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More Jobs Shifting From Full-Time to Contract

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Today, many career opportunities that once came with a W2, full benefits, and the promise of a long-term relationship now come with a 1099, zero benefits (except for free coffee), and the understanding that you'll only stick around for the duration of the project (if you're lucky).

5 Ways to Manage the W2 to 1099 Transition

That's because companies that have implemented hiring freezes still need experienced people to get the work done. Exit the employee, enter the contractor.



Contractors Are Here to Stay

"The trend of replacing employees with contractors has been going on for a while, and it's really where the opportunities are in this economy," career coach and author Deborah Brown-Volkman tells Yahoo! HotJobs. "The trend will likely continue because it works out well for the company; they don't have to pay you more, they don't have to pay your health insurance, and they use you only when they need you."

The good news is contract work will never fully replace traditional employment. The better news is many newly minted self-employed professionals -- also called contractors, consultants, and name-the-profession-for-hire -- actually prefer the freedom and variety of self-employment.

New Approaches

Career counselors have some advice for navigating the quasi-employee landscape of the 1099 worker:

Save, save, save. You'll have to pay your own health insurance. And you'll need to save for the lean months when you're between projects (contract workers aren't eligible for unemployment insurance). And as for retirement investments, you're on your own there. Don't assume that you'll be earning a higher hourly wage than an employee in a similar job, either.

Always be networking. Career coaches encourage professionals to always be looking for the next job, but networking-autopilot is absolutely essential for contractors and freelancers. "Even when you've landed a good contract assignment, let your contacts know where you are and that you'll be available for work when the project is over," says independent career counselor La-Dana Renee Jenkins.

Consider yourself a CEO. "You're in business for yourself, you are a company, so you need at minimum a bio, business cards, and a website with your projects and accomplishments," Brown-Volkman says. And don't stop the networking when you arrive at a job site, she added. "Build relationships with as many people inside the company as possible."

Be a team player. Though it seems like a contradiction, you need to think of yourself as both a CEO and an employee, at least when you're on the job, Jenkins says. "If you really want a full-time job you will have a leg up with the company as a contractor, but only if you prove you have been a value to them." But if you do want full-time work, be clear about your intents, Jenkins added, to avoid getting pigeonholed as temporary help.

Take advantage of resources. There has been a growing awareness that self-employed and contract workers are a vital part of the economy, and a commensurate rise in resources to help them. There are inexpensive health care plans, which vary from state to state. There is also a national freelancers union, with support for legal, job search, health care, and long-term career issues.

Is It Right for You?

Most employment in the United States is at-will, meaning an employee can be fired at any time for any reason. However, with traditional, full-time employment there is an implicit agreement that the relationship will continue unless the company or the employee falters. With contract work a company is under no obligation to keep a worker beyond the six weeks, six months, or two years that's agreed upon in the beginning (but companies can cut a contractor loose even sooner). For those reasons, people who value security and routine above all else should make a full-time job their goal, Brown-Volkman says.

But in this economy, even if contract work isn't right for you in the long term, take it, Brown-Volkman adds. "You'll earn money and gain experience, have a variety of networking opportunities and you'll gain more confidence in your chances of finding a job when you're already working."
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