By Darren Moore, Consultant at Marks Sattin
Darren Moore leads the contract/temporary division of Marks Sattin for the North West. After graduating with a degree in Finance and Accounting, Darren joined an interim management provider recruiting for candidates within the contract and interim market. He has extensive experience in recruiting interim managers across a variety of disciplines, including finance, and his specialist knowledge and experience ensures that he truly understands client needs and candidates’ strengths.
The stereotype of a temporary worker is one that is low skilled, underpaid, overworked and lacks career progression. One of the things I hear too often is ‘I’ll only temp if I’m desperate’, but what more people are beginning to realise is that this form of employment can provide people with a great career and, in a lot of cases, an even greater income. Within accountancy, more candidates are opting for non-permanent employment from ledger clerks to directors of finance.
More accountants are becoming a ‘career-temp’, or a contractor, whereby they will go from one assignment to the next and not worry about the amount of employers on their CV but more so about their reputation. Marks Sattin ‘Accountancy & Finance Market Report 2010-2011’ shows that 65% of contracts can last up to nine months showing, contrary to popular belief, that they aren’t all short term placements to cover sickness.
A benefit to becoming a contractor is that the candidate has the freedom to become specialised within a certain area of finance, such as IFRS, Internal Audit, Financial Reporting or Financial Planning & Analysis. Although temping can be high risk when looking for the next assignment, for those within a role, research has shown that nearly 55% of contractors would rate their current job as secure, compared to 65% of permanent employees who say their job is secure and only 20% would say their job is very secure.
By specialising within a field of work, temps are able to charge a premium and achieve a higher rate. An incentive for opting to temp or contract is the tax benefits when operating through a personal limited company or an umbrella compared to Pay As Your Earn (PAYE). For example, for a contractor earning £200 per day, their net annual return will be £32k – PAYE, £36k – Umbrella, £43k Ltd Co and £44k Ltd Co (IR35 pass)*. These tax benefits only become greater the more senior the contractor becomes. Contracting also creates an excellent opportunity to network with other professionals who keep you up to date with the latest developments and challenges throughout the market. Also, temp recruitment turnaround tends to be a lot quicker than permanent, as immediately available people can be more attractive and advantageous than employees that need to give a three month notice period.
However, temping does have certain disadvantages which need to be highlighted. As permanent employees are considered an investment to an organisation, they are more likely to receive training and continuous development, where a temp will not, as they will already possess the necessary skills to perform a role. Also, promotional opportunities will be more difficult to come by and contractors will have to be more proactive in their own career progression. Another disadvantage is that the temp may need to temporarily relocate to gain new skills or join the more desirable projects which may not coincide with there lifestyle.
Finally, temping and contracting depend on many aspects such as personal circumstances, stages in career and amount of opportunities available. Regardless of the decision, candidates between work should realise that temping doesn’t have to be a last resort.
*These figures are for illustration purposes only. They make various assumptions (which have been consistently applied) about expenses claimed, days and weeks worked, declared salary and level of pension contributions based on findings from http://www.1st-option.co.uk/FreelanceCalculator.aspx
Have you got a question for Darren? Did you find this post helpful? Feel free to leave your questions and comments below.