How To Become A Contractor Project Manager in 2023

Hello and a warm welcome back to my YouTube channel. In today's video, we are going to talk about how you can become a contractor project manager. More specifically, we are going to be discussing what is contracting, why contracting, is it right for you, what are the barriers to entry, how do you begin, where do you do your job search, and how do you best market yourself? If you're new to this channel, please make sure you like and subscribe before we move on. Let's get started by talking about what is contracting. Contractors are used to fill a hole, to plug a gap. A resource is required and someone needs to fill it. To fill a position with a permanent member of staff normally takes a long time following really strict recruiting processes and laws. It is likely that the permanent post will be filled by an employee coming from another permanent role and must work their notice period before starting the new job. On the other hand, if the company chooses to hire a contractor instead, it is more likely that they could be available on short notice. Maybe in the best case scenario, they could start the work within a week. More importantly, however, a contractor can also be fired from their contract with only a short notice. Compared to this, with permanent workers, it usually takes a month of notice to fire someone, and sometimes if the staff is really senior, It may take 3 months to let them go. Furthermore, a major advantage for companies to hire contractors is how they are paid. Even though contractors are more expensive than employees, they do not count towards headcount cost. This means that it is always easier to employ a contractor, and even when there is an economic downturn and permanent employees are being fired, oftentimes contractors are employed instead. The advantage for companies to hire contractors are clear, but how do companies get the contractor positions filled? Most companies do not advertise for contractors directly. Instead, they go through specialized job agencies and recruitment consultants. There are recruitment agencies that specialize in project management, and there are also recruitment agencies that specialize in a specific industry sector, such as banking, government, or construction. They know a great deal about the specific industry that they are recruiting within. It is the agency's job to advertise the contractor positions and fill the position for the employer. And why would they do this? The employer outsources the work required to an agency, and of course the agency makes a commission. The agency will provide the employer with a number of candidates, and if the candidate is chosen, they will be paid a daily rate for the work that they are doing. Generally, this daily rate is about double what the rate would be if they were to hire an employee. 10 to 25% of the daily rate would go to the agency. The agency will negotiate the pay with the candidate, and the agency would be the one who pays the candidate, not the employer direct. The employer will be paying the agency, and after subtracting their fees, the agency will pay the contractor project manager. This also allows the employer to offset risk that may be associated with HR. Essentially, a contractor is a temporary employee brought in to help the company fill a gap. Maybe they have a short-term project and they don't want to hire a permanent project manager. To do the work. They may also want the flexibility to be able to let go of the project manager at any time without being subject to employment regulations. Now, with the lack of job security, you may be wondering, why should I go into contracting? Is it right for you? The reason that people go into contracting is for the money. Generally, contractors are getting paid double what employees are getting paid to do the same work. However, you have to keep in mind that the downside is you lack job security as well as benefits such as health premiums and pensions. The advantage is that you get paid more than the permanent staff. You have more flexible work. You can work on multiple projects. You can jump from client to different clients, which will allow you to gain a variety of different experiences. However, the challenges are you had to do your own administration. You had to file your own taxes. You had to start a company in order to become a contractor. Essentially, you have a B2B relationship with your employer instead of being an employee. You also had to be self-sufficient since you're coming in as an expert. People are expecting that you know how to do everything already. You won't be getting coaching and training. And perhaps there may be gaps between contracts. So if one contract finishes, you may not have another one lined up right away. Those are pretty much the advantages and disadvantages of becoming a contractor. However, the most notable advantage of becoming a contractor is more pay. This is the main reason that people choose to become a contractor project manager. As an example, let's suppose that A full-time permanent project manager makes around $60,000 per year, and this does not include their pension payments as well as insurances and other benefits. So let's suppose that the total compensation package is worth $65,000 per year. The equivalent contractor project manager could earn up to $500 per day. This is $120,000 per year. Keep in mind that because you are no longer an employee, the $120,000 is the revenue of the new company that you just set up. So you will have to pay corporation taxes. You would have to pay any sales tax as well as accounting fees. Even after subtracting all of the fees, contractors are still making substantially more than the permanent employee per year. Now let's talk about where you can find these contractor project manager opportunities. So these opportunities or contracts are advertised on numerous job sites. You can use indeed.com, you can use PayScale, you can use jobserve.com, you can use monster.com, you can use efinancialcareers.com if you're looking for something in the financial sector. Finding a contract can often be the easy part. Many people browse these job boards wondering what it would be like to get out of their current role and find a better job. However, the majority of people are putting off applying for these contractor roles because they have some misconceptions, such as you need a lot of experience in order to become a contractor, which is not true. My first