Permanent or Contract – Which is best for you?
We speak to contractors who always have been, and always will be, contractors, driven by the higher hourly wages and the diversity of work offered by contracting, and permanent employees who would never ‘risk’ life in the contract market. As with everything in life, there are pros and cons to consider, and the bottom line is that while you could put up a valid case for the permanent employment status, you can put up an equally valid one for contract work.
Ask yourself these questions
It really does come down to a handful of questions, I suppose.
Obviously, we are generalising here, but the big things to consider are:
1. Is your career actually viable as purely contract or purely permanent? The IT industry, as with many others, is very heavily reliant on contract workers as projects come and go. There will be periods where your specialism is in great demand for highly paid contract work and others where the security of a long term permanent role may be the more attractive choice. Clearly, having a degree of flexibility over one option or the other will stand you in better stead as you go through your career and need to move with the market.
2. Are you looking for a degree of flexibility in your working week? This can be met by either contract or permanent work, so if this is a priority for you, be sure to fully understand the requirements of the contract, or the terms of your employment if looking at a permanent role. With many employers clambering to be ‘a Top 100 Employer’, flexible working hours and working from home, etc. is becoming more and more commonplace in permanent employment contracts. However, the ‘on demand’ requirements of a company recruiting IT contractors can mean they need them to be highly focused for sustained periods and not necessarily have any flexibility around their working hours. Equally, a highly skilled, ‘in demand’ IT contractor can be in a position to negotiate the terms of the contract to suit their needs.
3. How much of a burden is the commitment of a permanent role in terms of your life goals and ambitions? If you want to climb Mount Fuji as part of a three-month sojourn, then you probably can’t expect an employer to support that. If you have itchy feet and want the freedom to travel for extended periods, or perhaps you have a second career you want to support, then contracting may be the solution. Over the years we have seen people who work a few months to gather the cash to spend a few months renovating a house, for example.
4. What are your income needs? A contract career can mean your income can fluctuate (although if you are in a high demand role, then this is less likely) so if your life requires a steady income then clearly a permanent role will have its advantages. However, if you’re in a financially flexible position where you can manage okay during periods of unemployment, then you have the freedom to make the choice.
5. Is self-employment really for you? Bearing in mind the complications of IR35, keeping your own books, declaring your income and tax liability and so on, for some people the status of being ’employed’ can have distinct benefits. Conversely of course, for those familiar with the territory and who have been contracting for many years, the additional income along with the diversity of work and the ability to take a break every so often outweighs the complications and the hassle…. You need to talk to an accountant about it all to really get an idea of which is the best path for you.
Different reasons for different people
We could go on with these considerations for pages and pages because the only fixed answer about the choice between contract and permanent is that everyone has a different reason for choosing which track they take.
As always, we are happy to help you by looking at your options regardless of whether you are a candidate or an employer, so feel free to call us for a chat.