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Contract engineering and what you need to know about the industry!

Whether you are considering a career as a contract engineer or thinking about hiring a contract engineer for temporary assistance on a specific project, it is important to know what a contract engineer does.

Contracting is a building block to a strong career foundation.

Many contract engineering positions have recently started to grow in demand and popularity. Some of these positions are a direct result of the global expansion in automation and manufacturing. Many young engineers find that contracting is a great way to start their career out of college. It helps them to build a strong foundation because of the experience they can gain in a short amount of time. Most engineers will only contract for 2-3 years because of the demanding hours and travel that is often required.

THE THREE TYPES OF CONTRACT ENGINEERS IN THE INDUSTRY:

  1. Short-Term (1-12 months) Contract Engineers: These contractors are in-between jobs and aren’t sure of their next career move, so they want to try contracting until they find a full-time position.
  2. Medium Term (12-24 months) Contract Engineers: These individuals want to make a great deal of money quickly then move to a full-time position.
  3. Long Term (>2 Years) Contract Engineers: They enjoy the travel, different project experiences and the pay, and want to continue working as a contractor for the foreseeable future.
what is a contract engineer

Some of the top paying contract engineering careers to pursue:

THE TWO MAIN CAREER PATHS TO TAKE:

Contract House Employee (W2)

Many people prefer the comfort of working for a contract house as the company will take care of your expenses, provide company benefits, tell you what project you will work on, and they promote your resume to new customers.

Advantages of being a W2 employee:

  • Benefits – Covered by your employer.
  • Comfort – No need to worry about running your own self-employed business.
  • Contracts – Your business signs the contract and you only sign paperwork with your employer.
  • Insurance – Your employer covers your insurance cost.

Disadvantages of being a W2 employee:

  • Lower Hourly Rates – Your employer takes a large portion of the hourly rate, especially in the first 40hrs.
  • You Have A Boss – You report to a manager who tells you where and when to work.
  • No Flexibility – Not able to pick and choose the projects that you want to work.

Self-Employed (1099)

With the proper connections in the industry and a great reputation, you could be on your way to financial freedom and early retirement as a self-employed contractor.

Advantages of being self-employed:

  • Higher Flat Hourly Rates – Because you are working for yourself, you get paid a higher flat hourly rate compared to working through a contract house.
  • Retirement Allocations – With a Simplified Employee Pension Plan (SEP IRA) you can start saving 0-25% (max. $58,000 in 2021) of your compensation compared to a 401K with a maximum allowance of $19,500 in 2021.
  • Tax Credits – Turn your taxes into a tool for your self-employed business and receive many more tax deductions compared to W2 employees.
  • Be Your Own Boss – No one likes working for someone else.
  • Work-Life Balance – Work on the projects you want, when you want!
  • Build Your Own Brand – Showcase your individual talents while creating your own brand, and don’t let your name be tied to your employer.

Disadvantages of being self-employed:

  • Finding Work On Your Own – Without a platform like JOINER Services it can be difficult to get new customers in your pipeline.
  • Finding Insurance Coverage – Being self-employed you will be responsible for finding your own health and business insurances. For many people this is the biggest question mark about becoming self-employed, but with services like Nation Benefit Plans, often times people will find out coverage is nearly the same as they would pay if they were working as a W2 employee.
  • Business Accounting – You will need to track all of your business expenses, and provide them to your accountant annually.
Benefits of being self employed contracting engineer

EXPECTATIONS AS A CONTRACT ENGINEER:

Project Duration

In contract engineering, the contract will generally state that the project will last for a certain time period which could be anywhere from one day or up to a year or more. The complexity of a project will determine the length of time that a contractor will work for a specific customer.

Many contracts will last several months, especially if the project is an installation of an assembly line or automated system. Many times, contract engineers will work six or even seven days a week for a customer, depending on the workload and project timeline requirements.

Project Description

A contract engineer is often responsible for multiple things, and each project will be different from the next.  They are often asked to perform various engineering tasks because of the deep skill base that many contractors offer.

Frequently, contract engineers are used to help with the six main phases of a project:

  • Concept or Design
  • Testing or Prototyping
  • Installation or Integration
  • Qualification or Inspection
  • Service or Support
  • Training

Possible Contract to Hire

Another function that contract engineers perform is the evaluation of potential candidates as full-time employees for the customer. This evaluation process may be conducted while an engineer is still in the contracting stage. During this stage, the customer can perform a thorough review of all aspects of an applicant’s qualifications.

This review includes things like; understanding of facility equipment; how quickly they can troubleshoot issues, and often the most important is personal characteristics, such as how well they work with others or their team members. If a contractor chooses to decline an offer made by a customer, he or she is usually retained on site until a full-time hire can be made. 

Once a full-time position has been filled, the contract engineer is often used to help train the new employee. The contractor can then leave the company for the next project.

Travel

Contract engineers are often more willing to travel than full-time employees. Many times, because of the location of a project, there are not enough qualified engineers to choose from locally. Companies must bring outside contract engineering talent to its facility until those positions can be filled. Contract engineers can spend anywhere from weeks to months on the road working for customers.

This affords these engineers opportunities to travel across the country and even the world, which exposes them to new cultures and experiences.  Contract engineers can spend anywhere from 5% to 100% of their time away from home working for various customers. Using contract engineers who travel to job sites comes at a higher cost for the employer and enables contractors to earn higher wages.

Engineering contractor working on a plant in Michigan

Overview

The field offers benefits and advantages to both the engineer and the customer, no matter the industry. As may be expected, much of what a contract engineer does will depend upon the specific company, required skill set, or position.  It is essential to keep in mind that every project is different, and what is required for a contract engineer for one company may not be what is necessary for another.

It is best to research each company that provides and hires contract engineers and learn which positions are open and best for each individual. From the employer’s perspective, hiring a contract engineer is often the best solution to filling a temporary need, whether for a few days, weeks, or months.

Download our FREE pdf to access the top 4 reasons to become a self-employed engineering contractor!

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