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Essential Guide to Project Management Contracting

Could Project Management Contracting be for me?

The thoughts often start when you’ve been working alongside other contractors for a while. You might think:

‘They’re only doing what I’ve been doing for years. Yet they’re getting paid a lot more for it’.

Or it might be thoughts about being on the treadmill of corporate life. You know you only have so many years left and you’d really like to go it alone before it’s too late.

Or perhaps you’ve been through redundancy rather than wilfully jumping headlong into an exciting new adventure.

This article is brought to you be Project Management recruiter, Lindsay Scott. Lindsay is co-founder of Arras People.

Project Management Contracting has become a Popular Career Move

Project Management ContractingWhatever the reasons, contracting has become a popular career move for many project practitioners and one that just seems to make sense. Projects are temporary; so too are contracts.

Five Vital Pieces of Advice

In this article we take a look at the contracting industry for project practitioners. And you’ll get five different lines of essential advice to consider, before you make a career change. All these pieces of advice come from years of working with successful project management contractors through Arras People. So hopefully they will help you make a successful transition too.

Be Really Prepared

Of course you’re going to be prepared. You’re a project practitioner!

On the one hand this is going to be the biggest career decision you’ll ever make. Working for yourself can be both exhilarating and ‘waking up at 3 in the morning’ scary. On the other, you’re going to give it lots of thought and make plans. So it will start to feel like an easier decision to make.

A close friend of mine took nearly two years between thinking about going it alone and actually doing it. That two years included a lot of:

  • confidence building,
  • thinking about finances (‘what if I can’t pay the mortgage?’),
  • understanding what they really had to offer the marketplace,
  • getting more and more fed up with the day job,
  • having a plan B,
  • talking to lots of people and getting their views,
  • taking up some training,
  • building a six month nest egg, and
  • a LOT of procrastination before finally going for it.

Don’t underestimate the time you might need, to feel comfortable you’re making the right decision. You’ll know when you are ready to finally push the button and do it.

Preparation for Project Management Contracting

Here are some other things that might help you in the preparation stages, before deciding to move into Project Management Contracting:

  • Pull together your portfolio
    This is everything you have that demonstrates what you have to offer as a project practitioner:
    CV, profile, accreditations, examples or case studies of work, assessments…
  • Create your own decision making matrix
    There are plenty of examples on the web. And then share it with others who are important in your life, and who will feel the affects of your decisions.
  • Talk to those that have already done it
    Pull together a simple list of questions you’d like insights on, and ask away.

Round Pegs and Round Holes

Project Management Contractors are one avenue for organisations to consider when they need a temporary workforce. And for them, it is all about round pegs in round holes. Organisations are looking for skilled and experienced resources to fill the gaps in their resourcing plans.

That means they’re looking for practitioners that are already experienced in project management; the types of projects being delivered, and the industry sector the projects are being delivered in.

It doesn’t matter to them that you’re looking for new experiences away from an industry you’ve been working in for years. All they see is that you have the right kind of background now that they’re looking for. Because they don’t want to risk bringing in someone who doesn’t ‘get’ what they do and how they do it.

The same goes for the accreditation or ‘badges’. They don’t care that you have twenty years’ experience but they do care that they can see the accreditation or certifications that prove you know what you’re doing. (OK, tongue-in-cheek but you get the picture).

An organisation hires on prior experience that matches their current resource gap. So all you need to do is make sure that you clearly articulate your prior experience in both your CV and everything you say and do.

Preparation for Project Management Contracting

Some things to think about:

  • The people who read your CV will differ
    Some might be HR administrators; others might be line managers or subject matter experts.
    Bear this audience in mind when writing your CV. It has to work for each one of them.
  • Make sure you include your project management competencies in your CV
    Don’t just include details about the projects you have managed. Hirers want to see both.
  • Make sure your last ten years’ experience on your CV is clear and fairly detailed.
    Anything before that can be just a few lines each.

Become the Business Development Guy

Always wanted to be your own boss? When you’re first starting out as a Project Management Contractor, that also means being the:

  • financial controller,
  • managing director,
  • legal department,
  • marketing manager,
  • facilities director,

and of course…

  • the sales department!

If sales or business development is something you’ve never thought about or had chance to have a go at…  Now is the time to figure out whether you like it or not. It’s the most important role you’ll play.

A big mistake many contractors make is thinking that they will be 100% focused on delivery. That’s working on a contract, five days a week, for months at a time.

Wrong!

But you’re running a business – not just a contract. You need to make time to develop that business too, making it easier to find new work in the future. So you need to carry on building and expanding your network. Your network is where the majority of your work will come from in the future – not just job boards and agencies.

