Understanding Contract Work: the Myths and Truths

Understanding Contract Work: the Myths and Truths
September 13, 2020 Ian Richardson

Working contract in construction – it’s a topic we’ve discussed before.

But while the industry navigates a job short market, brought on by COVID and uncertainty in builder’s workload, it seems like a good time to rehash it.

Previous experience has shown us, in periods like the one we’re experiencing, it’s common for builders to step up their engagement with contract staff to help them deliver projects.

We’ve seen it before post-GFC and in other dips in the economy.

Despite this, there’s still a lot of hesitation and misconceptions among construction professionals about taking on contract roles and the negative impact it may have on their future employability.

Some of these I’ve covered below.


“Contract work will be damaging on my resume.”

My response to that – it’s not unusual, it’s not out of the ordinary, and it won’t work against you.

With construction being a project led industry (the perfect structure for using contract staff), it’s amazing to me that this misconception even exists. It’s stemmed from old school thinking in construction when there was less contract work seen, so builders were more critical of it on a job seeker’s resume.

But this is not an attitude we see much of in builders anymore.

In my experience, working with employees who are carrying out contracts, it quite often leads them to permanent work because they use it as an opportunity to get their foot in the door and show the company how they perform.

Naturally, if you perform well and they win new work, they’re going to look at you before taking on someone external to the company.


“I have to be a company (PTY LTD) setup to be engaged as a contract employee.”

If you go directly to the builder, then in some cases yes you will need to be set up as a company.

However, if you go through a third party like a recruitment agency, you don’t.

We can contract you as a normal employee whose seconded out to another company (and take care of your super and workers comp for you) or we can contract you out as a PTY LTD – it’s completely up to you.

One thing that you will need to make sure you’re on top off is specifying your rates. Break down your usual annual salary into a weekly and hourly rate and then make sure you remove your annual leave for the year from it.

This is important – I’ve worked with a lot of people who don’t do their due diligence in this step and end up kicking themselves later.


“I’ll miss out on permanent opportunities if I’m working on a contract.”

I hear this all the time when talking to candidates about contract opportunities, but it’s far from the truth.

If you’re working with a recruiter to find a role, your contract role CAN AND WILL be managed in unison with finding you permanent employment.

If you’re managing your job hunt on your own, you can still look for something permanent while you carry the contract out. But you will need to be clear with all parties about your intentions. It will also require an active approach on your part (you’ll likely have to give up some of your nights and weekends to apply for jobs).


Before I wrap up, another important thing to note is that being in between jobs can be emotionally and financially draining.

A contract opportunity can help to alleviate that financial pressure and keep you engaged in the construction community while you’re looking for something more permanent. Helping you to build on your professional network and keep your mind and body active.

So, before you knock it, consider this information.

And if you’d like to discuss any contract work with me further please don’t hesitate to get in contact – ian@constructionpeople.com.au.

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