The Reality of IT Contracting: Lessons Learned

The Reality of IT Contracting: Lessons Learned

Understanding the Difference: Permanent Employee vs. Contractor

As an IT contractor, the roles and tasks often appear similar to those of permanent employees. However, the difference in pay between contractors and permanent employees intrigued me. It took me five years to fully understand why contractors earn significantly more. This year, I finally grasped the key differences.

Mentorship and Tactics

Learning from Experienced Mentors

One of my mentors, Erika, who runs a YouTube channel on bridging gaps in IT, advised me to apply to all contracts in the market. I took this advice to heart and actively applied to every available contract. This push marketing tactic proved to be very effective. Additionally, another mentor, Rob, mentioned that as a contractor, it's normal not to receive 100% of the pay, but rather 90%.

The Application Process

The continuous application process is crucial in contracting. Unlike permanent employment, where you expect to earn 100% of your income, contracting requires constant searching for roles. This became evident during the pandemic when many contractors lost their contracts due to delayed projects by enterprises.

The Reality of Contracting

Instability and Risk

Contracting inherently involves more unknowns compared to permanent employment. These unknowns, such as economic downturns, new regulations (e.g., IR35 in the UK), and personal visa situations, create instability. During the pandemic, even seasoned contractors faced difficulties. This instability means that contractors need spare cash and resources to weather tough times.

The Need for Financial Resilience

One of my friends had to return to permanent employment due to the uncertainties. To succeed as a contractor, you must have financial resilience. This includes having savings and the ability to sustain yourself during periods without contracts.

Understanding the Market

In contracting, enterprises can delay projects, causing fluctuations in demand for contractors. Permanent employees, however, usually retain their roles and continue earning money. This discrepancy highlights the importance of having a buffer and being prepared for periods without contracts.

Strategies for Success

Embracing Unknowns

Instead of avoiding unknowns, embrace them. I am setting up companies in the US and Europe to land contracts more easily. This diversification is a defense mechanism to ensure continuous income.

Multi-Business Approach

I am also diversifying my income streams by creating a video production business and offering online courses. This multi-business approach allows me to switch tasks, avoid burnout, and enjoy a variety of work.

Becoming Anti-Fragile

Inspired by Nassim Nicholas Taleb's concept of antifragility, I aim to grow stronger through chaos and threats. By setting up multiple businesses, I mitigate risks and ensure that if one income stream fails, others can support me.

Conclusion

The higher earnings of contractors come with increased risks and uncertainties. To thrive in contracting, you need to embrace these unknowns, diversify your income streams, and prepare financially for lean periods. By doing so, you can not only survive but also thrive in the ever-changing landscape of IT contracting.

If you have questions or experiences to share, please leave them in the comments below. Let's learn and grow together as a community.

Thank you for watching, and I look forward to sharing more insights with you in future videos.

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Imported from rifaterdemsahin.com · 2025