When looking for employment, there are two main types of roles: permanent vs. contract. Both offer advantages and disadvantages, and the decision between them can be a significant factor in one’s career trajectory.
Contracting over the past decade has become increasingly popular among skilled workers. 2023 is a year of change, and Australians are more confident than ever about reevaluating their careers and trying something new. As technology advances, there’s a higher demand for digital skills. Approximately 10.6% of Australia’s workforce is now self-employed, a big jump from 10 years ago.
How do you decide between Permanent vs. Contract roles?
Your preference towards contracting or permanent employment may be in flux throughout your career. Why? Changing priorities, choices, life and career stages, and market trends might be some of the reasons. Job seekers often ask us if they should take a contract role, especially when they compare their annual salaries with the “potential” earnings of contract roles. Permanent & Contract roles have pros and cons; understanding them is essential to make the best-informed decision for your career.
In this blog, we will explore the differences between permanent and contract roles, highlighting the benefits and drawbacks of each.
What is a Permanent Role?
A permanent role is a long-term, full-time or part-time position that provides job security and a range of benefits. Permanent employees are entitled to paid sick leave, annual leave, and paid public holidays. They also receive superannuation, a form of retirement savings, and other workplace entitlements such as workers’ compensation and notice periods before termination.
Advantages of Permanent Roles:
- Job Security: One of the main advantages of a permanent role is the job security it provides. Employees can feel confident that they have a stable job with a guaranteed income.
- Benefits: Entitled to a range of benefits, including paid sick leave, annual leave, and superannuation. These benefits provide financial stability and security.
- Career Advancement: Offer opportunities for career advancement within the company. Employees can work towards promotions and may have access to training and development programs.
Disadvantages of Permanent Roles:
- Limited Flexibility: Typically come with a set schedule and less flexibility than contract roles. This can make it difficult to balance work and personal life.
- Limited Variety: Depending on the company and position, permanent roles may offer limited variety in tasks and projects. This can lead to a lack of diversity in skills and experiences.
What is a Contract Role?
A contract role is a temporary position that is often project-based. Contract employees are not entitled to the same benefits as permanent employees, and are paid on an hourly or project-based rate. They may have a set contract duration or work on a project-by-project basis.
Advantages of Contract Roles:
- Flexibility: Offers more flexibility than permanent roles. Employees can often set their own schedule and have more control over their workload.
- Variety: Often offers a wider variety of tasks and projects, which can lead to a broader range of skills and experiences.
- Higher Earning Potential: Typically pay more than permanent roles, as they do not offer benefits and are project-based.
Disadvantages of Contract Roles
- Job Insecurity: Temporary and offer less job security than permanent roles. Employees may have to continually seek new contracts and projects.
- No Benefits: Not entitled to the same benefits as permanent employees, which can lead to financial instability and a lack of security.
- Limited Career Advancement: Typically do not offer opportunities for career advancement within the company. Employees may have to seek out new contracts to advance their career.
When deciding between permanent and contract roles, it is important to consider the advantages and disadvantages of each. Permanent roles offer job security, benefits, and opportunities for career advancement, but may lack flexibility and variety. Contract roles offer flexibility, variety, and higher earning potential, but come with job insecurity and no benefits. Ultimately, the decision between the two will depend on individual circumstances and career goals.
Compare your Permanent vs. Contract salary & tax advantages
Here are a few tools to compare your permanent and Contractor salary and tax advantages. Comparison to see payout benefits working as a Contractor vs a permanent role.
- Salary comparison to see what will be payout benefits working as Contractor – http://www.bigdream.com.au/salary-compare
- Getting started to work as a Contractor – https://www.ato.gov.au/individuals/working/working-as-a-contractor/
- Employee or contractor – tax and super obligations compared: https://www.ato.gov.au/Individuals/Working/Employee-or-contractor—what-s-the-difference/Employee-or-contractor—tax-and-super-obligations-compared/
So, which is better for your growth?
Join us in our upcoming CandidateConnect webinar, “Permanent vs. Contract Jobs in these uncertain times”, on Friday, 5th of May 2023, from 12:30 PM – 1:30 PM. In this session, we’ll dive deep into today’s job market, and our panel of experts will share their insights and experiences and answers to your questions. Register now to secure your spot and receive updates on the event.