How do you move from being a permanent employee to a contractor?

This is a question I get commonly asked, in fact at least monthly someone wants to discuss this in detail. They want to know the secret formula for being a successful contractor in today’s contracting market. It’s not a secret, there is no magic formula but there certainly are things you can do to get the most out of being a contractor. After 15 years of contracting myself, I have collated my top 10 tips.

Firstly, let me start by saying the term ‘contractor’ can mean different things to different people, for the purpose of this article a contractor is:

Contractor: A person who is either hired through a labour hire company/recruitment firm, or directly through their own business to an employer for a specified duration of time, to complete a specified task and is usually paid a daily rate or a fixed price to achieve the deliverables. The contractor would have a ‘contract’ that specifies the terms of the engagement including the duration and expected outcomes.

Fixed Term Contractor: According to Fair Work Commission Australia, “a Fixed term contract employee is employed for a specific period of time or task (full-time or part-time). For example, a 6-month contract where employment ends after 6 months. Fixed term employees are different to permanent employees who are employed on an ongoing basis until the employer or employee ends the employment relationship. Full-time or part-time fixed term employees are generally entitled to the same wages, penalties and leave as permanent employees.”

There are clear differences between being a contractor and an employee, notably the holiday leave/sick leave and other benefits some employers provide are some of the main reasons why people would choose to be an employee over a contractor. As are the benefits of having longevity, not having to worry about your next contract and the certainty of your next paycheck.

The Australian Contracting Market is Growing, the contracting sector in Australia is experiencing continuous growth. There are clear benefits for companies employing people on a contract basis, many organisations find utilising contractors fills several needs including reducing headcount, onboarding talent quickly, support on specific projects for a specific period and supporting a more flexible workforce to name a few.

So, if you’re in a permanent role and looking to move into contracting, what are the top 10 things you need to know to improve your chances of success in the Contracting market.

1. Think about why you’d like to move into contracting before you do it

Before you leave your current employer, ask yourself why you want to move into contracting. Is it because you’d like more flexibility, want to expand your horizons across several organisations, enjoy project work, enjoy the opportunity to work in many different locations, want to increase your exposure to different industries, like different cultural experiences then read on.

2. Do research on your role and the industry

It’s important to do research on anything new that you are interested in doing, that is when buying a car, building a house or bringing home a new puppy. Looking for new employment is no different. You should look at the role, industry and experience you need. Look at what rates are on offer, the types of roles, the availability of those roles. Find out as much as you can about your ideal role and the industries you’d like to be involved in. Will you be specialising in something or will you be a generalist?

3. Be wary of the dead zone

When should you start looking for a new role, for example in banking, they tend to hire less around the end of the banking financial year (August – September). Whereas many other organisations tend to hire in the new financial year (July) or in a new calendar year (February-March). What is the dead zone for your industry, many employers tend to not hire non-urgent roles from (October- Early January) because of Christmas and new year. This ‘dead zone’ makes it difficult for a contractor if they are finishing their existing contracts around this time.

4. Build your networks

Any good contractor will build and maintain strong networks online and offline. That is ensuring you are keeping abreast of what’s happening in your industry and what people are up to around you. You need to build a good network, as a good network can help you to build and grow your profile, your reputation as a specialist in your chosen field and help bring to light new beneficial opportunities and is a great source of advice and guidance. Your network can help you along the way, LinkedIn is a great place to start.

5. Build your brand

What is your brand? Your brand is simply YOU! What is it you want people to say about you, how do you present yourself to potential clients and to your network. How do you operate, what do you add to the culture of an organisation? How well do you do your job? What makes you great? How do you giveback and help others? When moving between contract roles, you will often need to sell yourself again and again, to new and prospective employers. Unlike a permanent role where you would have likely built these relationships over time.

Think of yourself as a cereal box on the shelf in a supermarket, how do you stand out?’

6. Ensure your LinkedIn Profile is up to date, and that your resume aligns to your LinkedIn Profile

The number of people on LinkedIn in Australia (approximately 8 million in 2016) continues to rise. So, if you are in the workforce and looking to network, LinkedIn is a great start. The exposure to a new opportunity is very possible if you’re on LinkedIn and your profile up to date. Don’t create a LinkedIn profile, only to not use it. These days many employers are looking to LinkedIn for a glimpse into the individual beyond the resume. And more importantly, a LinkedIn profile that does not align to your resume is sloppy, so don’t let it happen. Missing dates, incorrect job titles or inaccurate information can quickly damage credibility with possible employers.

7. Before making the leap into contracting, assess your individual situation, be aware of the risks

Like any life change, assess your risks and the environment you’re in. Once you’ve assessed where you are in life, your background, your ability to work flexibly, your financial situation, your future dreams and aspirations, you may then make a conscious decision on taking the leap. Before taking the leap, its recommended you have some savings, as moving into contracting roles, does not happen overnight, it may take 4-12 weeks (for some longer) to move into a contract role. Be patient and continue to reassess where you are along the journey.

8. Do a good job and maintain a good reputation with employers and recruiters alike

This isn’t specific to being a contractor and you should always aim to maintain a good reputation and good relationships but in the contracting market because often your experiencing different companies, industries, employers more frequently, you need to work twice as hard to build up that relationship with the new employer. Think of it as continuing to sell yourself and your brand and the quality of your work repeatedly.

9. Ideally you will have your next role lined up before you move between contracts

A lesson many of us (like myself) have learned along the way, it’s helpful and more of a positive experience if you can line up your next contract before your existing one concludes. This contract can be in the form of an extension with an existing employer, or building up other opportunities if you know your role and you are no longer required once your contract ends. I can’t stress how important this is, it’s not always possible but if you put in the effort, then you will minimise the ‘in-between’ stress that being between contracts causes, especially in your earlier days.

10. Save for a rainy day

Finally, and a very important one, save, save, save. When I was just starting out, I went from one contract to another for the first 3-4 years, so I didn’t save very well. Then once I was an ‘in-betweener’ and did not have a contract lined up as it was during the dead zone period, I realised I had not saved and ended up borrowing money to make ends meet during the time I was between roles. This has thankfully only happened to me once in 15 years, so it can be a rare occurrence but it’s always better to be prepared and plan ahead. Save at least enough to get you out of trouble for 3 months, in case you find yourself as an ‘in-betweener’ like I once was.

“Don’t become an in-betweener!”

Now you’re ready with my top tips, what’s next?

Research different employers, look at different job boards and familiarise yourself with the different avenues available to obtain new contract work options. Beyond websites like (one of the most popular), you can use LinkedIn job boards, direct contact with recruiters and even through networking groups. Put in the time and effort and you will have a higher success rate.


Skilled people are now seizing contracting opportunities and agree that roles are progressing their careers through gaining exposure to a variety of different industries and projects. Contracting also gives many professionals a window into different organisations and industries and cultures that they wouldn’t have had the chance to directly experience on a permanent basis. The contract market is maturing and evolving at a rapid pace, and contracting is becoming a highly desirable employment option for organisations and candidates looking for flexibility. In 15 years of contracting, I have had amazing roles, with great employers, wonderful bosses. I have no doubt had hurdles along the way, as you will to but it’s how you deal with them that’s more important.