With the rise of flexible working and the gig economy, the world of work is changing and there are more choices than ever available to you after university. Many are saying goodbye to the traditional 9-5 ‘job for life’ and instead are embracing being self-employed and setting their own WorkStyle.
However, the promise of training and a high salary means that Graduate Schemes are still a popular choice for graduates. If you’re the entrepreneurial sort, it’s likely that you’re torn between this more traditional post-university route or the freedom that a contracting career can provide.
Both routes provide great career prospects, but it’s important that you choose which route is best for you. We’ve taken a look at the positives of both routes to help make your decision a little easier.
What is contracting?
Contracting means that you work under a contract of employment to perform a particular service or job rather than being a permanent employee. For example, a contractor may work on a six month contract at a business to complete a particular task, before then moving on to another contract at a different business or have several contracts running in parallel at the same time.
What is a graduate scheme?
Just as it sounds, a graduate scheme is a structured employment scheme aimed at new or recent graduates. Graduate schemes aim to provide not only full time employment but also training for graduates for up to three years. Graduate schemes mostly take place at a particular company and there is often the potential of a full-time, permanent role at the company once the scheme is complete.
Contracting vs. Graduate Schemes: Similarities and Differences
|Tax efficient salary||No||Yes|
|Be your own boss||No||Yes|
|Variety of experiences||Yes||Yes|
|Training and tuition||Yes||Yes|
Graduate scheme salaries are typically high with benefits to match. That being said, those on graduate schemes aren’t able to make the most of the tax-efficient benefits that contractors who work as a limited company are. Also, as a contractor, you can set your own pay rate, whereas on a graduate scheme the salary is likely to be pre-decided.
In addition, there are a limited number of graduate vacancies available for 2017; with only 20,000 graduate vacancies available at the Times Top 100 Graduate Employers for 440,000 potential graduates.
Flexibility and being your own boss
For entrepreneurial graduates and students, one of the biggest advantages of contracting as a limited company director is the fact that you’ll be your own boss.
You can be as flexible as your current contract allows which may mean you will be able to work from home, a coffee shop or even on the beach at whatever times suit you. In comparison, whilst many graduate schemes do involve a bit of travel; particularly at large organisations, it’s likely that you’ll need to be in the office at a certain time each day.
A variety of experiences
Both graduate schemes and contracting should provide you with a variety of experiences. Many graduate schemes will involve working in different departments across the organisation, so you may get to spend time in finance, marketing, IT, sales and other departments present in the organisation. In comparison, a contracting career can be as varied as you’d like it to be; whether you want to specialise in providing a certain service for a certain sector or you’d prefer to utilise a wide variety of skills for various sectors, it’s entirely up to you.
Training and career development
It goes without saying that the training and experience involved in a graduate scheme can give you a great career boost early on, but that doesn’t mean to say you’re completely on your own as a contractor. If you take part in any training or tuition as a contractor to develop your career, it can be claimed as a legitimate company business expense.
How can ClearSky help you as a graduate?
Our team of expert accountants have helped thousands of contractors at different levels of their careers. If you decide that going limited is the path for you after university you can rest assured that you’ll be in good hands with ClearSky Contractor Accounting.
When it comes to setting up a limited company and maximising your income, ClearSky are with you all the way.
For more helpful guides on contracting as a graduate, visit our graduate hub.