With more and more organizations augmenting their staff with contract employees, it is becoming more important than ever for people to consider the pros and cons of contract employment before they even apply. Here are my top pros & cons, along with a few additional considerations that you can use when deciding if contracting is right for you.
Pros of Contracting:
- Generate Income – taking on a contract opportunity is a great way to generate income while you are pursuing other options, such as permanent employment, schooling, or even starting your own business.
- Try Before Buy – while working on a contract you have the opportunity to conduct deeper research on the organization for which you are contracting. This is a great chance for you to determine whether or not you enjoy the company culture, team, and role before you make any decisions to pursue permanent opportunities within the organization.
- Foot in the Door – In some cases, contract opportunities turn into permanent roles. Starting off as a contractor gives you the chance to showcase your skills and talents, likely increasing the likelihood of you gaining a permanent role.
- Keep Experience – contracting is a key way for you to keep your skills current and relevant for your next role.
- Add Experience – if you are looking to make a career change, or if you are new to a country, contracting is a great strategy for you to gain the experience you need to move towards your ideal career.
- May Pay More – typically, employers will pay a higher wage to their contract employees to compensate them for a lack of benefits. What you lose in benefits, you could gain in increased salary.
- Grow Network – working with any employer, even on a temporary basis, you will meet new co-workers and hence, expand your network.
- More Employable – As the adage goes, it’s easier to find a job when you already have one. Working on a contract basis still counts!
- Less Competition – given that contract opportunities are a less desirable proposition, there could be fewer people competing for these roles. With less competition, your chances of getting the interview and even landing the job will increase.
Cons of Contracting:
- Uncertainty – the uncertainty that comes with not knowing when the job may come to an end is the primary reason that people find contracting an undesirable proposition.
- Keep Searching – due to the uncertainty (above), your job search never really ends. This becomes increasingly important as the contract opportunity comes to an end. Let’s face it, looking for a job is a full-time job, and it’s a lot of hard work.
- Lack of Benefits – as mentioned in Pro #6, there are typically fewer benefits available for contract employees. This makes long term planning (i.e. retirement, vacations, etc.) challenging.
- Hours Worked = Hours Paid – As a contractor, you only get paid for the hours you work. So, if you need to take a personal day or time for vacation, then this could be an expensive plan because you won’t get paid if you don’t actually work.
- Employer Support in your Job Search – given that you may need to look for another opportunity as your current contract comes to an end, it is important to know whether the contract employer will provide you with the flexibility you may need for conducting a job search. Special consideration may be needed for time off for interviews or network meetings.
- Childcare – although this only impacts parents, childcare issues may be a prohibitive factor when considering contract opportunities. I recommend you research child care options to see if there are options available to you with the flexibility you will need to accommodate a potentially inconsistent work schedule.
- Self-Employment Options – For those who are interested in embarking on a contracting lifestyle, it would be worth considering setting yourself up as a self-employed entity. In Canada, the options would include setting up a sole proprietorship or becoming incorporated, and in the US, it would be the difference between being a ‘W2’ or a ‘1099.’ Most countries have systems in place that cater to self-employed people, and these systems typically involve better tax implications for the self-employed.
Many contract opportunities will present themselves via recruitment agencies. As mentioned in a previous blog post, recruiters are a fantastic resource in helping you determine if contracting is the right move for you.
If you are considering contract opportunities, I hope this post helps, and if you have other helpful hints and tips, please feel free to share in the comment section below!