With rapid technological advancement, the technology recruitment landscape is in a constant state of flux. The requirements and expectations of personnel is already diverse and there’s an increasing range of skills and experience needed to complete projects. It makes sense for employers to draft in specialists for specific jobs as and when they arise, rather than employ permanent members of staff whose skillset might fall short in certain areas.
With fewer overheads involved in having a permanent member of staff on the payroll, businesses are willing to pay big bucks to draft in the talent who can get the job done then waltz out the door, without expecting investment in training and development or costly perks.
Because of the promise of a nice fat pay cheque, as well as the flexibility and promise of that ever elusive work-life-balance, the lure of contract roles is strong. Understandably so – who wouldn’t be attracted by earning potential that could easily double their current permanent salary?
Of course, if there were no drawbacks to joining the gig economy then everyone would be jumping on the bandwagon. There are pros and cons to consider, and your individual circumstances, life and career goals will influence your decision about whether your next move will be a contract or permanent role.
Here, we explore some of the pros and cons of each option:
Contract: The Pros
You will likely be able to command higher rates and be given the opportunity to enrich your skillset with varied experience across multiple sectors. Contractors tend to have more autonomy within their roles and a greater chance for innovation and creativity. There is also freedom from presenteeism and office politics; with no designs on advancing through the company, you can come in, do your job and go home. For this reason, many people report that contract roles give them the work-life-balance that permanent roles cannot, as well as the flexibility to travel or spend time with family.
Contract: The Cons
Being a permanent employee isn’t all bad, and a salary isn’t the only way you are rewarded for hard work. There are fewer soft benefits and perks offered with contract roles, often no holiday or sickness pay, and because your income isn’t guaranteed your borrowing power in terms of mortgages or other finance agreements can be adversely affected. The downside of having the flexibility is that you aren’t guaranteed that your next project is around the corner, and the extra money you make when working can be quickly eaten up during dry spells.
Unless you take out income protection or medical recovery insurance, an illness or accident that leaves you unable to work temporarily could have devastating financial consequences, and you will need to take care of your own healthcare insurance and pension payments, too, of course.
There’s also some uncertainty at the moment regarding the changes to IR35 regulations that are due to come into effect next April. Rather than contractors determining their own IR35 status, the responsibility will lie with the Client. So if the person you work for decides that IR35 applies to your contract, then there will be tax implications for you as the contractor, and this could see many contractors returning to permanent roles to reap the benefits along with the downsides.
Pros of Permanent
With a permanent, salaried role you will have job security, a contract of employment that clearly sets out your rights, and you can rely on your income and be sure you will be able to meet your financial obligations. You can be sure the money won’t run out in a few months time. Also, when benefits and perks are taken into account, senior positions can even command similar rates to contract.
With a permanent role, you have the opportunity to benefit from employer-funded training and to get your feet under the table. You have a workplace pension and benefit from the social aspect of building long-term relationships with colleagues and being part of a workplace family.
The cons of permanent roles
There can be reduced opportunities to reinvent oneself, and it’s easy to get stuck in a rut and become typecast. It can also be challenging to achieve market rate for your role unless you move jobs frequently, which can be disruptive and negate many of the benefits of sticking around to build a long-term, established role within one company.
How to make the right choice for you
Taking the plunge and moving to contract roles is more in line with an evolving workplace, where the gig economy and human cloud are breaking jobs down into individual functions. Generalists are out of fashion, and people want to hire in expert knowledge as and when it is required. From a social point of view, people have an increasing desire to be more in control of their time and their destinies, getting out of the rat race and working when they choose.
Many of our candidates decide they want to give contract roles a chance for a few years, taking the opportunity to earn some big bucks whilst having the flexibility to take some time out to train or travel, or even to enjoy time with their family. They then later move back to permanent roles, with an increased skillset and different outlook.
Whatever your reasons for wanting to move onto your next challenge, whether you’re looking to take the plunge and give up a permanent position for the lure of the gig economy, or whether you’re looking to settle down and get your feet under the table, we can help find the best opportunities for you. Contact our team to discuss your next step.