Permanent or Contract? Which one is best for you?

At Fusion the Resource Management team speak to an array of IT professionals on a daily basis working either as contractors or permanent employees within the BMC and Salesforce technology sectors. The reality of the situation is that if you’re a strong candidate in these areas then you’ll have plenty of employment opportunities as either a contractor or a permanent employee. There is no one size fits all approach to this, but you may be asking which option is best for you?

Why Permanent?

Invariably the top answer as to why an in demand candidate would elect to be permanently employed is stability. Most people have a mortgage to pay and a family to feed, and thus the regularity of knowing you’re getting paid at the end of the month can’t be underestimated. Then there are the benefits to consider. As a permanent employee you will receive holiday pay, sick pay and pension contributions amongst other benefits you won’t receive in the contract market. Often, in permanent employment there is a more defined career progression path, whereas with contracting you’re typically brought in for a short period of time to do a specific job. Location stability is also worth considering. Typically in permanent employment you will go to the same location to fulfil your role on a daily basis, although we appreciate this is not always the case.

Usually the contract market requires you to be more flexible around location. In this day and age loyalty comes at a premium, with candidates increasingly likely to switch employers, being able to demonstrate a long period of permanent loyalty is likely to serve you well in the long run, even if in the future you move into contracting. Avoiding contract lulls and the application process should be considered when thinking about whether or not to leave permanent employment. Some contractors are lucky enough to have a long contract agreed and will have agreed their next one prior to the end of an existing contract, but this is not always the case. Contracting can involve jumping between 3-6 month contracts, finding yourself constantly applying, speaking to recruiters and interviewing, which will become tedious. Permanent employment is less admin intensive, you know you’re getting paid every month and don’t have to worry about filling in time sheets, chasing payments or being on top of your own tax liability.

Why Contract?

It’s no secret that comparable rates of pay for contractors are better than their permanent counterparts for equivalent jobs. In our experience a contractor who works all year can expect to earn between 150-200% more than a permanent employee over the same time period. Contractors often site flexibility as a key reason; they have the freedom to decide which contracts to take, whether or not to extend etc. It’s often said that variety is the spice of life, there’s no doubting that some contractors are attracted to being able to gain experience working on a multitude of projects, thus giving them ranging experiences within different organisations. Being a contractor naturally opens you up to networking opportunities, by virtue of being a contractor you’ll make a vast array of contacts within various organisations which will be useful tool for gaining future contracts down the line (assuming you’ve made a good impression!). Capitalise on a growing market, why not contract? Figures show the contract market is going from strength to strength and thus there is a good opportunity for contractors to benefit from this for themselves.

Isn’t it a hassle becoming a contractor though?

Fear of the unknown may be stopping some people moving into contracting. It doesn’t need to be scary. There are plenty of articles online which can talk you through the process of setting up a limited company or the steps you need to take if you chose the umbrella route. Most umbrella companies will advise you on the pros and cons of Ltd vs Umbrella and which option is best suitable to your situation.

Is the contract bubble going to burst?

Some fear that the current contract market is a bubble, created by a weakened economy over the last few years. People may also take into account the current government stance on tightening up the laws around single consultant limited companies. However despite this the contract market continues to go from strength to strength. Whilst in theory these things are true, the reality is that employers will always value the short term expertise of a contractor that can be brought in and utilised to fulfil a specific business requirement. Employers also benefit from the flexible nature of employing contractors as opposed to permanent staff and as such are unlikely to shift heavily back towards permanent employees despite a strengthening economy.

What Now?

There isn’t a correct answer as to which is right in general, it is entirely dependent on your personal situation. Overall the permanent versus contract argument could be summarised as; stability versus opportunity. Evidently there are pros and cons of each. If you’re working within the BMC or Salesforce arena feel free to get in touch with our Resource Management team to discuss your situation.

Rhys Jenkins
Fusion Resource Manager


By Daniel Swann