Why contracting is a flexible, stable and lucrative option for those in the IT, digital and business transformation market 

If you’ve ever thought about contracting (or even if you haven’t), this could be your signal to jump in the game. 

Tech and digital projects are humming, meaning day rates are generous and job stability is the best we’ve seen in years.

And yet, contracting can still get a bad rap. Unfair, we say. 

That’s why we’ve put together this blog. It covers the pros (spoiler: they’re good) and how it all works. Plus, we debunk some myths to help you get up and running with peace of mind.

Let’s start with the benefits. 

The top 3 benefits of contracting

It’s super flexible

As a permanent employee, you might be restricted to a finite number of holidays and days off. 

Enter contracting. Contractors only charge for time worked – meaning it’s generally easier to take time away or work the hours that suit you. 

Flexibility is attractive.  So attractive fact that our recent Candidate Motivators survey turned up this gem: 58% of contractors picked flexible work as one of their top drivers when considering a role. 

Experience working at a range of organisations and projects

Same projects, same industry, same team. Vanilla works for some people, but for others…not so much... 

Some of us humans like to work in different places, with different people, in a different scene. 

So, if you’re someone who likes to mix it up, meet new people, and learn new skills, contracting could be for you. 

The money is good

Expensive hobbies? Lots of mouths to feed? Generally speaking (and especially now), contracting roles pay more. 

That’s partly because contractors cover some of the benefits permanent employees get (like holidays, super, and sick leave). But even so, the odds will probably be in your favour. 

When you look at your day rate (and potential pay day!), you may well be tempted to get on the contracting train. More on that later. 

Why contracting is a stable choice (more so than you might think) 

Like we said, being a contractor isn’t without its risks. And look, Mum and Dad probably don’t love the idea of you contracting. 

But, right now, it’s way more secure than you (or your concerned parents) might believe. 

High market demand = job stability + high rates 

It’s a candidate’s market out there: Plenty of jobs and not enough people to do them.

So, if your nightmare is being the last kid picked for the team, fear not! 

How’s this for odds? 1 in 3 of our contractors get a new role as soon as they finish up a job, while another 1 in 3 have their contracts extended. 

It’s a hot market, for sure. It’s also about your recruiter keeping on top of things to ensure you’re not ‘on the bench’ for too long (if at all). 

That’s why we make it our business to keep the wheels in motion. That might mean renegotiating your current contract or looking at other opportunities.

Either way, you come out ahead. 

Mum and Dad still not sold? Lawrence McKenzie took us through the Talenza process step-by-step. 

“6 weeks before your contract is due to end, you’ll be flagged in our system. Our clients generally are reminded 4 weeks prior.” 

“It’s in our interests to keep you contracting. So, if our client gives us any indication that you won’t be extended, we’ll start to look externally across our client portfolios.  You won’t be out of a job for long!”  

What about job security? 

With flexibility comes instability, right? Not necessarily. 

You might be surprised to learn that permanent roles can end just as quickly as contract ones. 

As a Management Consultant, Lawrence McKenzie knows both sides of the job security story:

‘In Queensland, for example, most permanent jobs will have a probation period of 3-6 months. In other words, until you’ve reached the end of your probation, your employer is within their rights to let you go immediately or at a week’s notice (depending on your contract). 

“But on the contracting side, you’ll have a defined notice period (mutually agreed to before you sign on the dotted line). 

“So if you’ve agreed to a 2-week notice period and the project is put on hold or cancelled? You’ll be paid for 2 weeks, regardless - giving you precious time to find your next gig.” 

OPEX and CAPEX: The boring bits that are important to know 

We get it. There’s nothing sexy about an acronym. But stick with us here, because it’s important you know how these two terms can affect planned projects.

Capital expenditures (CAPEX) 

CAPEX is the spending an organisation does for long-term benefits. There is usually a large upfront cost – and contractors are often called in to scale up a workforce. 

Quick tip: Keep an eye on the CAPEX. If an organisation is reducing CAPEX spend, planned projects will probably slow down – or stop altogether. And that’s a risk for any contractor. 

Operating expenditure (OPEX) 

OPEX means the ongoing cost for running a product, IT system or business. It is generally incurred annually or monthly. Think more BAU. 

Money talks. How much could you be earning?

You scrolled straight to this section, didn’t you?  No judgement here. Everyone wants to know what their paycheck might look like. 

For a sneak peek, check out our Salary Survey Guide.

It’s an up-to-date example of what you could be taking home – depending on factors like your industry, experience, organisation, project, and location. 

Before we get into the math, here are 2 ways you can contract: 

PAYG 

This means super and tax are calculated on your behalf – then you’ll get the remainder. 

Using your ABN

This way you get paid the full day rate - but are responsible for super contributions, tax payments and insurance. 

What does this look like?

Let’s take a look at a hypothetical break down to make sure your dog stays fed, and your body remains caffeinated. 

Consider a daily rate of $850, with a 3% administration fee and 10.5% superannuation. 

Here we have: 

• Daily rate: $850 
• Superannuation: $78.35 
• Admin fee: $35.50 
• Daily winnings: $746.15

For those playing along at home, how does that stack up against your salary today? Can we get a cha-ching?

Curious about contracting? 

Start your job journey by downloading our Salary Guide. Armed with recent research on day rates and costings, you can compare your salary and know your worth in today’s market. 

Contracting isn’t for everyone - but it could well be for you.

Got more questions? We’ve got answers.

Read on for our FAQ. 

Do you need an ABN to be a contractor? 

As mentioned above – no, you don’t!.

For more information, check out this link.

Can you get a mortgage if you’re a contractor? 

Yes, you can get a loan if you are a contractor. 

Typically, contracting rates are higher than permanent employees. And, in our current market, money talks: depending on your financial situation, your income could be more than it has ever been before. Read more about mortgages here. 

Do you need a lot of experience to become a contractor? 

As a general rule of thumb, we recommend having at least 2+ years experience before signing up to a contract role. 

Sure, there’s nothing stopping you from doing it before, but the reality is this: you’re only as good as your last project. If you over promise and under deliver on your first few contracts, work will dry up pretty quickly.