Remember the good old formula for success? Have a stable job, a stable income, work hard and you’ll climb the ladder. Well, times have changed and that notion grows obsolete with every passing day. We find ourselves in a fast paced economy where money can be made quick and stability can be boring. This new gig economy is seeing more people opting for short-term employment than settle for a full-time job. With work from home and workations in trend, there’s more reason for people to offer their skills remotely to a variety of clients rather than work the regular nine to five. Sure, the instability and lack of incentives is a cause of concern for every contract worker, but people are willing to take that risk because of the pros of being contract employees.
Being a contract employee gives people the freedom to choose between multiple projects at any given time. This is attractive for those who want to monetise their various skill sets. Moreover, freelancers get to set their own work timings, choose who they work with, and enjoy a greater work-life balance. Freelancers potentially earn more since there are no deductions for company benefits like insurance. Companies are also open to short-term employment options because it means not having to pay a fixed salary, having fewer employees when business is down and not having to pay the benefits that full-time employees enjoy. Small businesses especially benefit from hiring contract workers because they can access the same talent that major players hire without having to pay overheads to house full-time employees. Large companies can hire contract employees with specialized skills needed for a specific task or short-term project. Sounds like a win-win situation for employers and freelancers, right? For the most part, yes, but there are also downsides to short-term employment.
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Contract employees often trade a stable income for flexible employment opportunities and work-life balance. However, they can be easily overwhelmed when there’s too much demand. On the flipside, there’s the stress to find new clients when projects dry up. This is especially concerning when one has a family to support. Contract employees do not get the benefits of healthcare, overtime, sick days, etc. which otherwise make full-time employees feel safe. Short-term employment also comes with the risk of unfair work and exploitation. Highly reputed organizations should have strict policies to avoid any ethical issues between employer and contractor.
While companies profit from hiring contract employees, the benefits of having full-time employees isn’t lost on them. In the long run, full-time employees are more loyal to the company, can develop company-specific skills, and will learn to take up leadership roles while staying true to the company’s values.
The benefits outweigh the risks and the gig economy is here to stay. Organizations must assess what kind of employment model suits them and make changes to their hiring policies accordingly. Some companies follow a contract-to-hire model which allows contractors to become full-time employees should the terms be favourable for both parties.
References:
- The Hard Choice Between Contractors And Full-Time Employees | Dann Albright | December 2019
- 3 Factors When Choosing Between a Contractor or Full-Time Employee | John Boitnott | 4 August, 2015
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