Making decisions comes easily for some. For others, it’s difficult at best. When you’re making a choice about the type of job you would like to have, you may find yourself considering a role that is a permanent position or a full-time contract, and of course, you’ll want to make the most informed decision possible.
In Cella’s 2023 Talent Report, we asked more than 1,000 digital, marketing and creative professionals which types of jobs they prefer to apply for – permanent or contract / contract-to-hire? The results were eye-opening: 43% apply for permanent roles, while a combined 45% apply for contract / contract-to-hire roles.
Which is best for you? This blog will consider some of the pros and cons of both.
Stating the Obvious: Permanent vs. Contract
Permanent: Stability. It may go without saying, but a permanent position won’t expire at the end of a set period of time. You’ll have the opportunity to work at a company where you have chosen to plant your talents without an imposed time limit.
Contract: The clock is ticking. With a contract, you may have a few months to a year or more before the work assignment expires. If a contract is completed or expires without renewal, you will find yourself back in the process of seeking another role. Pro tip: Ask on the front end of a contract what the conditions for renewal or extension are so you will be able to gauge when you will need to renew your contract or pursue another work opportunity.
What Are the Benefits?
Permanent: Most permanent roles include benefits as part of a full compensation package. These benefits can range from healthcare insurance and health savings accounts; bonus packages; paid time off (PTO) structures; life insurance plans; retirement savings plans; wellness programs; employee support resources; discount programs; pet insurance; and other benefit options. These benefits represent a significant monetary value that is highly appealing to many job seekers. Keep in mind, employers often have significantly different benefits packages and not all have the same value or appeal.
Contract: Does a contract mean no benefits package at all? Not exactly. All contracts are not the same. Depending on the organization you go with, some contract roles are given the option to participate in company-sponsored benefits programs. Others may not offer benefit packages to contractors. Often, contract roles don’t have PTO arrangements, but they do provide a measure of flexibility for time off with supervisor approval – perhaps more than companies that offer permanent employees a limited, set amount of PTO.
The Bottom Line
Permanent: Salaries are often the driving factor in job negotiations. When you’re considering a permanent position, you will be able to negotiate, yes. However, most permanent roles have a set salary range. Increases are incremental over periods of years. They may or may not reflect your expertise, value and contributions to the organization. When deciding, you have to think through whether the base salary you are offered is the amount you can live with and see grow over time.
Contract: Higher salaries are often a selling point of contract work. A contract rate, because it is for a certain period of time, tends to be higher than a starting permanent salary base. As a result, you can bring home a significantly higher salary for the duration of your contract than you might if you were in a permanent, full-time role.
Dream Jobs at Dream Companies
Permanent: When you accept a permanent position, it takes time to establish yourself and advance your career there. Promotions aren’t achieved or offered on a set schedule. If you’ve been at a company for a short amount of time but find an available role at another organization that you’re interested in, sometimes the timing doesn’t work out. You may be concerned about how it will reflect on your resume. These are valid concerns, so choose wisely.
Contract: It can be hard to get your foot in the door at well-known, high-profile companies. Contract and contract-to-hire roles can serve as a springboard to help you land a job at a company you want to work for long term. When your contract comes to an end, it’s not unusual that the hiring company will want to retain your services or convert your contract position to a permanent one. Keep in mind, your rate of pay may decrease because a full-time employee benefit package will come into play, but that in itself has strong value.
Make Your Choice
When you're looking for a new job – whether permanent or contract – you have to prioritize what’s important to you, consider what makes sense for your life situation and evaluate the opportunities that can enhance your career. Taking time to weigh the relative merits of your options is an exercise in critical thinking that is well worth the effort.