Contract work vs. permanent positions

[zoebartlett]

I''m hoping to get some info. on the pluses and minuses of doing contract work vs. taking a permanent position.

Have you ever left a permanent job for a contract position? How did you deal with knowing there was an end date and job security might be an issue? How long was your contract work for? Was it a challenge or was it fairly easy to adjust to? I''m sure I have other questions, but those are the ones I can think of right now.

Thanks so much for any insight, thoughts, or tips!

 

[Hudson_Hawk]

Didn''t you post something similar a few months ago?

Is there any chance of the contract going permanent or is it really just contract?

I worked on a contract basis for two years when I worked for Pearson. I knew there was an opportunity for it to go permanent so I worked as though I was competing for the position. I think it ultimately helped me get the permanent job. But no two contract jobs are the same even within the same industry, so it''s hard for someone who''s not in the teaching biz to really weigh in on the risks/benefits pros/cons of contract work you might be considering.

 

[Mara]

Date: 2/18/2010 6:48:17 PM
Author:ZoeBartlett
I'm hoping to get some info. on the pluses and minuses of doing contract work vs. taking a permanent position.

Have you ever left a permanent job for a contract position? How did you deal with knowing there was an end date and job security might be an issue? How long was your contract work for? Was it a challenge or was it fairly easy to adjust to? I'm sure I have other questions, but those are the ones I can think of right now.

Thanks so much for any insight, thoughts, or tips!

I would leave a permanent job for a contract depending on the contract. Contract typically can be more money so it would depend on the position. Is there option for permanent? Or is it a really long contract? If either of the answers are YES I would leave a permanent position if it was more $$$. I could get benefits through my husband's company and have previously when on a contract. I would also take a contract at a company I really wanted to get into if it was the only way to 'get in' and knowing I could prob move around internally once my contract was ending.

As a contractor, I loved that it seemed like most of the office politics left me out of the drama. Also many times you can make your own hours or have more flexibility than with the expectations around permanent.

Depending on the company itself, you can be treated like a permanent employee but be contract. There are def some companies I would not want to contract for based on what I have heard on how they treat their contract employees (aka sub class). The company I am at now, I contracted for a year and 4 months, and then went permanent. I made a fair amt more as a contractor but I was maxing out the contract option so I had to go perm. Either way they treated me like permanent so my transition was pretty seamless. But some companies treat their contractors like crap.

I would not leave a permanent position for a short-term contract at a questionable company with no option for permanency OR extending contract. If I was unemployed though, I would prob take a short-term contract just to be doing 'something' rather than waiting around.

 

[goldenstar]

I''ve been at the same firm for almost a year and a half as a contractor and I HATE it!

I actually can''t think of any pros, other than that I''m happy to be working at all. Some of the things I don''t like are specific to my particular situation but the more general cons are:

-Job security-- for me its non-existent. My year and a half has been comprised of multiple short contracts that had been renewed/extended. I don''t know if I will be employed at the end of any given contract.
-Taxes-- a total PITA. They don''t withhold taxes from my checks and the bookkeeping is a pain. I also have to make sure to set aside money from each check to pay the income tax. I would rather have withholdings so I''d have one less thing to think about.
-Perks-- Also non-existent. Per my contract I don''t get paid overtime or bonuses. Employees get benefits and also little perks like commuter checks (you use pre-tax salary to buy vouchers for things like bus passes or train fare). The firm also pays for a lot of its employees professional expenses such as membership dues and continuing education.

That''s all I can think of for now. As you can see, I personally am not happy with my arrangement but I think it can be a lot better depending on what industry you''re in. Theoretically, I could negotiate a more favorable contract but in this market I can''t really afford to be demanding. Hopefully someone with a better experience will chime in.

 

[zoebartlett]

Thanks so much HH, Mara, and Goldenstar!

Sorry if I''ve posted about this before -- I looked and couldn''t find anything. If I did and overlooked it, sorry about that.

Actually, it''s my husband who''s considering leaving his permanent position and looking for contract work. He''s a database developer/data analyst. He got a call yesterday from a recruiter who thought he''d be a good fit for a contract position at a company. I''m a little unclear on all the details, but this job would be working with some type of health care/medical software or database. He has some experience with it and the recruiter said he thought that D would be be a good fit.

The contract could be 1 month-1 year, which is pretty standard for the recruiter who places people in other contract positions in various places around the country. Apparently, with this particular position he spoke to the recruiter about, it''s strictly contract -- no chance of it becoming permanent. Maybe that would change over time, but who knows. It appealed to D. because he''d be able to travel and see the country. The recruiter didn''t mention salary, so the benefit details are unknown right now. He could go on my insurance, so that wouldn''t be an issue. We''d have our home base (either in NC where we are now or back in NE, if we move back home), and we''d visit each other as often as possible.

