Contracting in NZ: Direct or Through an Agency?
Jan 31, 2023
Introduction
Contracting is becoming a popular career option for IT professionals because of the flexibility it offers.
There are several ways to work as a contractor: 1) directly with a client and 2) via a recruitment agency.
But what’s the difference, and what’s better for you?
If you are new to contracting, you may need the help of an agency. Recruiters will refer job openings from their partner companies and connect you with clients. They will also do all the pre-employment work for you.
Meanwhile, working with a client requires you to do everything - job sourcing, negotiating, and networking. This is time-consuming and means more work and responsibility for you.
How difficult is it get an IT job in New Zealand?
It can be complicated to find a job in the IT sector in New Zealand, especially for those who are new to the field.
While people look for a long-term career, many IT professionals find success in contracting. This will enable you to gain experience and expand your professional network.
In NZ, there is a great demand for specialists in some IT fields i.e. cybersecurity, data analysis, software development, and other technology disciplines and skillsets.
However, since there may be intense competition for these positions, it's critical to have a wide network and a good CV to ensure you stand out.
Contracting for beginners
If you are new to contracting, start by looking for recruitment agencies and connect with recruiters and hiring managers.
Recruit I.T. is an example of a top recruitment agency in NZ. We connect exceptional candidates from all over the world with potential employers, particularly in the tech sector.
An agency takes care of everything for you. Recruit I.T., for example, takes care of a candidate’s contract – from reviewing, negotiating, and the onboarding process with the client.
With the help of an agency, you can seamlessly transition from a permanent to a contract role, making it a good method to enter contracting for beginners.
Less work and stress on your end as you wait for your starting date.
Contracting for more experienced candidates
For more experienced candidates, working directly with a client might be a more feasible option, however, if you prefer a hassle-free contracting experience, partnering with a recruitment agency is still the best way to do it.
How to find work as a contractor in New Zealand
It can be difficult to find a contract role in NZ, but there are ways to improve your chances:
- Networking: Connect with other people in your field. Participate in industry gatherings, sign up for trade organisations, and ask other contractors if they are aware of any upcoming job openings.
- Online job boards: Short-term and long-term contracts are frequently available at these sites. Seek and Trade Me are two well-known job boards and Recruit I.T advertise job vacancies from its clients on many of these. You can also visit Recruit I.T.’s job board here.
- Recruitment agencies: Agencies like Recruit I.T. are an excellent place to start. These organisations can give you options and assist in matching you with clients.
- Social media: Utilise sites like LinkedIn and Twitter to uncover contract possibilities.
- Referral: A friend or coworker's recommendation is a wonderful approach to finding a contract job. Enquire if they are aware of any opportunities if you know someone who works in the same field.
Benefits of contracting with an agency
- Recruitment agencies can negotiate a good rate for you. Most people shift from permanent to a contract role to earn more money and contracting under an agency can help you negotiate your desired rate.
- Agencies can ensure you’re getting paid on time and will help you to find your next contract assignment before your contract ends. They serve as an intermediary or a buffer between you and the client. They also handle all pre-employment and processes. Some agencies even help you land a new contracting assignment before your contract expires.
- Contracting with an agency can help you build your network. An agency can keep you in a pool of candidates and refer you to their partner companies in the future.
Contracting via Recruit I.T.
- Recruit I.T. will act as your advocate for the client.
- Our dedicated consultants are constantly looking for suitable opportunities for our contractors, as our goal is to ensure you have continuity of contract work, whether this be with your existing contract, or our wider customer base.
- You will often receive payment earlier than going direct.
- Recruit I.T. is BTCI (Buyer Tax Created Invoice) approved by the Inland Revenue Department. This means we provide you with an invoice without you needing to create one.
- Discounted PI & PL Insurance
- Cloud-based timesheets & payslips
If you would like to know more about contracting opportunities, visit our Job board.
Alternatively, if you would like to speak to one of our consultants to understand the market and demand for contracting in your chosen skillset, then feel free to get in touch with Our Team.
