The more you know: Navigating the switch
Navigating the switch from Employee Status to Independent Contractor.
Everyone dreams of being their own boss one day, and yet so many believe that this dream is unattainable.
In reality, all you need is a little determination, some time, a few dollars saved up, and a whole lot of planning.
Whether you’re working in a kitchen, on a construction site, or in an office, navigating the switch from employee status to independent contractor is possible, despite how intimidating or far-fetched it may seem.
Why Do People Want To Become Contractors?
There are a number of reasons why individuals wish to leave behind employee status is exchange for contract work. Some of the desirable aspects of contract work include:
- Improved work/life balance – more and more, individuals are craving more flexibility in their schedules. The 9-5 is no longer cutting it for many people, and they seek positions that allow them to spend more time at home with their families, travel more freely, or simply keep their life balanced to ensure they don’t burnout. Being a contractor typically offers a lot more flexibility than that employee work does, as your work is calculated hourly rather than on fixed terms.
- To earn more – one major draw to transitioning from an employee to a contractor is the opportunity to earn more money. As contractors hire out their services per hour and are their own bosses, they can set their own pay rates. Now, setting your own pay rate, especially at a high rate, only makes sense (and will only be successful) if you hold a higher skillset than others in your industry or offer unique or niche services that are more difficult to acquire. If this is the case, however, being able to set your own pay rate can have a great pay off, and the potential to earn more than you would as an employee is high.
- To semi retire – the traditional path of working until your 50’s or 60’s and then settling into retirement is becoming less and less common, as many individuals choose to work longer or are unable to afford retirement. For either of these cases transitioning from employee to contractor may be beneficial. This transition can allow you to work fewer hours and have more flexibility, allowing you to enjoy your later years while still supplementing your lifestyle with some form of income.
As you can see, contract work definitely comes with its fair share of benefits – but that does not mean it is the right path for everyone. There are a variety of benefits to being an employee that you will lose if you transition to contractor, and in a sense being a contractor comes with extra duties you will be in charge of, such as handling your own taxes, insurance, etc.
Be sure to do your research and determine whether the pros and cons of switching from employee to contractor are in your favour before making any big decisions.
Contract Work and Accounting
As stated earlier, transition from employee to independent contractor is possible no matter what industry you work in – take accounting for example. There are many reasons why those working in accounting may want to make the switch.
Perhaps you are feeling stuck in your cubicle working the traditional 9-5 Monday through Friday, and feel that with your skills set, education, and experience you could find work in the industry that is more exciting, offers a change of scenery, and even higher pay – you’d be right. You just have to know what to do and where to look.
You Have Options
Accounting isn’t just the cut and dry tax preparing work that many believe it to be. The industry is diverse, offers a range of potential types of work, and is global, meaning that you can essentially find work in accounting across the world.
If you are interested in transitioning to a contractor, you first need to determine what area of accounting you are the most skilled in, the most educated in, and has the largest market and job availability for independent contractors. Some career path options include: financial accounting, audit accounting, tax accounting, consulting, and even forensic accounting.
The more unique your skillset is and the more diverse your experience is, the higher chance you will find quality contract work and the higher the rate you will be able to charge.
The Best of Both Worlds
Being an independent contractor in the world of business, especially in accounting, is a great way to blend traditional skills with a more modern approach. It’s a great way to utilize a business education all while being able to network, build up your own business, diversify your skillset, and live a life free of the typical office job constraints.
Services Available to You
Often times if you are just starting out as an independent contractor, you can first offer your services through an agency. This is a great way to get your foot in the door and begin building your resume as an independent accountant.
By hiring yourself out with the help of an agency you have a larger pool of job options that may not be available to you (or you simply may not be aware of) if you were searching on your own. Even if these starting jobs are not ideal, they are a great way to spread your name, build your resume, and make contacts in the industry – all of which are incredibly important when working independently.
The Time Is Now
It’s never too late to take control of your career and your future if change is what will make you happy. The idea that escaping the mold, being your own boss, and having the financial and physical freedom to live the life that you want is more attainable that you may think. No matter what industry you are in, what type of work you do, or where you live, making the switch from employee to contractor can be your next step if you just work for it.