There are two main ways to work as a contractor, directly with a client or through an agency.
They both have their pros and cons, which we’ll lay out so you can make a decision.
Finding contractor work through an agency
Finding contractor work through an agency can make things easy.
You just give them a copy of your CV, and they’ll notify you of job openings, negotiate rates for you, settle contract terms, and connect you with clients.
Another big positive is that an agency can act as a safety net for late payments by clients.
Since it’s the agency that will pay you, you won’t be affected if the client pays late, or not at all.
What’s not so great is that you’ll likely earn less money through an agency than if you negotiated directly with the client, since the client has to pay the agency a fee, often up to 20% of the cost.
However, you might be happy with this when you consider that doing your own negotiations will take more time and effort.
Finding contractor work with a client directly
You’ll have to do more work to find work directly with clients.
You’ll have to spend time marketing your services and building relationships.
You’ll also have to consider the risk of a client paying you late, or even refusing to pay you at all.
But the flipside to all of this extra work and stress is that with no agency fees, you’ll see more of the money after successful negotiations.
Working directly with clients also gives you the opportunity to build closer and longer-lasting relationships with them, meaning you’ll get more contractor work with them.
Which is the best option: direct or through an agency?
There are two sides to both options, so you’ll have to weigh them up yourself to decide which the right one for you is.
However, it might be interesting to know that most contractors choose to find work through an agency rather than having to find clients and negotiate directly with them.
Why not both?
As a contractor, it’s likely you’ll find work through both options.
An agency might make it easier to get a steady source of work and income early in your career, but you’ll naturally develop close relationships with clients as you work with them more and more.
As you gain experience as a contractor, and as you meet more and more people in the industry, you might feel that switching to exclusively working directly with clients is the way to go.
However, you do need to take into consideration that many agencies include a clause that stops you from working directly with any client that the agency introduces you to for about 6 months after.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.