With the spate of recent full time employee layoffs in the technology sector, many candidates are now starting to entertain contract opportunities given that fewer full time or “permanent”, (is any job permanent in this market?), roles are available. Despite the contingent labor market representing over $200B in spend last year, our sales and recruiting teams frequently engage with hiring managers and job seekers who are not familiar with the contingent or contract model.
For those job seekers weighing their options or choices, assuming you are lucky enough to have a choice, we thought it would be helpful to outline the pros and cons of each engagement model. There is no better or worse here, just different.
- Benefits: Employers often provide benefits such as health insurance, retirement plans, and paid time off to their full-time employees. However, established contingent staffing firms, like Ursus, do over comparable healthcare insurance and retirement benefits.
- Job Security (maybe see recent headlines): Full-time employees traditionally have held job security as they are less likely to be laid off or lose their jobs unless the company undergoes significant changes or restructuring.
- Opportunities for growth: Full-time employees have more opportunities for growth and development within the company, including promotions, training, and learning opportunities.
- Lack of Flexibility: Full-time employees have less flexibility in their work schedules and are required to work set hours.
- Limited autonomy: Full-time employees may have limited autonomy and control over their work, as they are often required to follow the company’s policies and procedures.
- Limited earning potential: Full-time employees are limited to their salary and may not have the opportunity to earn more unless they receive a promotion or raise which can often take years via promotion cycles.
- Flexibility: Contract workers have more flexibility in their work schedules and can often work remotely. Many contractors work for a one or two years, then take longer stretches of time off, that may not be acceptable as a full-time employee.
- Higher Earning Potential: Contract workers can charge higher rates for their services and have the opportunity to earn more money. This is especially true of highly skilled workers that complete projects at a faster cadence than may even be available to a full-time employee who is limited by the organizational structure of their employer.
- Autonomy: Contract workers have more autonomy and control over their work, including time off, location and choosing what projects and companies they want to work and for how long.
- Variety: Contract work provides the opportunity to work on different projects for different companies, which can be more interesting and challenging. Engineers and designers are typically drawn to working on the latest and greatest, coolest stuff!
- Cost of Benefits: Some contract workers pay for their own healthcare insurance out of pocket to ensure continuity as they move from project to project. However, established contingent staffing firms, like Ursus, do over comparable healthcare insurance and retirement benefits.
- Project Length Uncertainty: Contingent labor is just that, contingent. Many companies leverage contingent workers to take advantage of the flexibility of scaling headcount up or down quickly without incurring severance or payouts to full-time employees. But again, is any job permanent, safe or guaranteed in this market?
- Fewer Growth Opportunities: Contract workers may have limited opportunities for growth and development within a specific company compared to full-time employees. However, it is very common companies to convert contingent workers to full-time employees at any time during their engagement or even setting up “try before you buy” engagements with the contractor often referred to as a “contract to hire.”
Full-time employment and contract work both have their pros and cons, and the decision of which to choose ultimately depends on your personal preferences, career goals and the number of job opportunities at any point in time. Job seekers should always explore both options and consider career goals, short- and long-term financial needs, and work-life balance when deciding between full-time employment and contract work. One is not better than the other….just different.