Contract vs. Permanent employment

Reply Fri 18 Oct, 2013 03:58 pm
Anyone have comments/suggestions/horror stories about working contract?

It looks like I can get about a six percent raise by switching to this contract opportunity that's come up. Call me crazy, but I just don't see that there's enough of an upside to even consider it seriously. It's a 12 month contract with the "possibility" of converting to permanent.

All I see is risk, with very little reward. Is there a big upside to working contract positions that I'm missing? (I'm in IT.)
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Reply Fri 18 Oct, 2013 04:47 pm
Higher Pay : More Risk

(Sometimes much higher pay, sometimes not : Sometimes much higher risk, sometimes not)

You also tend to get more variety with contract work, and you tend to get more respect from the boss/customer, at least until they hire you, then you're just another employee.

Contract work tends to be very nice if you live in a big metropolitan city where there are lots of options right nearby. If you live in the suburbs, then you may end up commuting two hours each direction every time you find a contract that you can get to. It's also pretty nice if you are a software engineer proficient in one of the hot languages (because once they get used to you they generally let you work remotely most of the time).

I've been contracting for several years. There are a lot of things to consider before getting into it. If contracting conditions are prime then you can make a lot more money, but if the environment changes then you can get poor very fast.
Reply Fri 18 Oct, 2013 05:02 pm
Thanks, that's good info.

I got 'em up to about a 10% raise, but it's a lot less vacay.

Still not digging it.
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Reply Fri 18 Oct, 2013 05:03 pm
So, what length contracts have you encountered?

Do they ever actually offer you a permanent position?
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Reply Fri 18 Oct, 2013 05:42 pm
Iffin that contract work means you get to pay employer's portion of social security and medicare, there goes your six percent, and then some.
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Reply Fri 18 Oct, 2013 06:01 pm
How happy are you with your current work? If I was happy, I wouldn't switch for 10%. If not, I would; it's a chance to find something better. But of course, I have nobody else who depends on my income.
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Reply Fri 18 Oct, 2013 07:00 pm
I've done both contracting and perm.

Contracting = more $$ and the opportunity for overtime
Little or no paid vacation time
Benefits, if they are offered (they have been required here in Mass. for years, but they weren't before Romneycare), are expensive and usually lacking. I'm on RP's plan so it doesn't matter to me, but it can matter to others
Work variety
Some guarantees of additional time, sometimes not
I've also, at times, been shunted aside as the temp, not being able to participate in company outings. Mileage has varied, though. Some places are kind to contractors; others are not

Perm = if I'm laid off, I can get severance
less $$, no overtime
Paid vacation time
Better benefits but I rarely take anything beyond vacation and if there's a commuter benefit offered
Work is more lock-step
Raises are more lock-step as they come under personnel budgets rather than what are more like full-time equivalent slush funds
Virtually no guarantees of additional employment
Often more acceptance as an employee
Annual performance reviews (my experience has been in a lot of places that it's very Dilbert-esque and can be an occasion for an employer to nitpick so as to withhold raises)

Oh and temp $$ is usually something like 40 - 50% of what they're really paying for your time. Keep that in mind if you go temp to perm and are offered perm, when negotiating salary.
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Reply Fri 18 Oct, 2013 09:06 pm
What about insurance (medical, life, dental)?

The rule of thumb that I heard, taking into account insurance and uncertainty and vacation, is that a contract position should pay twice what a permanent position pays.
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Reply Sat 19 Oct, 2013 07:41 am
Thanks, all.
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Reply Tue 21 Jan, 2014 11:08 pm
I Think:


1. Higher earning potential
2. Your cost to a company is less in the long term
3. In tough times companies often outsource what would normally be their permanent positions
4. Companies don’t have pay benefits, holiday, sickness and other related costs
5. Not restricted or constrained in a fixed position
6. More flexibility
7. Less company politics to consider
8. Fixed hours and daily pay rate
9. More opportunity for career breaks and travel
10. Better for candidates without too many personal or financial commitments and those who are comfortable with rapid change and disruption


1. Security and stability
2. Training and learning opportunities and career progression
3. More likely to achieve a higher profile or managerial position
4. More job satisfaction
5. See full lifecycles of projects and have a more in depth involvement and understanding
6. Benefits, bonus, holiday pay and pay increases
7. Pension and retirement plans
8. More rights as a permanent employee
9. Contractors are expected to have a lot more experience
10. Better choice if looking to settle down
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