Most candidates are looking for job security, and generally speaking, job security is found in a permanent position in a company.
With the high likelihood of regularly changing jobs and the lack of seeing the long-term impact of your efforts in a company, a contract job might not seem like the best way to achieve job security, nor would it seem to help one’s career progression.
But is this really true?
Many believe that contract positions are a great opportunity that is often overlooked by job candidates.
In this article, we explore further this growing trend of contract work.
The Difference Between a Contractor and a Permanent Employee
A contractor is someone who works for a business on a project or finite basis. In contrast, an employee works full or part-time for a business and is subject to national and state labour laws, including those that cover pay, benefits, termination procedures and taxes.
Companies that contract people to work for them have a different pay scale for them than the direct employees that they hire. Contractors cost companies much less than permanent employees because they don’t need to pay benefits, unemployment insurance, or holiday and vacation pay.
Growing Trend for Contract Work
The gig economy is a term for the growing trend of contract work. The gig economy is also often called the 1099 economy, after the tax form used by contractors.
The growth of contract work is illustrated by a study from the Freelancers Union, which found that 34% of the American workforce is now freelancing, up from just over 22% in 2014. This amounts to 54 million people, and the number is expected to grow to 60 million by 2020.
Contract work has many advantages over traditional employment. Contractors are usually paid on a project-by-project basis, which can provide more financial stability than a regular job with a set salary. They also have more control over their hours and working conditions.
However, there are some downsides to contract work. Contractors often don’t have access to the same benefits as permanent employees, such as health insurance, paid vacation, and retirement savings plans. They also may not be covered by unemployment insurance if they lose their job.
Despite these disadvantages, the pros of contract work often outweigh the cons for many people. The gig economy is growing rapidly, and it’s likely to continue to do so in the years to come. As more and more people seek out contract work, the advantages of this type of employment will become even more apparent.
If you’re considering a contract job, weigh the pros and cons carefully to decide if it’s the right choice for you.
The Pros and Cons of Contract Work
For candidates actively looking for employment; who are in between jobs; those who have returned from travelling overseas for a long period of time (or want to continue doing so – for example, 9 months on, 3 months off); or have other flexible situations; contract positions are most beneficial. Contractors never feel constrained by any particular role or organisation for a long period of time.
Those who plan to later go into permanent employment can also benefit. Even short-term contracts look much better on a resume than a gap in employment especially if it works within a candidate’s industry niche.
On the other hand, a permanent job offers an individual the luxuries of job security and stability. Companies providing permanent jobs understand the need of promoting higher levels of job satisfaction to improve workforce performance. Furthermore, permanent employees have a more secure mindset. These employees are more likely to have higher money-saving tendencies than contract workers do.
Benefits of Contract Work
1. Increased flexibility: One of the main advantages of contract work is that it offers increased flexibility compared to traditional employment.
2. You can choose your projects: When you work as a contractor, you have the ability to choose the projects that you want to work on. This means that you can work on projects that you are passionate about and that interest you.
3. You can choose your hours: One of the great things about contract work is that you can often choose your own hours. This is perfect for those who want to have a better work/life balance.
4. You can work from anywhere: Another advantage of contract work is that you can often work from anywhere in the world.
5. You are your own boss: When you contract, you are effectively your own boss. This can be a great feeling for those who want more autonomy and control over their work.
Disadvantages of Contract Work
1. Insecurity: One of the main disadvantages of contract work is that it can be insecure.
2. irregular income: Another downside of contract work is that your income can be irregular. This can make it difficult to budget and plan for your future.
3. No benefits: As a contractor, you are not entitled to any employee benefits, such as health insurance, vacation pay, or sick days.
4. Limited job security: One of the biggest disadvantages of contract work is that it offers limited job security.
5. You may have to hustle for work: When you’re a contractor, you may have to hustle for work at times. This can be stressful and can make it difficult to plan your work schedule.
As you can see, there are pros and cons to contract work. It really depends on your priorities as to whether contract work is the right fit for you.
If you value job security and benefits above all else, then a permanent position is probably a better option.
But if you’re willing to trade off some stability for the chance to earn more money, learn new skills, and have more freedom and flexibility in your job, then contract work might be the right choice for you.
While it depends on his or her personal situation or choice, a candidate should be more open to contract work as the idea of job security in a permanent position has changed. With the slowdown in the private sector and in times of economic recession, many companies have been forced to lay off permanent employees and make redundancies. There are many opportunities for both employers and candidates to grow and meet business challenges through contract work as demonstrated in this blog.
Have you taken a contract job before or hired a contractor? What were your experiences with contract work?