job out of college was actually as a junior contractor project manager. Remember that it is not the amount of experience that makes you a contractor or not. It is the type of agreement you have with your employer. If the employer doesn't need someone on permanent basis, they would opt for a contractor, even if they have to pay a bit more in the short term. This allows them more flexibility. So the process to be hired as a contractor project manager is as follows. You find a job and you can go directly to the recruiting agencies as well to see if they have any positions. You may also want to make friends with a few recruiters and they will keep you in their database and contact you if they have relevant roles. A lot of these recruiters are motivated to help you find jobs because that is how they are paid. Generally, they are paid either a lump sum such as $5,000 or $10,000 for placing a candidate into the right role, or they would take 10 to 25% of your pay. Because they have placed you into a specific position. So it is in their best interest to get you hired. Once you find a job posting you like, you want to discuss with the agent what the role entails. You want to make sure that you get into the shortlist applicants and actually meet with the employer to discuss how you can add value to their project. If you pass the interviews, then you'll be asked to fill in some security education, and reference checks. If you pass all of these checks, then you can start work. It is really as simple as that. Let's now talk about the job search process in more details. The search for relevant job is performed on various job boards, as I mentioned earlier. Your job search will require smart searching. If you are looking for a project manager job, you could search project manager. However, you would get thousands and thousands of different results on different job boards. To help you refine your search, you could stipulate where you want to work. For example, you want to work from home or within 20 miles of your address. You could also specify the industry that you want to work in, or you could look for a project manager job opportunity that matches your specific skillset. For example, you could look for those job opportunities that require a PMP if you're PMP certified. You can also use Boolean search on many job sites. For example, you could put in project manager plus investment banking. This will allow you to see those roles that require project managers for investment banking firms. The more you look into advertisement, the more you get a feel for what role you'll be suitable for. I always apply for roles that look like a good match and I'm qualified for the role. But don't just look at the job description alone. A lot of times HR requires the hiring manager to put in a variety of different skills into the job advertisement, but the hiring manager would be okay with hiring someone without some of those qualifications if there's no other suitable candidate. Apply for the contracts you want, even if you don't have all of the qualifications listed. What do you have to lose? There are 2 strategies that you can use for your job search. Strategy 1, if you are rushed for time, you could apply for a lot of relevant jobs through looking at all of the job advertisements in just one weekend. Use this strategy when you don't have a lot of time. This ensures that you have the maximum number of agents looking at your resume and seeing if you're a good fit for the position. If your CV is good enough, the agent will call you with relevant potential job opportunities. It's also good to reach out to relevant agents and have a chat with them so they know who you are. Now let's move on to strategy number 2. So this is when you want to apply for a number of roles, making a note of the agent and number and call them to ensure that your CV has been received. So strategy 1 is to do a mass market approach. You look at every job opportunity and you send them the standard resume. Strategy number 2 is more intricate. So you look at the position that you really want and you figure out who is the agent or hiring manager behind that is, and you actually reach out to them personally. You try to find their phone number or their email address and send a personal note. This is more time consuming, but this method usually yields better results. Now let's talk about how do you market yourself? First of all, when you're looking at more and more of these job postings, you would be able to do a gap analysis. You would be able to see what these employers are looking for and what qualifications and industries they want their contractor project managers to have. Then you could compare this to your current skill sets and determine what skills and certifications you will need to obtain to be a more qualified candidate. This brings me to my next point, education. A lot of these employers are looking for contractor projects with the right credentials and certifications. If you work over in the UK, PRINCE2 certification is really relevant. There are 2 levels to the PRINCE2 certification. You have the PRINCE2 Foundational, and then you have PRINCE2 Practitioner. If you work out in the US or Canada, the PMP certification is really relevant. A lot of employers look for PMP certified project managers, especially if you work in the public sector. In order to qualify for your PMP certification, you do need minimum of 3 years of working experience. So this is certification for project managers who are more advanced. And if you don't have the 3 years of working experience, you can either get your CAPM certification. This is the entry-level certification from PMI, or you can also get your CSM certification. CSM stands for Certified Scrum Master. And it is a certification that's becoming increasingly popular. It is by the Scrum Alliance, and you don't need any prior experience in order to get the certification. The exam is just 50 multiple choice questions that you have to answer. Another certification that have been gaining popularity is the SAFe Scrum Master certification. This allows you to manage multiple Scrum teams all at once. The SAFe framework is for scaling Agile. One Scrum team is between 3 to 9 people, and a lot of organizations need a lot more employees than that. So the SAFe Scrum Master certification will teach you how to manage multiple Scrum teams all at once. Okay, now that we covered the certifications you may need, let's talk about your CV. So your resume or