Cliona Quaid is the Contractor Manager at Berkley. In this interview, she tells us about her path into recruitment and the role of contracting in today’s ever-changing environment.
Path into Recruitment
Having completed a degree in HR at UCC, Cliona has enjoyed a long career across a diverse range of areas. “I started in banking but decided to broaden my horizons by travelling and working in Australia, the States before settling in London for a number of years.”
On returning home, Cliona carved out a successful career in HR working in a much-loved institution of Irish sports. “I worked as a Human Resources Officer with Munster Rugby. When I joined, Munster was in the early stages of going professional, so it was a very exciting time to be part of it. I was there for eleven years and enjoyed every minute of it.”
Eventually, however, it was time for a career change. “Recruitment appealed to me because I‘m very people focussed and I tend to veer towards roles where I get to help people”, she says, “Plus, there was a strong overlap with my HR background.”
The Move to Berkley
In 2020, Berkley approached Cliona about taking on a brand new position as Contractor Manager. “The role seemed like a great fit. It allowed me to use the skills I had developed throughout my experience working in HR and recruitment. Plus, it brought together two things I love – engaging with people and problem-solving.”
“The main remit of my job is to help foster strong partnerships between our clients and our contractors,” Cliona explains. This involves providing post-placement support to both the candidate and the client.
What are the Benefits of Taking on Contractors?
In recent times, more and more organisations have turned to contingent workforce models to resource their projects. According to Cliona, there are many benefits associated with taking on contractors, “In today’s climate, flexibility is key. Hiring contractors is a dynamic way to adapt to the everchanging market”.
Career Advice to Contractors
“Because of the fixed-term nature of contracts, career contractors will spend a lot of time job-hunting. This can be a very time-consuming process, but you can make things easier for yourself by building a strong relationship with a specialist consultant. By partnering with a seasoned professional who knows the market inside-out, you will be able to move from one role into another with minimal disruption. The consultant will also be able to offer advice and support as you work towards your long-term career goals.”
Berkley Recruitment is thrilled to announce the launch of a new webinar series entitled, “A Contractor’s Guide to Personal Finance.” This two-part series aims to address common questions that contractors have about personal finance matters.
Taking place on the 24th of February, the first webinar will focus on the subject of Mortgages and Buying a Home. Panellists will include Margaret Barrett, a Mortgage Origination Manager at Bank of Ireland, and conveyancing solicitor David Sweeney.
The second webinar will offer an in-depth guide on pensions and retirement planning options for contractors. This will be co-hosted by Berkley and Qualified Financial Advisor and Pensions Specialist, John Forsythe.
“Contracting has become very popular in recent years as an increasing number of organisations are adopting more flexible workforce models. We are seeing more and more first-time contractors who have a lot of questions about how their employment status will affect their personal finances. Our webinars will connect contractors with knowledgeable professionals who can clear up confusion that they may have.”
~ Cliona Quaid, Contractor Manager
A question we commonly hear from candidates is “can contractors get mortgages?” There is a widespread misconception that only PAYE employees are eligible for mortgages in Ireland. This myth is enough to discourage professionals from pursuing a potentially lucrative and rewarding career in contracting.
Table of Contents
- Can Contractors Get Mortgages in Ireland?
- What is a Mortgage?
- Mortgage Providers in Ireland
- Working Out Your Budget
- The Application Process
- 5 Tips for Contractors Applying for Mortgages
- Watch Our Webinar!
Can Contractors Get Mortgages in Ireland?
The good news is that Irish mortgage lenders are more than happy to work with contractors. In this article, we will offer an in-depth guide on mortgages for contractors. If you have any questions, we recommend that you seek out advice from our Contracts Team, your bank or your accountant.
What is a Mortgage?
A mortgage is a long-term loan that you can take out to buy property or land. Over the course of the mortgage, the borrower will make regular monthly repayments. Until the mortgage is repaid in full, the loan will be ‘secured’ against the value of your home. In other words, if you are unable to keep up your repayments the lender can repossess the property and sell it in order to get their money back.
Mortgage Providers in Ireland
You can apply for a mortgage directly from a bank or building society. Currently, there are ten mortgage lenders in Ireland. To compare the various offerings available on the market, you can engage the services of a qualified independent financial advisor or mortgage broker.
Working Out Your Budget
Before starting the application process for a mortgage, you will need to calculate your budget. To do this you will need to factor in how much of a deposit you can afford and your repayment capacity. Online mortgage calculators are a useful tool when trying to work out how much you can realistically afford.
Deposit
When you purchase a house, you will need to pay a deposit. This is a percentage of the purchase price in cash. Typically, first-time buyers will need to shell out 10% in cash whereas second-time buyers will usually need to pay around the 20% mark.