Entering the job market after many years can be a daunting task, especially in the fast-paced world of IT and Technology. With advancements happening at breakneck speed, it is understandable to feel overwhelmed when suddenly thrown into starting your job search journey anew. However, there are simple steps you can take to get you started, ease the transition, and help you in landing your new dream job. At Recruit I.T., we've seen many experienced candidates successfully navigate this path, and we're here to share some valuable advice with you. 1. Revamp Your CV Your CV is your ticket to securing interviews, so it is crucial to ensure it’s up-to-date and tailored to the roles you are applying for. If yours is still in typewritten format and doesn’t include what you’ve been up to for the last 10 years, now is the time to get it updated. Ensure it includes your most recent and relevant roles, delete your high school work experience, and highlight your relevant experience, skills, and achievements prominently, focusing on how they align with the requirements of the positions you're targeting. If you are unsure where to start, collaborating with a specialised recruiter like Recruit I.T. can provide valuable insights and guidance in crafting a compelling resume. 2. Leverage Your Network Don't underestimate the power of networking, especially in the tight-knit IT and Technology community in New Zealand. Reach out to former colleagues, mentors, clients, and industry connections to let them know you're actively seeking opportunities. Attend industry events, meetups, and conferences to expand your network further. Many job opportunities are filled through referrals, so make sure to stay connected and keep your network informed about your job search. 3. Explore Both General and Specialised Job Boards You may have found your first job via a newspaper classified, but times have changed! While general online job boards like Seek and Trade Me, as well as LinkedIn Jobs are a good starting point, consider exploring specialised job boards focused specifically on IT and Technology roles, and register with a relevant recruitment agency like Recruit I.T. as specialised platforms like our website job board cater to this niche market, offering a curated selection of job openings tailored to your expertise. By targeting your search on these platforms, you increase your chances of finding roles that align with your skills and career goals. 4. Prepare for Interviews Brush up on your interview skills to ensure you make a strong impression during the selection process. Research the company and the role thoroughly, familiarising yourself with STAR and behavioural-based interview techniques (there is lots of info online!), practising common interview questions, and preparing examples that highlight your abilities and experiences. Additionally, familiarise yourself with the latest industry trends and developments to demonstrate your awareness and relevance in the field. It also won’t hurt to review and brush up on your verbal and numerical reasoning skills – once again, there are lots of free resources online to help you practise these types of tests/exercises. 5. Update Your Skills The IT and Technology landscape evolves rapidly, with new technologies and methodologies emerging regularly. Whilst you’ve developed your abilities on the job, do take the time to update your skills and knowledge with formal certifications and training to remain competitive in the market. Consider enrolling in courses, attending workshops, or pursuing certifications relevant to your field. Not only does this demonstrate your commitment to growth, but it also enhances your attractiveness to potential employers. 6. Be Flexible and Open-Minded The job market can be unpredictable, so it's essential to remain flexible and open-minded throughout your job search. Be willing to consider different roles, industries, or a short-term contract opportunity that may not align precisely with your previous experience. Embrace new challenges and opportunities for growth, as they can lead to unexpected career advancements and personal fulfilment. 7. Seek Guidance from Experts Navigating the job market alone can be overwhelming, especially after being out of the game for some time. In many cases, if your position has been made redundant, your organisation may provide outplacement services to offer help with CV crafting, interview prep, job search, practise testing and in some instances will also provide free access to training platforms. Consider seeking guidance from experienced specialised recruiters like our Recruit I.T. consultants. Our team possesses in-depth knowledge of the IT and Technology industries, along with extensive networks and resources to support your job search journey. From resume optimisation to interview preparation, we can provide valuable assistance every step of the way. Utilise all the free and skilled help you can access! 8. Embrace Your Experience and Life Skills It's easy to feel apprehensive about re-entering the job market after a long tenure with a single company or a prolonged absence, but remember to embrace the wealth of experience and life skills you've accumulated over the years. Your past successes, whether in your career or personal life, have equipped you with valuable insights, problem-solving abilities, and resilience that will be sought-after and appreciated by employers. While you may not have a recent job application or job hunt history, your track-record speaks volumes about your capabilities and adaptability. Have confidence in your abilities, and don't underestimate the value you bring to the table. Highlight your accomplishments and transferable skills during interviews, showcasing how they make you an asset to any organisation. By owning your experience and life skills, you can instill trust and credibility in potential employers, setting yourself apart from other candidates in the competitive job market. Embarking on a job search journey after many years can be a challenging yet rewarding experience. By revamping your resume, leveraging your network, exploring job boards, preparing for interviews, updating your skills, remaining flexible, seeking guidance from experts, and remaining confident in your experience and skills, you can increase your chances of success in the competitive New Zealand job market. Remember, you are not alone in this journey, and with the right support and resources, you will find your next opportunity. Our team are always happy to shout the coffee and provide some expert friendly and constructive advice to help you get started on your job hunt, so reach out anytime!
