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Contract V Permanent Positions – Pros and Cons

By Ronan on August 16, 2016 in Latest News

When looking for a new position one of the important decisions you will have to make is whether to go for a contract or permanent position. You might be familiar with the basic concept of each but which one is best for you?

For those trying to decide for themselves, employers considering the best way to hire staff for their projects or those just curious we break down some of the main differences between contract and permanent positions.


Permanent Positions

A permanent position is a job where an employee’s contract with their employer guarantees a regular income on a long term basis as long as they meet certain conditions. The main advantage of permanent employment is, of course, security and stability. Needless to say this is the most common form of employment, and for a number of reasons:

The security of a regular income. This is one of the biggest reasons for people choosing to work a permanent position and is an understandable one. A set income coming in every month allows individuals to budget and gives them the peace of mind that they will not have a ‘lean period’ as contractors occasionally have to suffer. For that reason many former contractors who have family commitments or are further on in their career choose the increased stability of permanent employment.

Benefits and Bonuses. Of course, many employers chose to offer more than a salary package as part of their offering in order to attract the best candidates. In some cases those benefits, such as car allowance, health insurance and pensions, can outweigh the salary in terms of what attracts people to a job.

Career Progression. One attractive aspect of working for a regular employer is that many companies will have a set career path for their positions. This means clear goals to work towards in order to advance yourself in the company, knowing what qualifications you need and what position to train for. The clarity provided by this focused path can be ideal for employees who know early in their career what route they want to take.

Being part of a team. Although it isn’t the case that contractors never work as part of a team one of the big draws of permanent employment for some is the sense of community that comes from working and developing relationships with a team of people over a number of years. To some contractors, however, this is one of the big turn offs as they enjoy the variety of regularly working with different people on new contracts.



Contracting is when a company hires someone to work on a shorter term basis, for example, to complete a specific project the company has no internal facility for. The business you are contracting for acts as a client rather than an employer so working conditions, timescales etc. are all negotiated between the client and the contractor rather than being dictated by the company as they tend to be in permanent positions. Contracting is very appealing to those who desire a greater degree of freedom at the expense of greater personal responsibility. Some of the benefits to contracting are:

Greater potential earnings. Though there is technically less stability in contracting and the pay tends not to be a regular and consistent amount, the fact is in most instances more money can be made from contracting than from a permanent position. Contractors tend to be overall better paid than permanent employees as they don’t need to be paid any holiday pay, sick pay, insurance or any of the other usual costs to an employer that normally arise from having permanent staff.

Contractors can also make tax savings by running themselves through an umbrella or limited company, further increasing the potential profit they can make.

More freedom. Though projects will often be required to be completed to a deadline according to the contract, the actual working hours are usually up to the contractor. Many contractors enjoy this flexibility as it allows them to work around their personal commitments. This also means that contractors can take holidays when it suits rather than having to clear it with a business though in practice a holiday will need to be meticulously slotted in between jobs as no employer also means no holiday or sick pay.

Your own boss. While you will be working for a client in order to complete a project working as a contractor means you are essentially your own boss. This autonomy is another appealing part of contracting though being your own boss also means dealing with extra personal responsibility such as the need to conform to statutory regulations and manage your own tax affairs.

More variety. For many contractors the variety of types of work and people you work with that naturally arises from contract work is one of the main draws. Each project brings the excitement of starting a new job and many feel this keeps the invigorated and enthusiastic about what they do. The increased variety in work and working environments also tends to give rise to a greater variety of skills for the contractor along with generally greater proficiency due to the self-reliance required.

So which is right for you? Do you prefer the freedom and increased earning potential of contractor work or the security and stability offered by permanent employment? Are the economic conditions right for switching from one to the other? Each should be considered carefully before you decide which will work best.

James Gray Recruitment offer a wide variety of both permanent and contract positions, browse our vacancies or, to discuss further, get in touch and we will be happy to help.




About the Author

RonanView all posts by Ronan
I am the Civil Engineering recruitment specialist for James Gray Recruitment Ltd. I cover civil engineering, rail, utilities, water and groundworks and recruit for both Commercial and Operational Staff on a Permanent and Freelance basis.If you are looking for staff or an opportunity yourself contact me on:ronan@jamesgrayrecruitment.com +44 (0) 870 850 6113 or Mob: 07815625771