Repayment Capacity
The Irish Central Bank stipulates that borrowers cannot receive more than 3.5 times their annual salary (or a joint salary for couples). Banks have some wiggle-room here and a skilled mortgage broker may be able to help you raise the threshold.
The Application Process
During the mortgage application process, you will need to provide evidence that you are a trustworthy person with sensible financial habits. They want to see that you can afford to take on the mortgage while also still having money left over each month. This will demonstrate to the mortgage lender that you are a good qualified risk.
The mortgage lender will assess your application on various criteria. Whether you’re a contractor or a PAYE employee, you will need to meet some standard benchmarks. These include:
- Your ability to pay the deposit
- Your repayment capacity
- A clean credit history
While assessing your case, many lenders will seek information about your income, employment, living costs and existing loan repayments. As such you will be asked to supply supporting documentation (e.g. a paper-trail of prior loans, rent payments, or built-up savings).
Contractors will be expected to produce certain documentation to prove the sustainability of their income. These typically include your:
- Financial accounts
- Business bank statements
- Revenue Notices of Assessment (Tax Returns)
- Tax Clearance confirmation
If you are employing the services of a tax accountant that specialises in working with contractors, they will be able to help you to assemble and prepare these documents.
5 Tips for Contractors Applying for Mortgages
- If you have hired a specialist tax accountant, ask them to help you prepare your application. They will be able to supply you with much of the necessary documentation and provide you with helpful advice.
- If you intend to hire a financial advisor or a mortgage broker, find one who has experience working with contractors.
- Try to avoid long gaps between contracts. Maintaining a consistent work history for at least two to three years is key to showing the sustainability of your income.
- Aim to build up additional savings on top of your deposit to compensate for your salary in quieter months.
- Keep your personal finances in good order. For example, try to avoid bouncing direct debits or dipping into your overdraft. To give yourself the best odds of securing a mortgage, you will need to demonstrate an ability to save and pay bills on time.
Have a Question about Contractor Mortgages? Watch Our Webinar!
In 2020, Berkley Recruitment hosted a series of webinars entitled, “A Contractor’s Guide to Personal Finance.” This two-part series aimed to address common questions that contractors have about personal finance matters. Our first webinar focused on the subject of Mortgages and Buying a Home. Featured panellists included Margaret Barrett, a Mortgage Origination Manager at Bank of Ireland, and conveyancing solicitor David Sweeney. Watch the video above for expert advice tailored to the needs of contractors looking to purchase property in Ireland. You can read the full transcript here.
What are the keys to contracting success? In this article, we look at some of the top soft skills and qualities that will help you to find success as a contractor.
1. A Curious Mindset
In each job, you will encounter new projects, tools, technologies and management styles. If you have a curious mindset, you will enjoy the novelty that each new role offers and relish the chance to throw yourself into the challenge of learning something new. Your curiosity and openness will be major assets as you advance through your contracting career.
2. The Ability to Self-Promote
“All of us need to understand the importance of branding. We are CEOs of our own companies: Me Inc. To be in business today, our most important job is to be head marketer for the brand called You.”
– Tom Peters, Fast Company (Click to Tweet!)
As a contractor, you always need to be thinking about your next job. Having a positive reputation and a strong personal brand can make the job-seeking process much easier. In the crowded marketplace of 2020, you can no longer simply let the quality of your work speak for itself. Today’s contractors need to be able to promote themselves – whether it’s through attending networking events, building up a profile on social media or, ideally, a mix of both. Self-promotion activities will enable you to develop a personal brand that promises potential clients a high level of quality, competency, and reliability.
3. The Ability to Work on a Deadline
Organisations often hire contractors on a project basis for a fixed period for which they stipulate a deadline. Not only can a missed deadline be damaging at an organisational level, but they can also hurt your career prospects – especially if it happens more than once. Contractors need to develop excellent time-management skills, organisation skills and self-discipline.
4. Continuous Self-Development
Organisations often hire contractors because of their specialist expertise. Building an advanced knowledge of your field will help you stand out from the competition and even enable you to charge a higher rate of pay. To learn more about average contracting rates in your field, download Berkley’s 2022 Contracting Rate Report today. In order to remain attractive to employers throughout your career, you will need to continuously upskill as new tools, trends and technologies emerge.
Fortunately, a lot of this upskilling will occur on the job as you gain more and more exposure to different organisations. However, it is also a good idea to bolster your credentials with accredited certifications.
5. Strong Interpersonal Skills
Throughout your career, you will work in many different organisations. It will be important to build positive relationships with your co-workers. As such, good communication skills are key and a friendly personality can be a major help.
