Contract vs Employment: The Pros and Cons

contract vs employment

This post is the second in a series on the future workforce and looks at working under a contract versus employment in one workplace. Go back and read Job for Life to get a grounding before reading this. As with everything posted here, it’s always good to consider your circumstances before making a major life decision.

 

Many of you reading this may have worked out that I have several jobs. In fact, I referenced my regular job in Let’s form a company and on the pod (we’re back by the way) I’ve mentioned a few times that I also work as a journalist. Including Successful Graduate, I have about four different jobs I do on-and-off throughout the week and month, as well as some one-off jobs here and there throughout the year as they come up.

 

While I do have a full-time, regular job as well, the general idea of what I’m doing, and in fact what several people within the Successful Graduate team are doing, is pretty common these days. It isn’t what the majority is doing just yet, but having several contracts at once, or working a fulltime contract one after another is becoming more popular. As employers begin to favour hiring people for a project rather than a position, it also means by the time your career is in full-swing, you’ll probably be looking at contract employment more often.

 

This post is looking at the pros and cons of contract versus employment, but rather than give counterpoints, I’ll explain how each provides their own version of each point.

 

Security

Employment

The traditional model of full-time, ongoing employment provides job security in terms of knowing at any given time you will have a job in the future. Your position continues on until either the employer or employee decides to discontinue the relationship (there are exceptions to this, of course, but there are also many protections preventing unfair dismissal depending on your country).

 

Contract

In the last post, we discussed future trends and the likelihood (but not certainty) that you were likely to have more and more jobs in your life and contract work was becoming more normal. In that way, becoming adept at contract work provides a level of professional security as you move with the likely trends of the future.

 

Relationships

Employment

As a full-time employee, you are more likely to have strong connections and friendships with your coworkers and any clients or external parties your organsation has ongoing dealing with. For many people, this provides a high level of satisfaction and can often be missed when working alone.

 

Contract

While contract work might seem as if you will be less likely to form meaningful relationships with coworkers, the opposite is true. A more diverse network of people with whom you deal means overtime, friendships form with people in your field. I am now part of a touring group of conference nomads who get together every so often in different cities for coffee and a chat.

 

Remuneration

Employment

This fits into security, but it’s important to state that full-time work comes with guaranteed salary expectations. You know how much you will earn within a year, and can also negotiate your salary, have benefits such as superannuation/401k, sick leave, annual/holiday leave, bereavement leave, etc.

 

Contract

Negotiation becomes one of your best tools within contract work, as depending on your skills level, you should be able to agree on the cost of your time with a prospective employer or client. Generally speaking, because there is a lack of benefits such as leave and retirement funds, many contract jobs will pay above the salary level for someone in a position responsible for the work. This does have its downsides, of course, as you will need to manage your own tax, retirement funds, and save up if you want to take a holiday.

 

There are more pros to consider for both employment and contract work and it is worth considering everything before making the plunge.

 

That said, regardless of what the future holds, some things will remain true. Understanding what makes you the best is an ideal attribute and you might be surprised that you’re better than you thought you were. Sign up to Successful Graduate and start learning now!

 



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