Contracting provides workers with the chance to set their own pay rates and to work flexibly, but is one factor more important than the other?
The ability to work flexibly and the opportunity to set their own pay rates are two of the key factors behind why people choose to work for themselves as limited company contractors or freelancers. Both of them are major perks of self-employment, but when it comes down to it, which is the most important of all?
In a piece for smallbusiness.co.uk, Adrian Lewis of Activ Absence presented his analysis of various reports into the appeal of flexible working and the importance of pay, finding that both are important to UK workers for different reasons. However, his findings suggest that contracting allows people to achieve the best of both - as long as they are prepared to work hard and consider exactly what would make their ideal work-life balance.
The argument for flexible working
Mr Lewis stated: "Flexible working cuts commuting time, reduces emissions and keeps people of all ages happy, motivated and more productive."
And according to research carried out by HSBC, workers are more motivated by the opportunity to work flexibly on their own terms than by taking home a higher level of pay. Overall, 89 per cent of respondents to a survey conducted by the bank said that being able to work from home significantly boosted their motivation. In contrast, 77 per cent revealed that a higher pay rate would motivate them more.
Mr Lewis also looked into a report entitled A Talent Imperative, published by EY Flexible Working and Timewise, which found that almost two-thirds (63 per cent) of UK workers now operate on a flexible basis, demonstrating just how high demand for working in this way really is.
What's more, the report also showed that nearly three-quarters (73 per cent) of 18 to 34-year-olds working full-time do so on a flexible basis, while 69 per cent of people who do not work flexibly at present would like to do so in the future.
It's clear that the desire to work on a more flexible basis is huge among the current generation of workers and it's certainly high up on the priority lists of many.
But what about pay? Is it worth a person being able to work wherever and whenever suits them if they aren't being well-remunerated?
On the side of pay
Of course not - pay is important and the chance to determine their own pay rates is what attracts many workers to contracting in the first place. And as the HSBC research showed, 77 per cent of workers view pay as the most important factor attached to a specific role.
Ultimately though, pay is more an essential factor of a job than flexible working, which is more of a 'nice to have'. But this makes the opportunity to determine pay rates for yourself no less special.
Contracting: The best of both
With the above in mind, working as a personal service company contractor or freelancer really can provide workers with the best of both. Being able to set their own pay rates and determine what they are worth can make individuals feel more like they are being paid what they deserve.
At the same time, choosing their own working hours, location and deciding for themselves when they need time off can make workers feel like they are reaping more benefits of contracting over the long term, allowing them to create their own career with their own rules.