CORADIX Technology Consulting

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Contractor Versus Employee

CORADIX hires both full-time employees and sub-contractors. If you fit into the over-achiever category in one of our Core Competency areas, we want you to join our team in the capacity that you are most comfortable.

What are the issues to consider if you are an employee looking to become a sub-contractor, and what are the advantages? If you are successful and run a good business, you reap the rewards of higher income and more control over your destiny. Conversely, if you don’t follow good business practices, or incur unfortunate circumstances, you may be very disappointed with the results.

Issues and Opportunities:

Some issues and opportunities that you need to consider before becoming a sub-contractor include:

Higher cash flow (usually) while you are actually on contract, but sometimes very difficult to do financial planning.

Harder to obtain credit for mortgage or car loans. Make sure you have a line of credit in place before you switch.

Tax shelters as a small business but more accounting and legal costs.

More freedom to accept or refuse a project, if you can afford to pass it by. Make sure that you have a safety net.

You have to like moving around, meeting new people, and adjusting to a new environment.

Even a long-term contract can end on short notice. For example, when a new government is elected, they will re-prioritize spending and cut programs to fulfill their mandate, the result being that contracts can be terminated with short notice.

You are responsible for your own marketing. Even while on contract, you must take the initiative to position yourself for the next contract

Definition of a Good Sub-Contractor:

Successful sub-contractors will earn higher than average income while working in excess of 220 days per year. They will continually re-invest in their skills by financing their own training, complemented by self-training in the latest tools and techniques to increase the demand for their services. They will maintain very high work ethics and standards, and always meet or exceed their clients’ expectations. They will maintain very strong business relationships through their ability to develop rapport with both easy going and difficult clients by practicing tolerance when impatience could easily prevail. They will not diminish their level of interest at the end of a project, while worrying about their next contract, because they know that their most recent references are vital for future work.

Launching a career in sub-contracting can be much less stressful if you have a 3 – 6 month financial cushion that will cover your operating costs if a dry spell should occur. Astute consultants always have that cushion in the bank, and manage to demonstrate more confidence in their overall behaviour on the job. Depending on your ability to cope with uncertainty, you need to adjust this cushion accordingly.

We have touched lightly on a few topics in order to provoke some serious thinking. We are always available to personally discuss this matter in more detail.