Contract vs Permanent - The Age Old Debate - Part One

Rhys Jenkins, Resourcing Specialist at PMC talks about the age old debate, this time arguing for contractors.

At PMC our recruitment team speak to IT professionals working either as permanent employees or contractors on a daily basis within the retail sector. We have also helped some make the transition from permanent over to contracting and vice versa. Our recruitment team are often surprised by the number of retailers choosing to rely heavily on contract resource within their IT departments, as opposed to making permanent hires to fulfil requirements or on-board the necessary skills and resource to complete projects. The reality of the situation is that with the economy continuing to perform and prosper in the UK, good candidates be it permanent or contract will have options as to where they chose to work. There is no one size fits all approach to this, but you may be asking which option is best for you, in this article we’ll fight the corner of the contractor!

Why Contract?

  • It’s no secret that comparable rates of pay for contractors are better than their permanent counterparts for equivalent jobs, in my experience a contractor who works all year can expect to earn between 150-200% more than permanent employees over the same time period.
  • Contractors often sight flexibility as a key factor, they have the freedom to decide which contracts to take, whether or not to extend etc.
  • It’s often said that variety is the spice of life, there’s no doubting some contractors are attracted to being able to gain experience working on a multitude of projects, thus giving them ranging experiences within different organisations which will stand them in good stead for future opportunities.
  • Being a contractor naturally opens you up to networking opportunities, by virtue of being a contractor you’ll make a vast array of contacts within various organisations which will be useful tool for gaining future contracts down the line (assuming you’ve made a good impression!).
  • Capitalise on a growing market, why not contract? Figures show the contract market is going from strength to strength and thus there is a good opportunity for contractors to benefit from this for themselves.

Other Things to Consider

Fear of the unknown may be stopping some people moving into contracting. It doesn’t need to be scary, there are plenty of articles online which can talk you through the process of setting up a Ltd company or indeed on the steps to take if you chose the umbrella route. The difference being if you chose the umbrella route you will effectively be paid each month by the umbrella company. They will handle the administrative burden of things such as tax and NI liability. Most advisory companies of this nature will be able to show you the net pay you will receive depending on which option you chose, so that you can weigh it up and decide what’s best for you.

To avoid this hassle altogether, for a small fee most umbrella companies and many advisory firms will advise you on the pros and cons of Ltd vs Umbrella and which option is suitable relative to your situation.

Some may fear that the current contract market is a bubble created by a weakened economy over the last few years, people may also take into account the current government stance on tightening up the laws around single consultant Ltd companies. However despite this the contract market continues to go from strength to strength. Whilst in theory these things are true the reality is that employers will always value the short term expertise of a contractor that can be brought in and utilised to fulfil a specific business requirement. Employers also benefit from the flexible nature of employing contractors as opposed to permanent staff and as such are unlikely to shift heavily back towards permanent employees despite a strengthening economy

What Now?

There isn’t a right answer as to which is right in general as it’s entirely dependent on your personal situation. Overall the permanent vs contract argument could also be summarised as stability vs opportunity, evidently there are pros and cons of each. If you’re working within retail IT arena I’d be happy to informally discuss any of the above in relation to your situation.

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