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Contract Vs Permanent work - the big dilemma in the change sector

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Energy & Utilities, insurance, Investment Management...

The progressive and dynamic nature of the business transformation and change sector has meant that over the past few years’ contract employment has become an ever increasingly popular option for both employers and professionals working in the industry.  However as the market continues to grow, the number of permanent opportunities are also growing.  This means that change professionals have to weigh up the pros and cons between permanent or contract work before choosing their route.  The candidate is in the driving seat and they have some big decisions ahead.  In fact it will be one of the biggest areas of personal change.

Of course what is right for one person varies to the next.  The decision is based on a number of factors, from personal circumstance through to individual psychology.

Contractors

  • Finance – This is the big one!  Contractors are better paid than their permanent counterparts.  This is due to the fact that employers are not required to provide benefits, holiday entitlement pay nor any sick pay.  If you work through a limited company then there are also allowances and other expenses which make tax efficiencies.
  • Experience – Because the average change contract is time limited to 6 months, you experience a range of working environments, projects and situations.  You also experience different work cultures and personalities.  This experience soon makes your CV become more expansive and diverse, giving you an edge over others both in terms of both the tangible knowledge gained and softer skills learnt.
  • Apolitical - because you are always one step removed, change contractors rarely find themselves being dragged into office politics or involved in gossiping.  Large amounts of time and energy are saved!
  • Flexibility – You can fit contracts around you and your lifestyle.  You are not limited to rigid holiday seasons and if you decide to work a particular way (maybe 4 days per week or early hours) then you can negotiate this.
  • Knowledge – Due to the nature of contracting, an individual who is in short term assignments is regularly networking and looking for their next contract.  This mean that market knowledge in the areas of business transformation and change are often more in depth and this can be used to your advantage.   It certainly makes the contractor more marketable. This leads nicely into….
  • Agile – Because you are not secure, you have perfected job searching skills and therefore you are more adaptable to changing job market conditions.  During the financial downturn, change contractors performed better in job interviews than their permanent counterparts.

Permanent Employee

  • Financially protected and risk averse – In short, you get a regular income no matter what.  Not only are you protected in your role by a contract, which makes dismissing you difficult, but you have a financial cushion in terms of a notice period and should you need it, redundancy payments.  Loans and mortgages are easier to come by and you don’t need to worry about professional indemnity insurances and income protection.
  • Benefits – Whether gym membership, life assurance or pensions, you get a range of benefits from being an employee.  You also have priority over the company equipment!
  • Career progression and development – There is often a structured career path within change and business transformation, and a budget to spend on training.  Promotional criteria are clearly laid out and if you perform you will be rewarded.
  • Certainty – Few change roles involve extensive traveling, therefore you can be pretty much certain of where you will be based all of the time, who you will work alongside and the routines involved.  You know the projects, the culture and anything else.
  • Satisfaction – permanent employees invest more emotional input into projects.  As a permanent employee you will receive the plaudits over a contractor when a job has gone particularly well.  You are part of the company family.
  • Belief – employers are likely to have more belief and trust in permanent employees.

If you do decide to take your change career in a different direction and contract, you need to learn the art of negotiation and become familiar with running a company (if decide to go down the limited route or make certain you find the right umbrella company), and change your mind-set.  Whilst most change contractors we work with rarely seem to regret the decision to leave permanent employment, the uncertainty and demands of contracting life do not suit everyone.  Being honest about this is essential.

If you do make the move, have a back-up plan.  But whatever happens, ensure you leave your permanent employer on the best possible terms.  Many of the change contractors we represent have returned to previous employers in a contractor capacity at some point. 

All transformation and change projects can succeed with a combination of permanent and contract employment. The challenge is accessing what matters to you most.  Once you have done that you can then decide whether you want to contract or become a permanent member of staff.  Then once you have made that decision, you can steam ahead with your career; there are hundreds of opportunities waiting for you.

If you want some advice on becoming a contractor get in touch now 0203 405 2500 - whether it be on setting up your own company, opportunities in the market or even if you're just contemplating the move and want to make sure it's right for you!