At some point in your career, you may need to make a choice about whether to accept a job offer in a contract role or a full time permanent role. Approximately 25% of the workforce have been employed in a contract role since 1996, following an upward trend that started in the early 1980s, and is likely to continue. Contracting is common in the IT industry because of the nature of the work being highly specialised in skills and projects. Clients’ business models and transformations can vary depending on the season. This flexible approach means clients can adjust their workforce to match changing demand. For those looking to start out in contracting, there are many ways to get involved. These include freelance opportunities, temporary agencies and direct recruitment.contractors-benefitsContractors are often hired for projects that need someone with specific skillsets. These could be anything from website design to graphic design to web development. The project will usually specify the length of time the contract needs to run for. If you’re working for a company, your manager will probably tell you when you start and finish. However, if you’re self-employed, you’ll need to negotiate with the client yourself about when you start and finish working.

A permanent employee is someone who works for you for a certain amount of time, usually for a set monthly wage. You pay them every month and they are covered under your insurance policies. If you hire a permanent employee, you will need to follow the same processes as if you were hiring any other type of worker. Hiring permanent employees also means that you will need to deal with payroll, taxes, insurances, etc.

Contractor Benefits

Rates tend to be higher for contract workers than for full time employees as they include weightings for leave and the reduced level of job security. Rates usually sit at about 20% higher than an employee salary equivalent, depending on whether you’re working full-time or part-time. Hours may be more flexible, depending on the client and project – rates typically offer greater flexibility than permanent employees. You may also have access to additional benefits, including paid holidays, sick pay, maternity/paternity leave, health insurance, life assurance, pension scheme, discounts and free legal advice. Many clients will provide training, mentoring and other professional development opportunities in an ongoing basis. Flexibility to take time off between projects, and to travel if necessary, is often provided if you’re in a contract position.

Better Pay: Job seekers who do contract work are always looking for the next job because there are always new projects coming up. As a result, they have many opportunities to get promoted at different companies. This means that they can increase their wages much quicker than full time employees who may work at one company for years. Time flexibility is another benefit for many contractors as they are only charging for hours worked. This means it is often easier to arrange for time off or different hours than for full time employees.

Permanent Role Benefits

Permanent employment is the more stable option for job seekers. You are paid a salary and given employee benefits such as sick and holiday leave. An employer must have workers and other insurance for permanent staff. When fully employed, there are usually more opportunities for training, bonuses and in house promotions.

It’s often believed that permanent roles have less flexibility than contract jobs. However, particularly since work at home became more common due to COVID,  many employers offer more options for staff in permanent employment. The Launch Recruitment blog outlines the Pros and Cons for Contract vs Permanent Employment in Digital.

Cons of Contracting

Contract employees will not have guaranteed jobs. Most of these temporary employees will be freelancers or contractors. There will be no fixed salary or benefits. Temporary employees may be hired and fired at any time. If an employee does get laid off, there will be no guarantee of getting another position. There won’t be paid annual leave, sick days, personal days or public holidays.

The lack of employee benefits means that your employer will not offer discounts, bonuses, incentives, corporate partnerships, employee perks and other employee benefits. You will also be less likely to receive any kind of learning and development opportunities. Your employer will not provide a structured growth path within the company, meaning there is no direct internal career progression for you.  You will be at greater risk of losing your job if you change jobs, since you will need to organise all of your own employment related paperwork and taxes. If you are working as a contractor, you will need to arrange your own visa restrictions, insurance, superannuation and company tax, among other things. It is also recommended to take out your own professional indemnity insurance.

Contracting is not always easy, especially when you’re trying to get a foot in the door. There are many reasons why someone might choose to go freelance instead of working for a company full time. A major reason is job security. If your employer decides to cut back on staff, there’s nothing you can do about it. You could lose your job even if you’re doing well. As a freelancer, however, you’ll likely be able to pick up any projects that come along. Your skills will also stay relevant because you’ll still be updating them regularly.

Australia’s Growth in Tech Jobs

The Digital Employment Forumestimates that by 2025, Australia will need 1 million people to come into the IT industry to meet demand.  That’s a lot of people needed over 3 – 4 years.

There are many reasons why demand for tech contractors has never before been higher. One reason is that technology is constantly changing. As we move towards a more connected world, businesses require workers who understand how to adapt quickly to new technologies. Another reason is that the global economy is currently undergoing a massive transformation. Businesses are struggling to keep pace with changes in customer demands, competition from emerging markets and the rise of new technologies like AI. As a result, companies across every industry are looking for ways to innovate and grow.

In the past, companies were able to hire workers at lower salaries because they could pay them less. Now, instead of paying low wages, companies are looking for ways to provide more perks and benefits to employees. Companies like Amazon and Google are offering free lunch and gym memberships to keep their employees happy. These companies are also trying to make sure that they have enough qualified candidates available for any job openings.

Cons of Permanent Roles

If stability is what you need, then permanent employment is what you should consider. The main considerations are lower pay than contract work and generally less flexibility. But for many, the security and stability of a long term, permanent position, outweighs the benefits of contracting.

Many people change over their working career. What might suit you at one time of life, might not at another. Regardless of which you prefer, it’s always good to keep an open mind and see what is on offer in either permanent or contract roles. You might find your dream job!