your CV is the first method you have to market yourself. The web is filled with tips on how to write your resume. Now, I'm not going to tell you what's the quote unquote best way to write your resume, but I will say this. Every time you send out a resume, have some sort of spreadsheet that tracks whether you got a reply from the recruiter or not. This will allow you to see what the conversion rate of your CV is. You could also follow up with a phone call or an email to the employer to receive their feedback on what they liked or didn't like from, from your CV. If you repeat this process a couple thousand times, then you can see what works and what makes a great resume, and you will understand how to market yourself effectively. Here are some general tips for what is a good CV though. You want to start with a clear profile. You want to have a summary at the very top that highlights your unique skills. Then the next section of your CV should be your employment. You want to do your employment section in reverse chronological order with your most recent job experience at the top. You also want to include bullets that will highlight what you have done in each role. This would include your key responsibilities and your key achievements. Use numbers to highlight your achievements whenever possible. After your experiences, you want to put in your education. Again, you want to list your education in reverse chronological order with your highest degree at the top, followed by your next highest degree. So if you have a master's, list that first and then list your bachelor's degree. After the education section, you want to list any other qualifications that may be relevant for this job. As well as any professional bodies, certifications, interests, and associations you may be a part of. Do not worry about keeping your CV to 2 pages. Agents and employers like to see everything that you have done. However, if you're applying for entry-level roles, then it does make sense to keep your CV to 2 pages. Generally, you want to keep your CV to be long enough to highlight all of the skills that you may have done. Once your CV is done, you are ready to send it off to various different agents. On many job sites, this could include just as simple as clicking the apply button for the job postings. Your CV will be saved onto their site and it will be automatically sent to the relevant recruiters. This doesn't take a lot of time to set up, and generally with HR software these days, it's actually a pretty speedy process. If you have registered with your favorite job sites in advance, they could also send you relevant job postings every single day that match your search criteria. I know you can do this on LinkedIn. You could also upload your CV right onto job search sites such as indeed.com or LinkedIn so recruiters can find you when they are looking for someone with your skillset. Usually it's a good idea to have a routine for job searching. Organize everything in a spreadsheet. I make a list of all the people that you have contacted for coffee chats, and I make a list of all the jobs that I have applied to. The reason that I mentioned coffee chats is because it's a very informal way to know more about the company and to get someone in the company to understand and know you better as a person. And if they like you, they may even give you a referral, which will get you to the top of the list. Generally, people with a referral will almost be guaranteed an interview. This gets you to the top of the pile. Oftentimes when a job posting goes out, the employer may be flooded with hundreds of applicants applying for the same role that you want. Other than using the company's HR softwares, the other way to get your CV to agents is to email it to them directly. When you have done contracting for a while, you will know a number of different recruiting agents. If you want to become a contractor project manager, it could also be a good idea to make a spreadsheet of all of the agents you have come in contact with. So whenever you're looking for a new contract, you can email out your new CV to all of the agents that you have in your network and see if they are currently hiring for any postings. Now, if you want to become a contractor project manager, it's impossible to avoid talking to agents. A lot of firms only work with certain agencies and they will not work with you directly. So you better get used to talking to a lot of recruitment agencies. Now, here is what the application strategy could look like when you are dealing with recruitment agencies. First, you would send out your resume and CV in response to a job posting that you have seen. Then you want to take note of when you send out your resume, the name of the agency and the name and contact details of the agent that you are dealing with. You want to call or email the agent to follow up to make sure that they received your CV. You also may want to get the agent to look at your experiences and your credentials to see if you're a good fit for the role in question. It's also a good idea to ask the agent for feedback because the agent is generally pretty knowledgeable about what these employers are looking for. Based on their feedback, you may, you may get some insights on how you can improve your CV and what skill sets you can acquire in order to become more marketable. You may also need to chase the agent a bit because they can get busy and they are dealing with a lot of different candidates. So you want to trace them maybe every couple days to see whether you have the interview or you're rejected from this specific job posting. All right, now let's talk about the interview process. Every firm have a slightly different interview process. Some firms will hire a candidate after one interview, whereas others will need 5 rounds of interview before hiring a candidate. Generally, you will have an interview with the agent first. The agent will see if you're a suitable candidate for this role or not. If they send you to the client and you don't meet the basic criteria, it's going to make the agent look really bad. So you will have a basic screening with the agency first. They will see if you're a good fit for the role, if you have the relevant experiences. If you do, then they will shortlist you and, and send you over to the hiring manager over at the employer side. The applicants will first attend a first round of interviews with the hiring manager at the employer side. At this stage, you are likely