Is Contracting Right for Me?
Working as an independent contractor can be great. And it can be tough. Yes, there is a sense of freedom in running your own small business and jumping out of organisational hierarchy, but it can also be unpredictable and isolating at times, especially when our choice of work as clinicians often means that we value connection, collaboration and information exchange.
I found it tricky navigating the world of independent contracting at first. I didn’t know what to look out for in a contract, wasn’t sure if I should take one organisation’s offer of either an independent contract or short employment agreement, didn’t realise I may have been entitled to other benefits and hadn’t fully considered why I went into independent contracting in the first place. Since then, I have managed independent contractors in an organisation, liaised with agencies providing employee assistance contractors for a large government agency and supervised independent contractors in my private practice, pwerson2person Consulting.
The following information is based on the collective experiences of many independent contractors as well as conversations with HR professionals. Remember, the industry changes regularly, so it’s always a good idea to consult with relevant professionals such as an accountant, lawyer, financial advisor, human resources consultant, or employment agency before making any major decisions.
Pros and Cons of Independent Contracting
For Clients
Firstly, contracting benefits clients. Contracting allows clients to choose a clinician that best suits their needs, by gender, specialisation and location when multiple contractors are engaged by an organisation. Some organisations are based in city locations and contracting increases reach to rural or outer suburban areas. Having access to a range of contractors also means that clients may be able to access specialists that they may not have otherwise been able to work with locally. A downside may be that clients may feel disconnected from the rest of the organisation, especially if the organisation is a specialist service for their community.
For Organisations
It is useful to remember that contracting work is here to stay. There are a number of benefits for organisations, and reasons for continuing to offer contract work, and a few disadvantages.
Pros
- Flexibility: Contracting provides flexibility for the organisation when work fluctuates.
- Speciality Services: The organisation can buy in specialist services e.g. couple therapists, EMDR therapists, external clinical supervisors.
- Lowers Operational Costs: Increased efficiency through lower operational costs and employment of less inhouse clinicians.
- Contemporary Practice: Subcontractors bring up to date knowledge on trends, laws etc into an organisation.
- Increases reach. More clients can be seen when more contractors are engaged, as mentioned above.
Cons
- Loss of Accountability: Without good policies and practices in place, some organisations may not be sufficiently aware of the work their contractors are doing.
- Public Perception: There may be feared public perception of decreased customer service if many contractors are doing the work of an organisation, however in some organisations, contractors do feel part of the organisation and promote the organisation’s brand.
- Loss of oversight: Overseeing large numbers of independent contractors may be labour intensive in terms of processes but also if contractors need more input or training if there are gaps in their knowledge or skills.
Contracting companies provides benefits of scale for organisations, and ease of communication with a single point of contact, but it can also reduce the opportunity for organisations to work closely with independent contractors who may hold specialist skills and experience with a particular client group(and have often been recommended as individual practitioners). This seems to be the direction that larger organisations are now going.
So, given the above, how do you decide if independent contracting is right for you?
For Independent Contractors
Pros
- Work Flexibility: A major advantage of contract work over employment is work flexibility regarding hours, days and the ability to work across different organisations. You may be able to work from home or work in an office with hours that suit your home and family life.
- Work-life balance: Work flexibility is a factor that improves work life balance.
- Independence: Contractors generally sit outside of the workplace structure. This can be a benefit when some organisations are hierarchical, there are problematic interpersonal team dynamics or the organisation doesn’t operate well.
- Choice: You have the choice to take on different types of contracts in locations that suit you. There may also be more choice regarding client allocation, based on your specialisation and availability.
- Trialling out new practice fields: Contracting provides the ability to ‘dip your toes’ into a new sector and ‘test the water’ with short term work contracts to determine if the sector interests you before committing to a full-time job.
- Increased hourly pay: Contract work is renumerated at a higher hourly rate but this rate takes into account the other benefits that employees get.
- Build Your Brand: There can be satisfaction in building and managing your own brand and small business.
Cons
- Holding Risk: You may be required to hold client risk, although best practice organisations will have risk policies in place that include contractors.
- Isolation: There may be less opportunities to engage in team activities, or know team members, though best practice organisations include contractors in team social activities.
- Working Independently: Many contractors will work largely unsupervised. You may not have access to inhouse support/debriefing or paid clinical supervision. Contractors may require more support from management or administration than the organisation is able or willing to offer.
- Out of the Loop: Contractors may not be abreast of changes in organisational policies or political decisions affecting the sector that affect their work if they do not attend team meetings.
- Risk of contract scope-creep: This is where contractors are expected to do more activities and tasks that go outside the scope of the original agreement e.g. interpreter bookings, room bookings, recording information in internal client management systems.
- Insecure work: Contract work can be unpredictable and insecure. There is irregular cash flow, lack of job security and often hidden expenses. You may need to reapply/reinterview for a contract position at the end of a set period.
- Inconsistent Referrals: You may have inconsistent referrals, client cancellations and lack of choice over appointment times (which may be spread out over a day) if appointments are managed on your behalf.
- Financial Implications: Contract work may have implications for applying for a house mortgage (but check this against different bank policies).
Although it is important to be aware of some of the potential pitfalls of contract work for contractors, many of the above situations can be negotiated in the contract or worked around if you are aware of them.
Other Things to Consider
Independent contracting can offer much flexibility and professional autonomy, but it’s not without its challenges. Consider the following before deciding if this path is right for you:
- Do you prefer stability or variety? Contracting allows for diversity in your work, but with that comes variability in income and job security.
- Are you comfortable managing your own business? As a contractor, you’re responsible for your own tax, insurance, and superannuation. You’ll also need to manage your brand, client relationships, and professional development.
- How much flexibility do you need? If you thrive on flexibility and self-direction, contracting can offer the work-life balance and control over your schedule that many clinicians crave.
- Can you handle the uncertainty? Without the safety net of a regular paycheck or guaranteed work, contracting can be unpredictable. You’ll need to be prepared for quiet periods and manage your finances accordingly.
- Do you want to specialise? Contracting often allows clinicians to focus on specific areas of practice, which can be highly rewarding. It’s a great option for those looking to refine their expertise in a particular field.
Conclusion
Independent contracting in the clinical field offers both rewards and challenges. The flexibility, variety, and opportunity for independence can be highly appealing, particularly for those who enjoy autonomy in their professional lives. However, contractors must navigate unique risks, including financial unpredictability, isolation, and potential contractual complexities. Balancing these factors carefully and maintaining open communication with contracting organisations can help to optimize the benefits while mitigating potential drawbacks. Being informed, proactive, and seeking appropriate professional advice are essential steps in making independent contracting a sustainable and fulfilling career choice. If you would like support in making decisions about contracting, feel free to contact me for business coaching.
In the next blog in the series, we will look at 10 tips for what you need to know to make contracting successful.
About Melinda Austen
Melinda Austen is a clinical supervisor and workplace and leadership coach with over three decades of clinical experience working with refugees, asylum seekers, Defence veterans, Police and couples. She now helps the helpers. Melinda supports colleagues, including social workers, clinicians and other professionals such as lawyers and allied health who work with vulnerable clients. In her supervision and workplace coaching practice at person2person Consulting, she is driven by a desire to help people foster healthy, productive teams and thrive in their work. www.person2personconsulting.com