Contracting can mean a lot of different things to a lot of different people. With that being said, there are a few main types to consider, such as W2 - working through a staffing company OR 1099 - employing yourself independently.
For the purposes of this post, we are going to discuss at length what it means to be a W2 contractor, as that’s the space I typically recruit in.
As a W2 contractor, you are (as shown in the title) a W2 employee of whatever staffing company is employing you. That means you are taxed normally, similar to how you’d pay taxes if you were a permanent employee of a company.
Length
These contracts could last for 2 days, 2 months, 2 years, or literally forever. Either way, the staffing company employing you has an agreement (contract) to employ you.
There are few main things that can determine the duration, but whatever is driving the need for a contractor is often what determines length. If it’s an addition to the team that will be needed for a long time, the contract will likely go longer. If it’s a specific project they need someone for and that’s all, it will likely be shorter term. Either way, a recruiter should know the length of contract.
Extensions & Permanent Hire
This brings me to my next point: extensions. An extension is when the client you’re working for determines they’d like to extend the contractual period past what was previously agreed upon. In essence, they like the work you’re doing and want to keep you around longer. This could be tied to an additional budget being approved, an increase in workload, etc. Either way, this means that they are keeping you on contract longer than anticipated. You do have the ability to decline the extension, by the way.
Permanent hire is when the company hires you on as a direct employee of their organization rather than keeping you as a contract employee. Sometimes this is the intention (ie: a contract to hire) or just something that worked out as a direct result of your hard work! Some clients won’t term it a contract to hire but will intend to hire you on if it’s a good fit, while others will explicitly call it a contract to hire. A C2H is not a guarantee that you get hired permanently, but it’s a very strong possibility pending it’s a good fit all around.
Benefits
Talk about something else that means a lot of things to a lot of people. To me - benefits means paid time off, holiday pay, health insurance, and a 401k.
In all scenarios, just ask your recruiter what these benefits look like. Some offer health insurance, while others do not. Some offer paid holidays and paid time off while again, others don’t.
From my experience, health insurance for contractors does tend to be more expensive in terms of premiums. Again, your staffing company should be able to reiterate what this looks like while providing a comprehensive benefits guide.
Positives
Not being tied down in one specific role at one specific company for an indeterminate time
Can be compensated more as a contractor depending on skillset
Gaining good resume building experience OR getting exposure to a company you might not have had access to before
Downsides
Benefits can run more expensive or not exist altogether
Can be less stable, ie. short term contracts especially
Uncertainty of finding a new role after your current contract ends (thankfully TEKsystems leans into this and keeps close contact with consultants close to their end dates!)
At the end of the day, contracting can be a great avenue for employment as long as it fits your life and your career. Armed with this new information, hopefully contract roles are something you will more readily consider!
What questions do you have about contracting?
This article is my own and does not necessarily represent the views or opinions of TEKsystems.
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