Contract vs. Full-Time Employment: What’s the Story?
Today, an increasing number of workers are opting to be contractors rather than full-time employees. For both employees and workers, contract work offers flexibility without the commitment of full-time work.
The size of the contract workforce has been growing, partially due to the benefits that come from the working arrangement. According to one recent study, nearly 15% of all U.S. employees are considered to have contractor status.
In this blog, we’ll explain contract employment, the doors it can open for full-time opportunities, pros and cons, and why many businesses are turning to contractors.
A full-time job is employment in which workers work, on average, at least 40 hours per week. Contract work, on the other hand, is a temporary assignment with an employer. It often involves work on a special project or initiative.
Employers choose contractors for multiple reasons. Often, contractors supplement staff with professionals possessing skills that are not in place among in-house staff. Or contractors may be used to augment existing staff when additional help is necessary to complete work.
Contract workers are paid based on a negotiated rate, either hourly or project-based. In some cases, contractors may work for an employment agency that manages the placement and logistics.
Once the work is done, the contractor and employer typically part ways. However, in some cases, the contractor is rehired to complete additional work.
While contract work is growing in popularity amongst both employees and employers, the reason(s) a company chooses to hire contract workers can vary. Companies may choose to hire contract workers for several reasons, including:
Companies experiencing a surge in customer inquiries, requests, or support needs may hire contract workers to handle the increased volume. This could be due to various factors such as product launches, marketing campaigns, seasonal peaks, or industry trends.
Some companies may prioritize enhancing their customer service by ensuring quicker response times and better support quality. Hiring more contract workers allows them to reduce wait times, provide personalized assistance, and improve overall customer satisfaction.
Companies operating globally or serving customers in different time zones may hire more contract workers to provide round-the-clock customer support. This ensures that customers receive assistance whenever they need it, regardless of their geographical location.
Companies may also choose to outsource their customer support functions to external contract centers or offshore locations due to cost advantages or to leverage the expertise of specialized service providers. This can lead to an increased number of contract workers being hired by third-party service providers.
Some companies may require contract workers with specialized skills or knowledge to handle complex customer queries or provide technical support. Hiring contract workers with specific expertise enables them to cater to diverse needs effectively.
Being able to hire contract workers with specialized skills and/or years of experience can ensure a company has the brightest minds working on current projects. A contractor can see a broader perspective and bring new ideas to get a project off the ground. Or a consultant can analyze a specific issue and offer innovative ideas. But since that expert isn’t hired full time, the company doesn’t continue to pay that higher-salary once the project is completed.
Hiring contract workers allows companies to scale their operations up or down based on demand fluctuations. They can adapt their workforce size to meet changing business requirements and ensure efficient resource allocation.
This also allows the company to improve their speed of execution and time to market as necessary. Working with a staffing firm can reduce the hiring and onboarding processes too, ensuring that when a company needs all hands on deck, they have extra hands ready and holding the necessary tools.
The growing popularity of contract work should speak to the benefits. As a contractor, workers have more control of their schedule and can work across industries and project types. Consultants don’t have to deal with internal politics; they’re simply hired to resolve the issue and can then choose to leave.
There’s more flexibility in so many ways. Here are a few reasons people choose to look for contract work:
As mentioned above, flexibility is the name of the game for contract work. Contractors have ample control over the type of work they do, for whom they work, and when they work. Contracting is also ideal for people looking for a side hustle to earn extra cash.
While contract workers may need to be available to their employer at certain times for meetings or specific work, contractors often can set their own schedule. If you’re a night owl or have caregiver responsibilities, contracting is an ideal way to work when your schedule permits.
One of the major contract employment benefits is the freedom to work from anywhere. Whether it’s a home office or a local coffee shop, work can happen wherever you are. Usually, all you need is a computer and a good internet connection.
Working remotely also reduces the need to drive to the office and spend the time and money on commuting costs. Many remote contract workers are also able to travel and explore new places thanks to their work’s flexibility.
Work-life balance is a primary reason to choose a contractor lifestyle. Contractors can prioritize what’s most important in their lives. They are not beholden to a full-time employer’s rules, work hours, or demands.
Balance means different things for different people. Contracting can allow you to pursue your favorite activities, care for loved ones, or volunteer.
As a contractor, you’re likely to see many different types of projects and initiatives. You can also be selective in the projects you take, to ensure you’re always working on something that interests you. While picking and choosing jobs, you’re continually gaining experience.
Your work is likely designed to push new initiatives forward and meet strategic goals. In turn, your value in the labor market goes up when you’re constantly working on cutting edge technologies.
While you can gain skills and experience through different positions, you don’t want to share too much information. It is important to note, due to the proprietary nature of some work projects, contractors may be asked to sign non-disclosure agreements. To maintain a strong reputation, contractors should keep the work they do private and confidential.
Contractors have the choice to work for as many different employers as they want. The opportunity to learn about different employers and their work is one of the major advantages to contract work.
Another benefit of contract work is learning and experiencing different industries and segments. These experiences help to deepen your experience and add breadth and depth to your resume. Experience in various industries can help you diversify and find opportunities across sectors.
Specialized contractors bring expert skills and solutions to their work. That means they can often command higher pay rates than those of full-time employees.
Contractors often are hired to serve a specific need, filling in for skill gaps not present among the full-time staff. Their specialized abilities allow contractors to command and get higher rates of pay. According to Upwork, nearly half (44%) of contractors gained more income from freelancing than from a traditional job.
It is not uncommon for a contract job to become permanent employment. The advantage of a contract position in this scenario is that both employers and contractors get to know each other.
When the work outcomes are particularly effective, there may be interest on one or both sides of continuing the relationship. Some contract positions are even advertised as contract-to-permanent roles. In such cases, contractors work for several months as their performance and suitability for full-time work is evaluated.
In technical fields, there is a high demand for skilled employees. Contractors may choose to maintain flexibility but can explore full-time work when and if they want.
Contract work offers both employees and employers flexibility and unique advantages. Workers can enjoy job flexibility, diverse project experiences, and the potential for higher pay rates. Employers benefit from access to specialized skills, scalability, and cost-effectiveness.
While there are possible downsides to contract work, it’s a great option for many people. Ultimately, individuals considering contract work should carefully weigh the pros and cons to determine if it aligns with their career goals and priorities.
If you’re ready to get started as a contract worker yourself or utilizing contract work on your team, OSI Engineering is a top-rated workforce solutions partner specializing in contract services. Whether you want to join their talent network to find opportunities or workers, we can help you make the right connections.