Disadvantages of contracting

By Greg Dickson

Though contractors have many benefits over the permanent equivalents, they've still got to face number of Problems. Since contracting is not all about an 'easy ' life, one has to go thru these drawbacks before proceeding to make any call to start contracting. Therefore , it is very important that you study both advantages as well as drawbacks.

One of the biggest disadvantages of contracting is insecurity. The contractors have to find contracts that suit them. Once they've found the contracts, they should work on cooking up a bid for those contracts. They might have to do some study before they can bid. Even after they bid, they're never sure about winning the bid. It may take a considerable time for some contractors to secure their first few contracts.

Aside from winning the contracts, the contracts need to face insecurity with their short term nature of the job. After securing a contract, contractor will only have work for a couple of weeks or months, in few cases. They will have to look for new contracts as soon as they're nearing the end date of the current contract. This makes contracting highly insecure. Some people can't have reassurance with this sort of low security.

The contractors also face issues when it comes to employee benefits. Usually, contractors do not get these benefits. Take the example of loans. The contractors have to find contractor mortgages to get the loan. On the other hand, the staff can get these loans from anywhere they like after they have good credit history.

The contractors, you pay your National Insurance at your own. You have got to pay high premium now at 12.8%. Aside from this, contractors also need to setup allowances at their own. But they can take all these employment benefits by joining umbrella company. Just make absolutely sure that you know these downsides before contracting.

About the Author:

Greg Dickson is head of promoting for the Bedouin Group, one of the number one providers of umbrella company solutions for contractors and self employed staff. Bedouin Money also provides contractor mortgages and contractor allowances.