I don''t know if D. will get an interview with this medical company, but his conversation with the recruiter went well. Doing contract work is appealing to D. because of the variety of companies and jobs he may do. He''s never done it before though. Honestly, it scares me because of the lack of job security. There''s no way we could live on my teacher''s salary if something were to happen and he wasn''t able to find another contract position after one job ended.

The job D. currently has was supposed to be a contracted one, and D. opted to take it because he was unemployed at the time and he needed something. By the time he had signed all the paperwork though, the company decided to just make the position permanent instead. When we moved to NC, we did so knowing this. If it wasn''t permanent, I would have most likely stayed in NE and kept my job. With my job as a teacher it doesn''t look good on a resume to do several one year stints in various places (and moving around every few months isn''t doable). Consistency is a good thing in my field. Too much moving around and school districts start to wonder why. That''s why we''d have to have a home base and visit each other when possible.

Goldenstar -- your list of cons (well, the first two) are what makes me nervous about it. D. feels confident that he could move from one contract to another without a lapse in employment, but he''s been unemployed before, and it was very scary (for me). We did fine because of the unemployment benefits/$, but we wouldn''t have made it if we had to live on just my salary alone.

I really appreciate your help ladies! Thanks again!

 

[D&T]

Hi ZB!
I have been a contractor before myself and have been hired on permanently and have also floated around
A few things to consider:
a contractor position self-employed is different than being contracted by a recruiting company. A recruiting company gets paid a hefty fee and they determine the salary to give you, not the company that you are working with (essentially you are working for the temp or recruiting company). I used to be the contractor recruited by a firm, and I did a job that had access to what I was paid by the recruiter, and from their that is how they get paid. The company that hired me only agreed to a certain amount they would pay the company and whatever I can negotiate from the recruiter is what I get paid. My SIL also did recruiter in a different specialty as well so I knew what I was getting into. Sometimes the firm of interest will also post jobs for that position with a different pay range, other times, they deal strictly only with recruiters. If you can get on with the company itself, you have more room to negotiate on pay range. Example.. a while back, I was hired by a recruiting firm that would pay the recruiter on me $30/hr... however I would only get paid $18/hr (examples of dollars not actual),,, the recruiting firm pockets the difference - pays for other employee benefits and expenses. Once I got on staff, My pay actually increased, because they no longer had to pay $30/hr, they now only have to pay $20 or $25/hr,, but they would now have benefits and other stuff to pay on behalf of me.

I really didn''t like the feeling that I was a "contractor" temp basis without good medical benefits from the company. I also wanted to "belong" to an organization that valued me. When I worked for a larger corporation, I didn''t like not being "included" in "special events"

The only reason why I went with a recruiter or temp agency was because I was desparately looking for work and some of them had access to the right people. My husband started with a recruiter, but after three months, his contract was up and they hired him full time ( they did want to convert him over to employee status within three weeks but they did have a hefty fee/fine if they did so with the recruiting agency so they waited until their contract with the recruiting agency was up to swap him over)

hope this helps somewhat.
I have also been a contractor/ self employeed doing some consulting work, and that was somewhat nice (but it was considered self employed, business)

 

[zoebartlett]

Thanks so much D&T! I''m going to show this thread to my husband when he gets home from work and get his thoughts. He may have some questions for you, if you don''t mind me passing them along.

My husband isn''t a net worker naturally, so it''s hard for him to contact companies without seeing a posting first. In other words, he''d never think to send a letter of interest to a company he''d like to work for unless he was replying to a specific job posting he found. I think that''s why he''s been working with recruiters/headhunters over the past few years. I''m the complete opposite -- whenever I''m looking for a new teaching job, I have no problem sending out letters/packets even if I have no idea if they''re hiring. We handle it so differently and we''re in such different fields, so it''s hard for me to give him advice. I know how *I''d* do it but I have to respect his way too.

 

[Smurfysmiles]

I''m contract right now and I''ve been working a couple months at a time just to sit on edge to see if it would be extended. So far I''m extended til may 1. I really really REALLY hate the insecurity and instability of it all. Personally I would rather be full time.

One of the pluses is that if you need a day off, it''s fine, you just don''t get paid hourly for that day. Also I am able to take a vacation if I need to (Wasn''t penalized for taking time off for wedding or to fly home for 2 weeks).

Another plus of contracts is that you can end up showing a diversity of job positions on your resume. At least for someone who works in multimedia and web, this is definitely a big thing to have. Plus I was still able to get health insurance through the company which is really nice as well. My taxes are withheld from my paychecks as well as my health insurance for dh and I so that has been nice.

 

[Octavia]

I don't know if you saw this in the New York Times yesterday, but the government is cracking down on companies fradulently designating employees as contractors. If the company your husband is thinking about working for is above-board, it shouldn't be a problem, but it's definitely something to think about.

