The Perks of Being an Independent Contractor in Architecture and Interior Design
There is a common misconception that Contract roles are where you potentially compromise your entitlements and job security for a higher rate of pay.
This is pure nonsense in most cases and commonly repeated by unions or people who don’t understand what it really offers. Contract roles offer both individuals contracting and the end user, design offices (who use them), a range of benefits. From flexibility and experiential variety, to (actual) financial security and opportunities to secure top talent and roles, you may find the perks of being contracted too alluring to resist.
The Perks of Try Before You Buy
Before we break down the advantages for Employees and Employers; let’s look at the overall benefit: a Contract role lets everyone ‘try before you buy’.
Concern about job security is why many people get put off by a Contract role. But when there is a situation, where say either practice or Candidate are unsure, a short-term contract lets everyone test the waters. Whilst Employers can engage staff with a probationary period, there’s often little opportunity to review the role or salary offered.
So at the end of a contract, both parties already know each other a lot better and this affords both parties a better opportunity to “know what they are getting” in terms of performance and pay.
In fact one of our recent placements was for a Project Architect on a $50m project.
The individual (from their own practice) was engaged at a high hourly rate compared to a typical staff member’s salary (approx. $90 per hour, equating to $148,500). Given the project specific role and seniority, it was a “no brainer” for our Client who was without the talent to manage a major project. Without that contract option, our Client and the Independent Contractor would not have met. The project could have potentially gone sour, and the Independent Contractor may not have found a career opportunity so soon.
For companies, offering a long-term Contract (or a higher rate for in demand or short term roles) immediately attracts a larger talent pool. It’s in both parties interests to get higher quality skills and remuneration based on the higher return; financially for the Contractor, and their are less problems for the end user.
Why should you consider Contracting?
There’s obviously more to it than that. Yes, you can both try before you buy, but now let’s consider the actual perks of doing so. Testing out a practice before committing to a longer term (subsequent) contract or ultimately a more rewarding Permanent role offers greater flexibility, a higher rate of pay while you sample, as well as a variety of projects and experiences to whet the design palette.
Contract positions offer the convenience of flexibility. Designers are creative people, who work best in an environment that fuels the design process. If you’ve landed yourself a job in a practice with dense office politics, which obstructs productivity, then you have the freedom to hightail it out of there upon project completion, and in worst circumstances the option for both parties to termination of the contract without recriminations or consequences for either party.
Travel is also a possibility for Architects and Designers on Contract, which typically last for 3-6 months. Working for a shorter term permits a greater degree of movement for the individual who wants to embark on a working holiday, accept a lucrative overseas opportunity, or simply take their laptop and freelance for a change of scenery.
We actually had a job last year where the Design Practice was located on a Queensland beach!
Higher Rates of Pay
Independent Contractors are awarded what appears to be a higher hourly rate, and unlike the myth suggests, they do not however lose any benefits. In fact, they receive the same benefits in a different form PLUS their hourly rate is subject to supply and demand. An example would be where an End User / Design Practice CANNOT legally offer you a Contract role if you could be paid less than the minimum rates of pay for an employee INCLUDING penalty rates. In a growing market, where demand exceeds supply, you will be paid a much higher rate and paid for ALL hours worked – how often does that happen in a Permanent role?
So if you’re willing to forego sick leave, holiday pay and annual leave for a heftier wallet, then a Contract position is a nice path to some quick dough. Just think about it: on staff you may never choose to take sick leave and you don’t always get paid extra for additional work, whereas on Contract your hourly rate is inclusive of sick and holiday etc. payments e.g. when you work those entitled 10 “sick days” each year – you pick up 2 weeks extra pay.
While overtime rates rarely apply (as a true contract is project or time specific for a result to be obtained) – the rate will apply to ALL hours. And for the practice engaging the Independent Contractor – they are getting results! It’s a win win.
