What are the Pros and Cons of Contractor Employment?

What are the Pros and Cons of Contractor Employment?

A sizeable portion of the workforce in Britain is moving away from the traditional role of a fixed-term employee with a salary and benefits, and towards the more flexible freelancing role. A contractor is an individual or organisation that provides a particular service to the business from outside. They’re often, though not always, employed by an agency, and they may have their own employees and contractors of their own – unless, that is, they’re prohibited from having them by the contract.

What are the Pros of Contractor Employment?

There are several notable plus points which make contractor employment attractive.


Contractors get the freedom to make their own decisions about when and how the work is done. Those who find having to take instructions restrictive may find this freedom especially important.


Another sort of freedom comes from the ability to choose which contracts you take up. Since you’re not tied down to a long-term position, you have the ability to walk away from a job at any time, and for any reason. With that said, you still have your reputation to preserve, and there may be hidden costs to walking away without good cause.


While employees might find themselves uninspired by an unending stint in the same office, those in freelance roles can expect to move from one place to another. This added variety and unpredictability might have psychological value – and it might explain why some positions experience higher staff turnover.


Contractors are generally brought in to provide a specific service, and since they don’t come with the burdensome administration of a full-time employee, they can demand higher rates of pay. As such, those looking to earn as much as possible will want to consider making the switch.

What are the Cons of Contractor Employment?

On the other hand, there are also identifiable downsides to this approach.

Job Security

Just as contractors are free to leave their job, the organisation hiring them is free to do the same. Moreover, contractors will need to go to the extra effort of actually finding work in the first place, which may be an ongoing, arduous process.

IR35 Reforms

One of the problems with contracting is that some contractors and employees might try to disguise the nature of their relationship for tax reasons. This is one of the things that IR35 regulations is designed to thwart. If reforms are extended, then they will place a not-insignificant administrative burden on contractors. If you’re wondering: “what is ir35?” you’ll find detailed explanations online.


Contractors are responsible for their own tax obligations, and will need to deal with tax returns and the payments that go with them. These tasks can add significantly to your workload, especially around January time when tax returns are due. The responsibility of getting everything right will also rest with the contractor.


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