so, and if you are thinking of studying part-time for a professional qualification such as an MBA, the flexibility of short contracts can be a real help. Equally, it can be the answer if you are thinking of taking time out from your career to travel, for instance.
These days contract workers aren’t as much on their own as many people assume. You are entitled to some sick pay, and the European Working Time Regulations recently introduced the right to four weeks’ paid annual leave.
The Lone Ranger lifestyle isn’t for everyone, but John Halpin certainly recommends it. He originally went freelance for the flexibility it offered, allowing him to study. Also, he says, “I wanted to see if I could make it by myself”. Seven years later, he’s not looking back: “I’m hooked on being freelance and it‘s unlikely I‘d go back to a permanent job.”
Agency work or limited company?
There are two ways to be a temp: you can either sign on with an agency or go it alone as a sole trader, a limited liability partnership or other company structure. Both methods have advantages and disadvantages.
The advantage of using an agency is that you don't have to search for work yourself. Not only will an agency call you if a company is looking to fill a suitable role, it will also scour job ads and approach companies on your behalf. It will also negotiate your salary – it's in their interest to secure you as much money as possible because their fee is usually based on what you earn. And, because you are paid by the agency rather than the client, you get paid regularly, with tax and National Insurance already deducted under PAYE.
Self-employed contract workers, on the other hand, will have to find work for themselves and negotiate their own salary and conditions. This can be difficult, as many companies will approach agencies for contract workers before publicising the vacancy. Also, you will have to submit invoices and chase them, which can be time-consuming and frustrating.
The major advantage to self-employment, however, is that you will earn more per hour than someone who works through an agency. This is partly because you are paid a rate that includes tax and National Insurance, which means you must sort out your own tax return (or pay an accountant to do it for you). However, this has the advantages that you pay tax yearly rather than monthly or weekly, and can keep the extra money earning interest in a bank account until the time comes to hand it over. Setting up a limited company can offer further financial advantages. It's also worth noting that many agencies will also find work for people who are self-employed.
John Halpin was self-employed and found his own contracts until 18 months ago, as he didn't feel signing up with an agency would offer him sufficient advantages. He then registered with recruitment consultant Eden Brown after becoming frustrated by clients who didn't pay him on time. "When I had my own clients, payment was irregular – sometimes you had to wait months and months for your money, even though the law says they should pay you straight away. But with an agency, you get money every week.
"I didn't like agencies before, but now I'm hooked. They look after you, and can be, in my experience, helpful and compassionate [over a personal matter]. It's not out of the question that I'd go back to being self-employed – I'm still a limited company – but it's unlikely because even when I worked for big companies I sometimes waited three months for my money."