Field at Present: From a Director’s Perspective Generally, we have seen a slow start to the year, continuing the trend we saw in the latter half of 2023. Despite feedback from the market that suggested a stronger bounce back, we have yet to see this in the market at present. There are pockets of activity - primarily back-fills to existing hires. As we gear towards the backend of the government’s 100-day plan, we should see the firming up of new projects and programmes, which will likely require capability to deliver these pieces of work. Unfortunately, we are still seeing organisations across a range of industries forced into making rounds of redundancies and other operational cuts or changes to help them operate more leanly during challenging times, and we’ve even seen this in the recruitment industry itself.
With the dynamic business landscape, many companies are embracing flexibility and adaptability as they navigate the ever-changing market. As someone who has worked in the technology and recruitment sector for a while, I’ve come across a common misconception that I’d like to address: the perception that contractors are significantly more expensive than permanent employees. I'd like to give light to the true cost of hiring a contractor and explore why it might be more budget-friendly than you think. Let’s start by acknowledging the elephant in the room – the hourly rate. It’s no secret that contractors often come with an hourly rate that seems higher than what you’d pay a permanent employee. But here’s the thing: an employee salary is just the tip of the iceberg. When you hire an employee, there’s a whole set of additional costs and overheads that can significantly impact on your bottom line. Let’s break them down: 1. ACC (Accident Compensation Corporation) When you employ a permanent employee, you’re obliged to contribute to ACC levies. These can add up and represent a substantial ongoing cost to your business. Contractors, on the other hand, handle their own ACC payments, freeing you from this financial burden. As I write this it sits at approx. $0.63 per $100 of payroll. Example being, a $100K Salary = $630 per annum. 2. Kiwisaver Permanent employees are entitled to Kiwisaver contributions from their employers. While it’s a great benefit for them, it’s an added cost for your business. Contractors manage their own retirement savings, releasing you from this expense. At the minimum contribution of 3% that is $3,000 based on a salary of $100,000 per annum. 3. Training and Development Investing in the professional growth of your employees is essential. However, it can be costly and time-consuming. Contractors typically bring their existing skills and experience to the table, minimising the need for extensive initial training and ongoing development programs. Various benchmarks have this between 1% - 5% of an individual’s salary. Based on a $100,000 per annum this could be between $1,000 - $5,000 per annum. 4. Fringe Benefit Tax Providing certain benefits to your employees can trigger fringe benefit tax liabilities. Contractors are not subject to this tax, which means you can offer perks without worrying about additional financial implications. 5. Benefits Permanent employees often receive benefits such as health insurance, paid annual leave, and more. While these are important for staff retention, they can substantially increase your personnel expenses. On the other hand, contractors manage their own benefits and extras, giving you more predictability in your budget. 6. Insurance A business is responsible for looking after professional indemnity and public liability insurance which cover their permanent employees. On the flip side, contractors typically have their own insurance coverage, reducing your insurance-related costs. 7. Overheads Beyond the salary, permanent employees come with a host of overheads like office space, equipment, and administrative support. Contractors usually operate independently, sparing you from these additional expenses. 8. Productivity It is not as simple as multiplying a contractor’s rate by the number of hours in a week, and then extrapolating that out for the year. They only get paid for the hours they work, which doesn’t include any annual leave, sick leave, or public holidays. You only pay them based on what the hours they actually worked. So, what’s the bottom line? Hiring contractors can be a cost-effective choice when you consider the bigger picture. While the hourly rate may seem higher, it’s essential to factor in the myriad of savings associated with not having to manage all the costs and overheads that come with permanent employees. Don’t get me wrong – permanent employees are valuable assets to any organisation. They bring stability, commitment, IP retention, and a sense of belonging to your team. But the key is understanding the differences between contractors and permanent employees and leveraging them to your advantage. Think of hiring contractors as a strategic move that provides the flexibility to scale your workforce up or down as needed, without long-term financial commitments. It’s not about one being better than the other; it’s about making informed choices that align with your business objectives. So, the next time you consider bringing in a contractor, remember the true cost isn’t just about the hourly rate- it’s about the holistic value they bring to your organisation.