Befriending your colleagues will make your work life easier and more enjoyable. What’s more, these connections may also prove to be valuable to you down the line as your current co-workers may become managers one day.
Interested in Contracting?
If you are curious about making the leap from permanent employment to contract work, speak to Berkley’s dedicated contracts team today. They can advise you on current opportunities on the market and help you find the perfect contract role. They will also put you in touch with top contracts accountants to ensure a smooth and successful transition.
Switching from permanent employment to contracting is a big step, but it doesn’t have to be difficult. Read our guide below to learn more about how to make the move.
What are the Main Differences Between Permanent Employment and Contracting?
A contractor is an independent professional who signs a “contract of service” with an organisation. They are temporary workers who are typically hired on a project basis. Rather than receiving a salary, contractors invoice the client organisation for the number of hours or days worked. As they are not on the company payroll, they are responsible for ensuring all necessary taxes are paid to the Revenue Commissioners. While contractors do not receive employee benefits (e.g. holidays, sick pay), they usually take home a higher rate of pay that is inclusive of these entitlements.
Employees, on the other hand, sign a “contract of employment”. They are directly employed by the organisation on an ongoing basis. As they are on the company payroll, they receive an annual salary and the company accountant takes care of paying income tax on their behalf. As employees, they are entitled to a number of benefits such as holiday pay, sick pay, or bonuses.
Why Move from Permanent Employment to Contracting?
- Higher Take-Home Pay: Generally speaking, contractors are paid more for their work than their permanent equivalents. Contractors’ higher rate makes up for the fact that they are taken on for a shorter length of time and that they will not receive employee benefits. To discover the average market rates in your field, download Berkley’s 2022 Contracting Rates Report.
- Build A Wealth of Experience: Given the shorter length of contracts, contractors can hop between roles and organisations. This offers ample opportunity to develop professionally by upskilling and building networks. Experienced contractors with extensive experience, exposure to a wide range of organisations, and a more diverse skillset can command high rates.
- Build Your Network: As you move from contract to contract, you will have the opportunity to develop relationships across a range of different organisations. Over time, you will find that you have built up an expansive network who may then be able to help you find further contract work, or open the door to more permanent roles.
- More Flexibility: Contractors act as their own boss. This gives them more freedom and control over when and how they work. As a contractor, it’s possible to structure your working week, month and year around your lifestyle. Contracting roles are also more likely to offer flexitime and/or remote working.
Do Contractors Have Financial Stability?
Permanent employees who are considering transitioning into contracting often have doubts about financial stability. As a contractor, there will likely be times when you have gaps between projects. However, this can be mitigated if you work with a recruiter to ensure that you have a new role lined up after your current contract finishes. What’s more, developing your skillset on an ongoing basis will enable you to stay competitive.
How to Make the Switch from Permanent to Contract Work?
- Partner With A Recruiter: Chat to a recruiter who specialises in contracting roles. They will be able to give you an overview of the market and advise on your rates. Let the recruiter know what kind of work you are interested in so they can put you forward for any relevant roles that arise.
- Hire Tax Accountants: If you have been successful in your job search, the next step will be to engage the services of specialist tax accountants. They will advise you on the right limited company structure for your needs and take care of setting this up for you. This will enable you to get your contracting career off to a flying start!
- Submit Monthly Timesheets: Your client invoices will be based on the number of hours or days you work. As such, you will need to submit timesheets every month to your tax accountants. They will then take care of deducting your taxes and paying you.
- Make Plans for After Your Contract Ends: As you approach the end of your contract, you will need to make plans for afterwards. In some cases, your client may offer to extend the existing contract. Otherwise, you will need to figure out if you would like to find a new job or take a break. If you decide to find something new, notify your recruiter well in advance so they can keep an eye out for relevant roles.
What Are Your Options as a Contractor?
To get started as a contractor, you will need to set up a Limited Company structure. There are multiple set-ups to choose from; the most popular options are:
1. PAYE Umbrella Company
If you are new to contracting, this option offers an easy transition. PAYE Contracting involves working with a specialist third-party to create an Umbrella Company with which you will sign a contract of employment. The primary functions of the umbrella company are to arrange payment for your work and correctly deduct taxes. As a PAYE contractor, you are treated as an employee which means that you are still entitled to benefits like holidays and sick day allowance. However, you can also move freely between contracts.
2. Personal Limited Company (PLC) Contracting
Alternatively, you could set up a Personal Limited Company. With PLCs, the contractor enjoys greater flexibility and control over their finances. For example, you can employ staff, claim expenses, start a pension plan, and purchase company assets. PLCs are typically complex and costly to set up, however, they are a very tax-efficient solution and offers a higher rate of pay than PAYE contracting. As such, these are an ideal option if you intend to contract long-term.
