Cite.Co is a repository of information and resources created by industry seniors and experts sharing their real world insights. Join Network
Hi, Can anyone describe Contract employee v/s permanent employees. what are the pros and cons of the same.
From India, Mumbai
Who Is a Contract Employee?

A contract employee is an individual engaged by a business to provide a specific set of services. An employer-employee relationship is established pursuant to the terms and conditions of a written employment contract. The contract delineates the length of employment, the salary and bonuses (if any) to be paid, and the other benefits that accrue to the contract employee. The contract also sets forth the specific role the employee will play. Contract employees frequently are engaged for the pursuit of a particular project.

Job satisfaction is reliant upon different factors for different people. In the first instance, it might appear as though establishing yourself within a company, forming close working relationships with colleagues and receiving promotional opportunities as part of your career progression are more readily achievable as a permanent employee. However, all of these things can be accomplished as a contractor, and your career progression could be hindered if such factors are preventing you from considering a move into contract work.

The decision to go contract can be a difficult one unless you have an adequate understanding of how it can work to your advantage, so it is important that you consider the potential benefits of this type of employment in order to avoid inadvertently closing the door to opportunities that could take your career to new levels.

Contracting may be for you if you relate to these points:

•You want the choice to be selective of those you work with and work according to your preference.

•You love variety in your life, one job for life or even say 10 years working for the same employer is an idea you do not endorse.

•You are your own boss; the independence to manage your time is the major lure for working on contract as popped to being a permanent employee.

•You are a fast learner and know how to implement your ideas independently. The learning curve is also very high when working independently; you learn marketing sales and finance management all at the same time

Benefits of contract emp. for the employee -

Independent contractors make their own hours; decide when to work and who to work for. They do not depend on the success of a single business to produce Income and meet their financial responsibilities. According to the Wall Street Journal, independent contractors earn up to 40 percent more per hour than Permanent employees. Contractors do not receive benefits from clients; The higher pay is meant to make up for this. Rather than having taxes taken out Each pay period, independent contractors pay quarterly taxes, allowing them to hold onto their cash longer.

Many people may also be reluctant to opt for contract work due to concern that it will hinder their chances of gaining Charter ship. However, a large proportion of employers will offer opportunities to experience a variety of job roles and responsibilities to help contractors working with them in achieving chartered status. By working as a contractor, you can experience a wide variety of environments, acquiring a range of transferable skills that can work to your advantage as you develop your career. These skills are also likely to be gained faster in a contract position than in a permanent post and, as well as expanding your knowledge, they can make you a more desirable recruitment option and increase your chances of future employment and assignment opportunities.

The amount of control you have over factors such as when to work, where to work, who to work for and a contract length to suit you, is substantially increased with contract work. Permanent employees are usually subjected to greater restrictions than contractors, which can strongly influence the decision to take on a contract assignment. Contracting also provides an excellent opportunity to meet new people, not only socially, but also as a fantastic networking opportunity. By forming relationships with the people you meet working on different projects; you can keep up to date with new developments as well as the challenges faced by your industry. These new relationships can also provide important links to future career opportunities. Project managers regularly have tight deadlines that they work to, so are therefore generally more concerned about employing contractors with the right skill set that will successfully work within a specified timeframe than they are about getting a cheaper candidate who might not be as efficient. This can result in contractors being paid a premium for their services. Under normal circumstances contractors are not tied to the same period of notice as permanent staff either, which gives them more freedom to move around quickly and easily. As a week’s notice is not unusual for contractors; it can be easy to change jobs as soon as new opportunities arise. Contractors have the added advantage of choosing when they work, so can enjoy longer holidays than their permanent counterparts. It is not uncommon for contractors to take holidays of up to six weeks after an assignment has been completed. Being paid on an hourly basis also means that paid overtime is available for contractors, whereas permanent employees do not always have this option. As a contractor, it is important that you work through a reputable agency, as they are able to offer good relationship management, as well as discounted PI and PL insurances, free careers advice, ongoing rate negotiation and updates about the latest market trends.



A contract employee typically works for one or several organizations on a project or temporary basis. Many employers hire contract employees to supplement their staff for a variety of reasons.

Flexibility - Because businesses often hire contractors for temporary projects, they offer some flexibility with work schedules and locations. Many contractors work from home, and visit their clients periodically to report their progress.

Higher Wages - Because a contractor is not an employee of an organization, benefits such as health insurance and paid vacation is not offered. Employers may pay higher hourly wages to contractors because they have no additional costs and the commitment is short-term.

Commitment - A contractor is not committed to an employer after the assignment or project is completed, and can find one or several other opportunities while working on an assigned project.

New Skills - Because contractors often work in different organizations and industries, they often learn new skills as part of the project, which can enhance their resume.

From India, Hyderabad
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Co™