Advantages & Disadvantages of Being a Contract Employee

by Rene Dale; Updated September 26, 2017
Contract employment is a career move worth considering.

Job satisfaction has many facets. The work involved, the pay rate and the hours are dominate considerations for most job seekers. However, the decision to accept a position as a contract employee might also be a deciding factor in whether or not a particular job will be a gratifying career move. Contract employees are not permanent employees of a company but rather temporary personnel hired for a specific contract period. Weighing some of the advantages and disadvantages to becoming a contract employee might aid in deciding whether or not it is the right move for your career goals.

Independence and Flexibility

Most often contract employees are afforded greater flexibility in scheduling than permanent employees. Contract employees are more likely to make their own scheduling decisions so long as work is performed on time and to standard. This advantage is appealing to those wishing to control their own schedule and achieve greater work-life-balance than could be achieved if their schedule were dictated. However, such flexibility might be difficult for someone who prefers set time constraints and predictable scheduling.

Better Pay for Actual Time Worked

Contract employees often don't have to adhere to regular employee policies such as office meetings and time-consuming events. These employees are seldom affected by corporate red-tape and interoffice politics, which means they can actually spend their time producing the work they are being paid for in the least amount of hours. In theory this amounts to better pay because less time is being wasted on non-performing activities. Contract employees often work from locations other than the contractor's office, and many such employees telecommute, which adds up to less time spent traveling to and from work and more time producing.

No Employer Benefits

Contract employees do not receive employer-paid benefits such as group health insurance, paid vacation and sick leave or 401k programs. Contract employees must acquire their own insurance and retirement accounts when they chose not to become a permanent company employee. These expenses could reduce any pay advantages a contract position carries over a permanent employee position.

Job Security

The biggest disadvantage to becoming a contract employee is the perceived lack of job security involved with taking a position that will expire in a set amount of months or years. What happens when the contract runs out? Michelle Goodman, Freelance Columnist for ABC News, offers some insight when she says, "in the world of contracting, you quickly learn how to stay relevant, nimble and imminently employable -- or you don't eat." Most contractor employees are well aware of how to attract and obtain other contracts when the time comes and are therefore considered a bit more job secure than permanent workers whose stakes are tied to just one position at one company.

About the Author

Rene Dale is a writer with more than a decade of financial services experience. She has worked in personal finance, mortgage lending, credit repair and financial analysis. Dale holds a Bachelor of Science in finance from the University of Tampa.

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