Are you thinking about making a move into contracting? Take a look at our guide to discover the top benefits of being a contractor.
Higher Take-Home Pay
Contractors tend to earn higher gross pay than employees. This higher rate of pay is because contractors tend to be hired on a short-term basis and to make up for the fact that they are not entitled to employee benefits such as sick pay or annual leave. What’s more, contractors are paid for every hour or day that they work whereas employees are paid a salary.
Factors that can boost your rate of pay include:
- You have high-level skills that are hard to find
- The project needs to be completed at short notice
- The location of the contract
- The state of the industry in which you work,
- The state of the market in general
- Your level of experience
If you engage the services of a specialist tax accountancy firm, they will be able to advise you on how to further maximise your take-home pay. They can help you to make your limited company structure as tax-efficient as possible and show you how to offset your business expenses against your income.
To find out how much you could be earning as a contractor, download a copy of Berkley’s 2022 Contracting Rate Guides.
Experience & Skills Development
Whereas “job-hopping” is frowned-upon for permanent employees, it can actually enhance the employability of contractors. As most contracts are project-based they tend to be quite short in duration. This means that contractors can work for many different clients in a short period of time. This allows them to build experience quickly and gain new skills. What’s more, they will gain exposure to many different projects, management and working styles. Over time, you will find that you have built up an extensive bank of skills, experience and connections. This will boost your attractiveness to employers and allow you to increase your rates.
Freedom & Flexibility
One of the key benefits of being a contractor is that you are your own boss. The organisations you work for will be your clients rather than your employers. As such, you will enjoy more freedom and flexibility than employees. Perhaps the biggest offshoot of this is that you will have greater control over when and how you work. You can structure your working week, month and year around your lifestyle; meaning that you can take breaks for travel, further education or simply to spend more time with the people you love. Contracting roles also tend to be more likely to offer flexitime and/or remote working – giving you yet more freedom in how you organise your working life.
Avail of New Opportunities
In recent years, numerous industry pundits have highlighted contracting as a key trend in the future of work. The ongoing pandemic has only accelerated the rate with which organisations are adopting the contingent labour as they seek to increase the agility of their workforces. As contingent workforces become more common, opportunities will continue to grow. This will put experienced contractors will be at a clear advantage.
Check out our guide below to find out why contracting and contingent labour represents the future of work in Ireland and around the world.
What Is A Contingent Worker?
Contingent Workers are those who provide services to an organisation but who are not on the payroll. This is an umbrella term that encompasses many types of workers including contractors, consultants, temps and advisers. Oftentimes, these people are brought in temporarily to address a specific project need.
The State of Contingent Labour in Ireland
Contingent labour is on the rise in Ireland. According to a 2018 ESRI report, contingent employment made up just 10% of the overall active workforce in Ireland between the years of 2011 and 2013. According to one study, 45% of Irish workers can now be categorised as contingent labour.
Why is Contingent Labour the Future of Work?
Prior to 2020, contingent workforces were trending upwards with many multinationals and large tech companies (such as Google and Facebook) leading the way. Contingent workforces are becoming increasingly mainstream, sectors that wouldn’t traditionally have used this model (e.g. engineers, accountants, architects) are now exploring this as an option.
The Impact of the Covid-19 Pandemic on Contingent Labour
The ongoing pandemic has accelerated uptake of contingent workforces with more and more organisations adopting this model. Research from Gartner has found that 32% of organisations are replacing full-time employees with contingent workers. So why is this?
In times of crisis, organisations need to be agile in order to weather the storm. Contingent workforce models can be easily scaled up or down. This gives organisations the flexibility they need in order to dynamically adapt to changing market conditions.
Cost savings have long been a key driver for companies adopting contingent models, and with the ongoing pandemic this has taken on even greater importance. Contingent models help to decrease costs by reducing the costs of hiring, payroll, and the management of employees. Download a copy of Berkley’s 2022 Contracting Rate Guides to benchmark rates today.
What are the Benefits of Growing Contingent Work for Candidates?
As our previous article about the benefits of contracting outlines, there are many reasons why workers may want to look into contingent work.
- These days, workers are no longer seeking a job for life. Contingent work offers greater mobility to move between a variety of jobs, projects and organisations.
- Contingent work gives candidates more control over when and how they work. This gives them greater freedom to take breaks if they want to travel, study or spend time with loved ones.
- As an increasing number of organisations implement contingent models, job opportunities for contingent workers will continue to grow.
- The mobile nature of contingent work means that contingent workers can quickly develop new skills.