Why you should consider becoming a Software Engineering contractor
I will be discussing why you should consider becoming a Software Engineering contractor.
I will be speaking from the perspective of a Software engineer, but my points should also apply for others in tech such as DevOps Engineers, Data Scientists, Machine Learning Engineers, IT engineers and others.
I am based in the UK so these talking points will mostly relate to how contracting, tax and employment law works in the UK. I have no qualifications relating to tax, accounting or law, and the rules surrounding these do change over time, so please verify the rules at the time you watch this video with a certified professional.
I will begin with the question everyone wants to know about. Money. Will you earn more as a contractor than as a full time employee? In short, probably.
If you work at FAANG, a hedge fund, HFT firm or highly senior at a financial institution you may earn more but as a general rule contractors will earn more than full time tech employees. According to IT jobs watch the average contractor rate for Software Engineers was £525 per day. From my experience earning £600 per day as a contractor is not uncommon, and in some cases it can exceed even £700 per day. Tax will have to be applied to these earnings before they can be withdrawn from the company, but still overall it’s a good deal. If you have a very specialised skill such as Electronic trading experience or working as an interim CTO you could earn even more.
You may be thinking, “wait, if I can make more at FAANG, hedge fund etc, why would I become a contractor?”. I will be addressing these.
Getting into a FAANG company, or hedge fund is difficult. People study interview prep materials for months or even years to get into these companies. Breaking into a contractor role is easier, I would say even easier than landing a role at other tech companies.
Typically when hiring a contractor the end client needs additional staffing as soon as possible. It is common to start work within one week of signing the contract. Many end clients will actually set a time limit on a contractor’s joining time, for example when I worked as a permanent employee and was asked to interview for a contractor role I was not considered as I had a one month notice period. And they could wait a maximum of 2 weeks for a candidate to start.
Due to these time constraints they do not usually have a long interview process. From my experience firms that have 5 hour interview processes for full time employees would have closer to 2 hours process for contractors. As Contractors have no job security and can have their contract terminated at any time for any reason the hiring managers are not as stringent when hiring candidates as the risk of hiring a suboptimal candidate is fairly low. Not only are these interview processes known for being short, but also for being fairly easy, I have not heard of any that have the algorithm based questions the FAANG interviews are known for.
