The information technology field in recent years has seen a tremendous
growth in the use of contractors to undertake work for organisations -
particularly in the project management and applications development
sectors, but also in traditionally core areas like user support and
systems maintenance.
This is particularly true in the Australian Federal Government. The
drive towards outsourcing has seen large numbers of highly capable
staff move to contracting rather than be swept up in the outsourcing
companies. Moreover, as departments have moved to focus on applications
development and internet enabling of services, the demand for contract
staff has increased.
Most contractors typically find work through contracting agencies.
These organisations are in close contact with government clients and
other organisations, and identify suitably skilled contract staff for
specific requirements. These organisations are essentially the sales
force for individual contractors, and while they are valuable resource,
their focus is typically on serving their clients rather than the
contractors themselves.
Although some Departments do on occasion engage contractors directly,
there is a considerable amount of effort involved for them to do so,
and generally involve accepting an onerous set of contract risks and
professional indemnity insurance expenses.
Contracting agencies essentially provide two engagement alternatives to contractors:
- treatment as an employee for the duration of the contract
- contracting with a proprietary limited company, through which the contractor operates.
Under either arrangement, the contracting agency makes their profit by
taking a margin from the gross billable income of the contractor
(either on a percentage of rate basis, or at a fixed rate per hour) as
each invoice is issued, together with any taxes or fees that must be
deducted as appropriate to the employment arrangement (including
payroll tax, superannuation, workers compensation etc.).
However, contracting agencies strongly prefer to deal with companies
rather than individuals, due to the costs and complexities associated
with employing people for limited periods of time, and quite often
encourage new contractors to operate through the companies of
established contractors if the individual is not prepared to set up
their own company.
More often than not, however, individual contractors have chosen to
establish their own small companies, particularly where there is an
opportunity to obtain further tax advantages. However, these
opportunities have been steadily decreasing as governments have refined
and modified their approaches to tax collection, particularly in the
area of the collection of payroll tax.
The OTOBAS Group
At the OTOBAS we understand this situation, and have developed a
flexible employment and engagement model that ensures that our
contractors receive the maximum return for their effort. This is good
for the contractor, but also good for the client as minimising our
margins ensures the most competitive price when bidding for work
We are always looking for new staff who are happy with the contracting
experience, have a good track record, who are self supporting and who
are seeking above average remuneration flexibility.
If you are considering giving up running your own company, or if you
are someone contemplating contracting for the first time, we may be
able to offer you a viable employment alternative. If you are
considering restructuring and expanding, we may be able to provide you
a few tips about what is involved, and assit you with some of the
administrative aspects of running a larger company.
For further information, please contact us, attaching a brief description of your background and expertise - you may be just the person we are looking for!