 

[yssie]

Date: 2/19/2010 5:55:30 PM
Author: Smurfyimproved
I'm contract right now and I've been working a couple months at a time just to sit on edge to see if it would be extended. So far I'm extended til may 1. I really really REALLY hate the insecurity and instability of it all. Personally I would rather be full time.

One of the pluses is that if you need a day off, it's fine, you just don't get paid hourly for that day. Also I am able to take a vacation if I need to (Wasn't penalized for taking time off for wedding or to fly home for 2 weeks).

Another plus of contracts is that you can end up showing a diversity of job positions on your resume. At least for someone who works in multimedia and web, this is definitely a big thing to have. Plus I was still able to get health insurance through the company which is really nice as well. My taxes are withheld from my paychecks as well as my health insurance for dh and I so that has been nice.

Everything she said! Minus the health insurance and tax withholding, unfortunately

 

[zoebartlett]

Smurfy and Yssie -- thanks so much for giving your thoughts on contract work. It''s the stability issue that I''m dealing with. I feel like we could work everything else out if needed, but that''s the one thing I get hung up on. It wouldn''t be such a hardship if I made more money but my meager teacher''s salary wouldn''t cut it.

Octavia -- I don''t read the NY Times so I hadn''t seen that. I''ll definitely show it to my husband. Thanks for the link!

I can''t wait until this is all over with and mt husband find happiness in a job. Then we can move onto other topics of conversation. This one is kind of draining.

 

[Mara]

ZB I think in a situation like yours and your hub''s...I would be hesitant about taking a contract position if it wasn''t definitely for long-term. Obviously in an ''at will'' employment state which I think is most if not all, you really aren''t guaranteed any sort of stabiliy anyway even with a ''permanent'' job...this is why I tend to not mind contracting and like the flexibility it offers, and usually it''s a fair amt more $$ too (and honestly I wouldn''t take one if it wasn''t unless there was a specific reason like wanting to get in at a specific company or break into a new industry etc). But since you mention your salary, and if your hub is the breadwinner I''d want a far more ''stable'' feeling from the breadwinner yanno?

 

[panda08]

Yes... well, I actually quit a position in a law firm without a job in hand because I couldn''t stand my boss. I then contracted at another law firm, not so much for a set period of time but just as an ongoing thing depending on work flow. I was single and on my own at the time so the lack of a steady income and benefits from a permanent position did worry me a bit. I went on cobra for my health benefits and set aside money for an IRA for my retirement. I contracted for about three to four months while I looked for an opportunity I really wanted.

I would have been much more comfortable contracting on a long term basis if I had a spouse that had benefits. I have several attorney friends who contract full time and it works for them. In my industry, if you cut out the middle man (recruiter/headhunter), your hourly can be more than what a permanent employee makes. I did like the flexibility of working from home (or Starbucks, or where ever I felt like that day) and dictating my hours. You do have to be careful about setting aside money for taxes so you''re not hit with a surprise come April 15th.

Has your DH researched the availability of, or the demand for, the types of contracting positions he''s interested in so that if one dries up, another would be relatively easy to find? Perhaps that could help the decision making process. When I contracted several years ago, it was fairly easy to find another gig if one ended. With the economy now, not so much.

Hope your DH finds something that makes him happy!

 

[zoebartlett]

Thanks Mara! I definitely know what you mean. I know he''d be careful accepting an offer (if one was made), and he wouldn''t do it unless it made sense on all fronts.

Panda -- it''s funny that I''m so hung up on stability because I quit a job at the end of October without having a new one lined up. I left for a similar reason too. I was lucky to find one 3 weeks later though, but it''s scary leaving a job without something else lined up. I''m not sure how much research my husband has done on the availability to other jobs -- he may have, I just don''t know. Thank you very much for your thoughts!

 

[Smurfysmiles]

In our situation we had a choice between a really good paying contract job and a not very well paying permanent job. We went with the contract because it would help us pay off more debts sooner. So that was a big factor in our decision as well

 

[miraclesrule]

It''s sort of an oxymoron these days to use the term "permanent job". I just read a long article about this topic recently. It has become fortunate merely to be gainfully employed in any capacity.

As the economy continues to put pressure on corporations and corporations continue to operate as they have in the past, they will convert as many positions as possible to "contract labor".

It''s become a buzz word in the corporate world and it will continue to be a trend. As long as I qualify for benefits, I don''t care what they call my work status. In the end...everything is temporary.

Don''t wait on pins and needles though. Always keep your eye on an open opportunity. When I had a 6-month contract, I informed management at 5 months that I had found a great opportunity and wanted them to know that I was putting them as a reference. They freaked out and I had to remind them that I was only under a six-month contract. They ceremoniously tore up the contract and then told me to "get my ass back to work". Sometimes it shifts power to let them feel the fear of losing you instead of vice versa.