You’ll also have to become savvy at managing your time to ensure that your finances are near the top of your priority list. It’s interesting* just how many project management contractors get behind on invoicing. Remember keep that cash flowing. Because cash flow is one of the biggest reasons why new businesses fail. Profit? Meh! It’s when they don’t keep on top of the cash flow.

* ‘It’s interesting’, Lindsay (says Mike). I’ll take that as typical British understatement.

Preparation for Project Management Contracting

Some other things to think about:

  • Consider having a cheap website
    Something built using WordPress works well. It needs to cover the basics of what you offer.
    Also consider writing a blog piece once a month and sharing that on your Linkedin profile
    Keep your profile out there whilst you’re in contract.
  • Make sure you have business cards done in the same branding too
    They’re still the best way to promote yourself whilst you’re out and about.
    A good tip is to include the basics of what you offer on the back.

Finding Your Day Rate

When you’re first starting out in contracting, it’s one of the most common questions you’ll ask:

‘How much am I actually worth?’

One of the easier ways to start is by looking at the types of project management contracts that are on offer that are similar to what you do and start working from that point.

Rule of Thumb

It’s often been said that there is a simple contracting rate rule of thumb.

  • Take your current salary in thousands, say $60k
  • Add a zero to get the day rate, that is, $600/day

You should also work backwards to get your minimum ‘get-out-of-bed’ rate.

With Project Management Contracting in the UK, you should be looking to work within a range, say £550 to £650 per day. This can be as simple as ‘within the current market rate for the type of contract I’m interested in, what is the least I’m prepared to work for’.

Remember that your day rate should also take into account that you have to cover:

  • taxes,
  • training,
  • holidays,
  • equipment,
  • accountants, and
  • days (or even months) between contracts.

Preparation for Project Management Contracting

Some other things for you to think about:

  • Take the advice of the people who work in your field
    Ask recruitment agents what they think you’re worth.
  • For some people it helps to physically put aside funds from each paid invoice for training and holidays
    It’s also worth remembering that holidays end up costing you twice as much. Because now you are not on a salary, if you’ve not working, you’re not earning.

Attributes of a Good Project Management Contractor

Over the years of working with project management contractors, I can’t help but think about some of the attributes of some of the better ones I’ve worked with.

Let’s take a look at a profile of an experienced and successful PM contractor; what follows are the main attributes that I consider to be the most important when hiring a contractor.

Project Management Skills

First of all, you need the ability to manage projects at the level required by the client. The successful contractor is fit for purpose from day one. Organisations have no interest in training and development when it comes to a contractor.

Domain/Sector Knowledge

An organisation may not have access to specialized knowledge and experience in-house. Indeed, nor will they need to retain this long-term. Hence contractors have the opportunity to secure a premium rate because they have the experience to fill that gap.

Self-confidence

The ability to enter a new organisation and make an impact straightaway. Hitting the ground running takes self-confidence and belief. And it will test all those soft skills that you have accumulated along the way.

Gravitas

The ability to take control of the new team, influence stakeholders, and work with the sponsor. All these crucial elements of Project Management need to happen fast. You don’t have the luxury of time.

If you want to work on your Gravitas, we recommend a short video training package by OnlinePMCourses founder, Mike Clayton: How to Develop Gravitas.

Enthusiasm

If you can’t get enthusiastic about the challenge that lies ahead, how do you expect others to? Whatever the project, it is crucial to buy into it and believe that you and your team are going to deliver the outcome your client needs.

An Eye on the Marketplace

If you’re working in a particular industry or on particular types of projects, it pays to know when a market might be turning. A recent example was the layoff of hundreds of contractors from some of the biggest banks in the City. This meant the market was flooded with banking project managers. If you had seen that coming just a few weeks before, you could have made the move earlier.

Conclusions

There are lots to think about when making any kind of change in your career. But when you are considering a move to Project Management Contracting, there are a few additional dimensions that come into play.

Two Essential Pieces of Advice

If you would only let me give you two pieces of advice, here they are.

Number 1: Do the groundwork and really think about and prepare for the change

Move to PM Contracting: Do the groundwork. Think about & prepare for the change. Click To Tweet

Number 2: Really work your network. Most people’s first contract comes from someone they know.

Move to PM Contracting: Work your network. Most 1st contracts come fr someone you know. Click To Tweet

 

About the Author Lindsay Scott

Lindsay Scott is Director of Arras People, the programme and project management recruitment specialists. Lindsay is the project management careers columnist for PMI's Network magazine and co-editor of the Gower Handbook of People in Project Management. Lindsay recently created and hosted The PMO Conference and hosts the monthly PMO Flashmob

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