between anywhere from 1 to 5 people left standing for this position. So your odds of getting the job is actually pretty good. If you're successful after the first round of interview, you may be invited back for a second round of interview. Now, these interviews can be behavioral interviews where they ask you, what's your biggest weakness? Why do you want to work here? Tell me about a time when you had to deal with a difficult team member, or these interviews could also be technical project management questions. Some of these questions could include, how does Scrum work? What are the ceremonies in Scrum? How do you do estimation in Agile? How do you put together a project management plan? You could also be given a mini home assignment in some companies as well. This is the chance for the employer to quote unquote test drive you. Before hiring you. This allows the employer to see how you will work as a project manager. Maybe they give you a scenario and you have to create a project budget. They do this just to see how you will work. Some people interview very well, but once they get onto the actual project, the employer realizes it's not exactly the candidate they are looking for. So also be prepared to do a mini project. If you are in the interview process. But if you're selected to do these home assignments, it's actually a really good thing because generally only 1 to 3 of the top candidates get this home assignment before they are selected to be hired for the position. So just like you don't propose marriage to a girl or a guy on the first coffee date, you generally can't expect to be hired for a position after just one interview. It usually takes between 1 to 4 rounds of interview before you get the role. Although I have heard a lot of contractor project managers get hired after one round as well. So it totally depends on your experience level and the current number of people who are currently looking for jobs. All right. So if you're hired for the position, let's now talk about what to do before starting work. Congratulations, you got the job. So what's next? The agent probably has a good deal of paperwork for you to sign. You would agree upon a daily rate. You're not going to get a yearly salary. And the daily rate for project managers are, right now it's generally between $100 per hour to $150 per hour. And if you have any niche-specific industry knowledge that other candidates don't have. You can negotiate for a higher pay. After the pay has been agreed upon, you have to go through a security check where they do a background check on you. There may also be NDAs that you need to sign before you can start working as well. So be prepared for a whole bunch of paperwork. If this is your first contract, you also need to register a company. You have to either register a corporation or an LLC. It's best to speak to a lawyer to see what is the best option for you. You also need to find an accountant because now you are a registered business doing business with another business. You also want a system or spreadsheet to track all of your expenses because these are all deductible from your taxes. For example, if you have to drive to work, the gas money that you spend driving to work is deductible from your daily rate. It's a good idea to speak to an accountant before you start your first contract just to see what kind of expenses you can deduct. You will also need to open a business bank account. So once you have your LLC or your corporation, you can take that corporation incorporation form and register a bank account with that. Your employer would be paying you directly to your business bank account, not your personal bank account. You may also need to register a tax number. If you're over in Europe, you also need to register a VAT number as well. Now that you got all of the paperwork out of the way, it's time to start work and fitting in. When you start working on your new contract, bear in mind that most companies, even the most organized ones, may not be ready for you when you arrive. They may not have your desk ready on the first day. They may not have all of your access ready. Just be prepared for that. You may be expected to hit the ground running as soon as possible and add value. Since you're a contractor, they're not going to spend all that time training you and make sure that you get up to speed because you're coming in as an expert, which they are paying a very high price for. So my advice would be to spend the first day getting all your IT up and running, get your email working, make sure you have access to all of the relevant systems that you need in order to be onboarded. If you work in industries such as financial, you may also be required to attend some compliance training, for example, around money laundering and the such. And so just get all of those training out of the way, make sure your IT is all set up, make sure you meet all your team and really understand the objective of the project and what has been done so far. Once you have this ready, then you can make a plan of attack. When you're meeting your team, greet everyone, introduce yourself. Some pro tip here, it could be useful to keep record of all of the useful numbers. So for example, the IT helpline number, your username and passwords to different login systems, as well as your new phone number at your client site. You may also need access to different tools in the organization, such as Microsoft or Jira or timesheets, and you just wanna make sure you have access to all of these. Some agencies will work only with specific timesheet applications and just make sure what the rule and process is to submitting your timesheet and when you're getting paid. You may also want to check whether you need to send an invoice in order to get paid or not. Just make sure you understand all the rules and procedures at Your new client site because every company works slightly differently. And this is pretty much it. This is an overview of how you can become a contractor project manager. Once you complete that contract, make sure you update your CV with the new experience that you have gained. I hope you enjoyed this video and I hope you learned a lot about how to become a contractor project manager. Thank you so much for joining me for today's video. If you like this content, Please help me out by liking and subscribing to this channel. I make videos for project management, Agile, and Scrum, and I hope to see you next time. Have a great day. Thank you so much.