Permanent Vs. Contract
Having recruited for both permanent and interim roles throughout my career, I have seen first hand the benefits and pitfalls of both, from both a client and candidate perspective. For some the decision to take on contract roles or to go permanent can be a difficult one.
Let’s examine this in more detail. Contracting is usually more lucrative, however by accepting contract work it is not always stable and you are not guaranteed work. Essentially you take the risk away from the client and so in theory you should be paid a premium, however there is usually a very short notice period and no real benefits.
Pros and Cons – Permanent Vs. Contracting
- Lower income
- Not much Flexibility
- Benefits and bonus
- Team and belonging
- High risk and less security
- No Benefits
- No Career Development
- Higher Income
- Wider Experience
The difference between going permanent and contracting can go beyond financial reasons. If you are a permanent employee you will have a lot more job security, career development and most importantly a sense of belonging.
Contractors are in a different position – no one will consider their career development. You must have a lot more discipline, seek your own training and development to ensure that you are at the top of your game.
Over the years, during different market conditions I have seen contractors earn great day rates, and for some becoming financially free, for example paying off their mortgages and investing in second homes. However, when the economy has been weak the first person out of the door is the contractor.
Who should you recruit: contractors or permanent staff?
If for example you have a new project or several projects on the horizon and your looking to hire someone to head up that project you may want to examine the pros and cons of both, whether to hire someone permanent or a contractor. The question is, how do you decide?
This is what you need to consider before you make the decision.
- It may take longer to recruit. The selection process may take time to ensure that the candidate has the right skill set, cultural fit etc. Most candidates, if they are working will also have to work their notice.
- All employees are looking for development, a career path and will have long term goals.
- Hiring a permanent employee will mean time and investment in that person and you will have the security in knowing that once a project is complete they will not walk out the door.
- Permanent employees would expect commitment and success. They will also get a lot more buy in internally as opposed to someone who is there short term.
- Quick recruitment process and can hit the ground running.
- Hiring someone who can hit the ground running based on their past experiences.
- Cost will be higher.
- A contractor doesn’t tend to get involved in office politics and may not get distracted as would a permanent employee.
- With a mature contract market, there is a lot of talent out there.
Should you decide to go down the contract route our my advice would to ensure that please make sure that you have some knowledge transfer in place and that you don’t let all that knowledge walk out of the door. There are some great contractors out there with exceptional knowledge, so make sure it benefits your wider team.
The decision is yours.