Undoubtedly, one of the employment strategies that is expanding the quickest both in Australia and globally is contracting. The benefits of a contracting career are amply demonstrated by the fact that so many people are opting for it over permanent employment and forgoing essential benefits like paid vacation and sick days.
For many justifiable reasons, contractors typically receive higher pay than their employee counterparts. The fact that contractors give up the right to benefits that employees take for granted, like sick leave and annual leave, as well as employer contributions toward superannuation, is the most obvious justification for such a disparity in pay. It is the contractor’s responsibility to plan ahead for time off due to illness and other circumstances, such as vacations and downtime between jobs.
It’s likely that the contractor will make more money than the employee even if both were paid equally for their work, even if they were both permanent employees. This is because contractors have choices regarding how their compensation is structured and what type of business structure they operate under. For instance, contractors who are self-employed or paid through a trust can benefit from tax breaks not available to employees. Additionally, contractors have the option to salary package their income through their recruitment agency or contractor management company; benefits typically only available to those employed in certain sectors, like the health sector.
- PRO: Potential for Higher Earnings. …
- CON: Increased Uncertainty. …
- PRO: Lifestyle Flexibility. …
- CON: Outside Looking In. …
- PRO: Increased Technical & Professional Knowledge. …
- CON: Career Development.
Types of contract work
Some types of contract jobs may include:
Freelance jobs
Freelancers frequently work for themselves, either full-time or as side hustles. They work with clients they find themselves and charge per project. Freelancers can decide which clients and projects to accept, as well as their own working hours, rates, and deadlines.
Right to hire positions
The phrase “right to hire” means that an employer may, but is not required to, hire a contract worker on a full-time basis at the conclusion of their arrangement. These positions could act as a test run for the business and the applicant to determine whether a long-term working relationship is possible. The financial resources available at the end of a contract may also affect an employer’s right to hire employees.
On-call work
Those who perform on-call work may enter into a contract with an organization to show up and carry out tasks as needed. They may work other jobs or carry out other duties, but they are paid a waiting or bench fee to maintain their position with the on-call business so they can respond when called upon. When on-call employees receive their job orders, they are typically expected to report as soon as possible, regardless of their other obligations.
Temporary work
Most people seeking temporary employment submit their applications through a temp agency. Based on business requirements and your distinctive skills, these staffing services identify temporary, typically hourly wage positions. In fields like construction, administration, and others that are similar, temp work is common.
What is contract work?
A written labor agreement between an employer and a contractor underlies the type of employment known as contract work. Contract work typically has a set start and end date and can last for a short period of time or for a very long time. Companies may use contractors on a project-by-project, seasonal basis, or as needed basis. Contract jobs could provide you with the chance to work a second job for extra money or build up your resume experience.
Pros of choosing contract work
Some benefits of choosing to engage in contract work include:
Have freedom of choice
Those who opt for contract work might have the freedom to select the projects or contracts that they find appealing. You can submit an application for jobs that require your existing skills or could help you learn new ones. You can also choose where and when you work, sometimes.
Create connections
Large corporations may employ independent contractors for particular tasks or projects. This might help you become familiar with their business strategies and comprehend their corporate culture. When searching for full-time employment or other contracts, having previous work experience with illustrious organizations is also advantageous for your resume and can increase your appeal to rivals or other illustrious companies.
Build skills
You may have the chance to work on a variety of projects while employed on a contract basis, either concurrently or consecutively. Contrary to full-time jobs, where you primarily use the same skills and complete the same tasks, contract work allows you to gain a more varied set of experiences. By performing various tasks, you might be able to acquire new skills that you can apply to future positions.
Work with recruiters
Contract workers might collaborate closely with recruiters to help them land their first or next job. To find the best candidates for open positions, recruiters work for businesses or as consultants. This might make it easier for you to switch from one contract to the next without having to conduct a lot of independent research.
Avoid the office
Contrary to full-time employees, contract workers might spend less time at work or with their coworkers. They may work remotely or set their own schedules. Contract workers may not be required to attend company meetings or outings, which could prevent them from reporting to work early in the morning or late at night. This might aid in preventing potential conflicts or workplace drama.
Earn better pay
In the short term, contract workers might receive larger paychecks than full-time workers. This might be due to the position’s transient nature or other aspects. This may be practical if you want to earn additional income in addition to your regular salary or if you have urgent financial needs.
Test out an industry
Before deciding on a full-time position, contract work may allow you to gain experience in various industries. As a writer, you could, for instance, accept contract positions in the fields of entertainment, education, environmental studies, and human resources to determine what kinds of content you prefer to work with.
Find full-time employment
Contract work can occasionally lead to full-time employment with a company. Treating every contract position as if it were a full-time job could demonstrate to potential employers that you would be a valuable asset in achieving their long-term objectives, though it is not a guarantee. Even if a position doesn’t result in a permanent position, the same business may later request your contract services for additional projects.
Cons of choosing contract work
Some negative aspects of choosing to complete contract work include:
Fewer tax options
Most of the time, employers don’t deduct anything from a contract worker’s pay for income taxes, pension plan contributions, or other expenses. Although you might have more money in your bank account right away, you might have to put in more effort during tax season to make sure you’re in compliance with any fees.
Fewer benefits
Unlike full-time employees, contract workers typically do not have the option to purchase health and insurance benefits from their employer. Additionally, they might need to take unpaid holidays, sick days, or vacations. This may not be the case with all organizations. Before accepting a contract position, ask your prospective employer any questions you may have regarding these guidelines.
Less job security
Although no one in the workforce has true, constant job security, it’s more obvious for contractors who are aware of when their current positions and paychecks expire. Those who complete one contact before securing another might need to act quickly to maintain a consistent income flow.
Fewer opportunities for advancement
Even those with long-term contracts may not be subject to a traditional supervisory structure or report to a single manager. This could mean that there are fewer people who can lobby for you to get a raise, a promotion, or other types of advancement. To make sure someone is monitoring your work quality and progress, think about asking to report to one or more managers.
Fewer working relationships
Contract workers who come into the office less frequently might feel alienated from their coworkers. They might not have as many chances to build relationships with other employees. To meet new people, think about getting in touch with a few of your coworkers to get to know them better or participating in optional company events or team-building activities.
Contract work vs. full-time work
Contract and full-time employment have advantages for both employers and employees. Examine your interests, lifestyle, and skills to determine which career is best for you. Consider looking for full-time employment if you desire conventional benefits and a more solid sense of job security. Consider contract work if you want to develop your skills, diversify your work, or have a better work-life balance.
Contracting Vs Full Time Work – Should You Consider Being A Contractor?
FAQ
Is it a good idea to do contract work?
You should take a contract job because it will give you more experience, knowledge, and skills and will give you more control over your schedule. Additionally, a contract job offers you the chance to work in several different industries in a short amount of time.
What are the disadvantages of being a contract employee?
A disadvantage of contract employment is that, despite earning more money than full-time workers in the same position, it does not come with any employer benefits. This may entail forgoing parental leave, disability benefits, paid time off, health insurance, 401(k) contributions, and more.
Are contract jobs stable?
- Work on the Most Exciting Projects. In a traditional workplace, you aren’t given the opportunity to select the projects you want to work on.
- Add Some Flexibility to Your Schedule. …
- Meet New People. …
- Stay “Above It All” …
- Become an Expert.