Interior Designers and Architects can also secure higher pay on contract when projects require an expertise beyond what existing staff can provide, or that expertise is not easily available in the market. So if you have skills not easily found – demand does and will force YOUR rates up. Permanent salaries tend to show these movement at least 12 months after it has already occurred in the Contract marketplace.
Similarly short term fluctuations in demand and supply also give both the design practice and the independent contractor flexibility. Contract roles open up the opportunity of bringing in talent and specific software skills (CAD) where necessary, and those with the years behind them can profit even more as a result.
If you’re interested in hearing more about the pay rate differences, or rate conversions for hourly rates to salaried position, you can request a copy of our rates and salaries guidelines and talk to one of our consultants.
As Contracts generally last between 3 and 6 months (though many can last a lot longer!), the variety of projects upon which a Contract Interior Designer or Architect works will inevitably be diverse. This is creatively stimulating and professionally advantageous, providing exposure to projects across a range of industries, with opportunities for networking and portfolio building.
Why are Independent Contractors Good For End Users?
Contracting is a highly beneficial strategy for businesses. Design practices often used Independent Contractors in the 80s, but now contracting is used less and less when all other professions are using it more and more. So why is this? The answer is in supply and demand.
There has been more consistent work on offer, so Employers have felt happier to offer more Permanent positions, rather than project or skill specific roles. This could, and probably will change again, and if it does, design practices need to be on the front foot and actively considering what’s best for the future.
Contract roles also offer security in a flexible hiring and financial strategy without negating totally the potential downsides of redundancy, it also affords businesses a great opportunity to grow the skill set of existing juniors with specialist mentoring. For these reasons and more, the golden contracting orb glows just as brightly in the hands of Employers, but Employers are not currently using these opportunities as much as they could and should.
Retaining Contractors is a recipe for guaranteed hiring flexibility. The truth of the creative industries is simply that practices aren’t always in a position to hire more staff long-term, or cannot find the talent they need when more hands are required on deck. Contract engagement allows practices to swell or shrink their numbers as required by the practice’s workload.
As an added benefit practices are able to engage Independent Contractors on market terms. You are in a position to assess specific skills or expertise. It’s also important to understand there is little to no difference between terminating an Employee or Independent Contractor in their initial months of engagement, despite an Employee being on a contract of service whereas a Independent Contractor is engaged for a specific result.
For Contractors with rare or highly sought after skills it also does NOT mean they have to be put off before Permanent Staff – so consider carefully the skills you have or need, the experience you want, and therefore what utilising Contractors can bring rather than Permanent Staff for both parties – it’s a real WIN WIN!
Securing Top Talent
Contracting is a sustainable strategy to secure top talent for your practice Although you’ll have to pay a more experienced Contractor a higher hourly rate, their (or their companies) skills and knowledge are at the practice’s disposal for use on advanced projects or to pass their wisdom onto juniors.
Other Things To Consider
Before you set out to jump into or advertise your next Contract role, consider these points to ensure your contract is up to par, and meets the requirements of the Australian Tax Office:
- Understand that an Independent Contract role is different to a Temporary Employee or an employee engaged for a specific project
- Understand the difference between a results based contract and a contract of service
- Leave no ambiguity as to the scope of the engagement and the responsibilities of the parties
- Clearly express when and under what conditions if there is possibility for renewal
- Consider liabilities based on the Contractor’s entity including PAYG and or Superannuation – yes, this will be dependent on Contract requirements an Independent Contractor may require you to pay superannuation or in specific circumstances withhold PAYG)
Keeping the above in mind is critical. Be aware that sham or fake contracts impose high fines on employers trying to evade their responsibilities.
Want to know more?
BT&P have over 34 years of experience, administering and managing Independent Contract roles WITHOUT issue for our Clients, as the only Recruitment Agency with a proven system and unblemished record in Payroll and Administrative Service for Independent Contractors and Temporary Staff.
If you have questions or concerns, please get in touch with our friendly team at Bloomfield Tremayne & Partners.