Why Do Companies Prefer Contractual Over Permanent Employment, and What's in It for Employees?

Please let me know why companies should hire employees on a contract rather than on a permanent basis.

What are the benefits to the employees on the other hand?

Dear Friend,

Greetings!

Some advantages of contractual employment:

1. No need to respect them - Employees won't be treated at par.
2. No need to give importance to the contract employee.
3. Easily thrown out of the office if the management dislikes.
4. Low package.

These are my views.

Regards,
John N

Hi,

Well said, John! I'm on a contract role and facing similar hindrances.

1. Being a contractor, there is no respect for us. Managers treat us equivalent to office boys. In fact, I am more qualified than my manager.

2. No salary slip for us.

3. No leave facility for us except for the weekly off. Sometimes we work on Saturdays and Sundays too.

4. No clarity and job security. This type of discrimination is followed even in CMM Level 5 companies.

Regards,
Amarnath

Hi,

Normally, permanent workers are employed in jobs of a permanent nature, whereas contractual employment is for positions with a specific duration. Employers generally prefer contractual employment due to the freedom to hire and fire, lower wages, and comparatively higher output.

Cyril

Hi Abhishek,

My company wants to hire employees on a contract for around 11 months. Can I engage employees on contractual terms without having a contractor or obtaining a license for the same if I bring them on board as consultants and pay them a fee for their services? What happens if the number of employees exceeds 20 but they are spread across India? Would I need to provide them with benefits like PF, ESIC, etc., if their salary is above Rs. 7,500 per month? What could be the benefits and legal implications of this arrangement?

Any assistance on this query would be greatly appreciated.

Regards,
Abhishek