Deciding between a permanent role and a contract or interim management position can be a pivotal move for your career or business, with each option offering distinct benefits and challenges.
At Godfrey Group, we’ve been asked many times what employment type is best for financial services businesses, and the answer is that it depends on your business goals, structure, and capability. We’ve put together a guide on the pros and cons of contracting versus permanent employment to help you determine which option best suits your needs and better navigate the hiring process.
Permanent Employee vs. Contract Employee
The primary difference lies in the duration and nature of employment. A permanent role involves a long-term commitment, a stable salary, and benefits such as leave entitlements, sick pay, and long-service leave. A contract role, on the other hand, is temporary, often project-based, and offers flexibility and higher pay rates but lacks long-term security and benefits.
According to the latest working arrangements survey from the Australian Bureau of Statistics, 2.9% of employees were employed on a fixed-term contract. This highlights the prevalence of contract roles within the Australian job market, indicating that while permanent roles are more common, there is still a significant portion of the workforce engaged in contract employment. At Godfrey Group, we understand the dynamics of both permanent and contract roles, offering tailored recruitment solutions to meet your diverse employment needs.
The Benefits of Permanent Employment
Job Security and Stability
One of the significant advantages of permanent roles is job security. Permanent employees can plan for the long term, benefiting from a stable income and the assurance of continued employment. For employers, retaining quality staff leads to improved operations and institutional knowledge retention.
Comprehensive Benefits
Permanent roles typically come with a range of benefits, including leave entitlements, sick pay, long-service leave, and retirement plans. These benefits contribute to overall employee satisfaction and well-being, promoting a loyal and motivated workforce.
The Benefits of Contract Employment
Flexibility and Higher Pay
Contract roles offer unparalleled flexibility, allowing individuals to choose projects that align with their skills and interests. Contractors often command higher hourly rates than permanent employees, compensating for the lack of long-term benefits. This flexibility can be particularly appealing during economic uncertainty or for those re-entering the workforce after a hiatus.
Bridging Skill Gaps
For employers, contract and interim management roles provide a valuable solution for bridging skill gaps, especially when faced with sudden vacancies or specific project needs. Hiring contractors allows companies to access skilled professionals without the long-term financial commitment, making it an ideal solution for short-term needs.
Pros and Cons of Contract Roles vs. Permanent Employment
Pros of Permanent Roles:
- Job Security: Long-term employment stability.
- Benefits: Comprehensive packages, including leave, sick pay, and retirement plans.
- Career Growth: Opportunities for long-term career development and promotions.
Cons of Permanent Roles:
- Less Flexibility: Fixed schedules and less freedom to choose projects.
- Potential for Stagnation: Risk of becoming too comfortable, leading to slower career progression.
Pros of Contract Roles:
- Flexibility: Ability to choose projects and control work schedules.
- Higher Pay: Often higher hourly rates to compensate for lack of benefits.
- Varied Experience: Exposure to diverse projects and industries.
Cons of Contract Roles:
- Lack of Security: Temporary nature leads to uncertainty.
- No Benefits: Absence of traditional employee benefits.
- Continuous Job Search: Need to constantly seek new opportunities.
Making the Right Choice for Your Career or Business
For candidates, assess your individual circumstances. Do you need the stability and benefits of a permanent role, or do you value the flexibility and higher pay of contract work? Consider your long-term career goals and personal situation. For instance, if you’re returning to the workforce after maternity leave, a contract role might offer the flexibility you need.
If you’re running a business, evaluate your business needs. Do you require long-term stability and retention of institutional knowledge, or do you need to fill short-term skill gaps? Contract roles can be an excellent solution for bridging gaps and managing economic uncertainty, while permanent roles are ideal for building a stable, committed workforce.
Permanent Role vs. Contract Role: Which is Best?
There’s no one-size-fits-all answer to the permanent role vs. contract debate. It ultimately depends on your individual or business needs. At Godfrey Group, we specialise in matching the right talent to the right roles, whether permanent or contract. Our extensive network of professionals and our deep understanding of the financial services industry allows us to provide tailored solutions that meet your unique requirements.
Ready to explore your options? Contact us on 02 8004 9350 to discuss your career or hiring needs.
