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In Issue 2, 2020, Ben asked: "Does becoming a contractor have drawbacks if you wish to go back into a company at management level in the future?"
"It will depend on which part of the management chain you wish to join. But it is likely there will be two drawbacks. Firstly as a contractor you may have difficulty in demonstrating any relevant managerial experience. Managing yourself is not the same as managing a group of people, even though you need some inter-personal skills to be a contractor. Secondly you need to be able to assimilate the company’s culture, which you will have to learn on the job. This means that your effectiveness as a manager will be low until the learning process is complete."
Richard Bossom
"In order to reduce the risk of being considered inside IR35 I would generally recommend not working for the same company as contract and staff. Considering that the IR35 risk will shortly be passing from contractor to hiring company then a risk-averse company may regard taking you on as staff at a later date to retrospectively impact the inside/outside IR35 determination made when you were a contractor. This would be less of an issue if the role was significantly different."
Anonymous
Note: IR35 regulations are changing this year. Seek specialist advice.
"In theory, this should not be a problem but I can see some cultural barriers due to relationships between contractors and employees. This can be managed but this needs to be done actively, rather than assuming that it will be OK."
John Reddyhoff
"It should not, since further experience is gained. In my case I had to become a subcontractor due to redundancy. It was the only way I could get work at the age of 60, since ageism was rife in companies. The law should be further reinforced on this issue."
Roger Bostock
"Quite possibly because you could be seen as being out of touch with current management practice, and any previous management experience may be seen as less relevant. The only way to avoid this is by becoming a non-executive director and/or interim manager. However, most contractors tend to be operational/technical experts."
Mark
"By ‘contractor’ I assume you mean a sole trader working for a company for which you used to be an employee. If so, then yes of course it has drawbacks. Companies will always view people’s career choices when assessing them. If you became a contractor but then did not manage to get any work from any company other than the company for whom you were originally an employee then you will be judged to have no drive or initiative and simply to be dodging tax."
Nigel Ayton
"Yes. Once you have been on the contract side of operations, the “permies” (permanent staff) will always see you as being in the position you started in. At this point, promotion is almost non-existent and returning to the other side will be very hard. At least this is my experience."
Matthew Waterhouse
"To progress upwards into management you need to be able to take on more complex tasks and prove you can do them – these tasks tend to be given to permanent employees rather than contractors! This means that it is difficult to prove yourself at the more complex management level."
Stuart Kirby
"It’s all about what you’ve been doing as a contractor and what skills you’ve picked up and developed. If you’ve been performing duties as a contractor that would be relevant as a manager in the future role then there shouldn’t be a problem."
Vince
"Do not think that being a contractor will matter that much. It should matter more in that, between now and when the time comes, one develops one’s capability, reputation and network so that one may effectively take up higher responsibilities."
Richard Fung
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Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.