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Benefits of perm jobs vs contract

  • Last Updated:
  • May 16th, 2021 8:50 pm
[OP]
Jr. Member
May 25, 2018
149 posts
30 upvotes

Benefits of perm jobs vs contract

It used to be the case in the olden days that once you got hired by a company you were pretty much set for life.... during downsizing employees were offered pay cuts or moved to a job requiring other complementary skills the employee has with often reduced pay.

Fast forward to today and things have obviously changed.

A "permanent" employee could be let go after 3 or 4 years.....or even less.

In what ways are a "permanent" contract better than a contractor with an hourly rate besides labor law protections?
15 replies
Deal Guru
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Mar 23, 2008
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Speaking as an IT contractor...

Benefits to being an employee
Paid benefits
Paid holidays/vacations
Paid sick days
Training provided by company
Not having to look for a job every year or two
Not having to be your own business manager (taxes, insurance, etc)
Depending on the business, being one of the first to be let go in down-times

On the plus side for being a contractor
More money

C
[OP]
Jr. Member
May 25, 2018
149 posts
30 upvotes
CNeufeld wrote: Speaking as an IT contractor...

Benefits to being an employee
Paid benefits
Paid holidays/vacations
Paid sick days
Training provided by company
Not having to look for a job every year or two
Not having to be your own business manager (taxes, insurance, etc)
Depending on the business, being one of the first to be let go in down-times

On the plus side for being a contractor
More money

C
Another pro of being an IT contractor:
Less office politics

On the flip side contractors aren't eligible for share purchase plans or annual bonuses.
Newbie
May 10, 2021
14 posts
11 upvotes
Been through both Contract and Permanent IT roles.

Permanent:
Vacation days/Paid stat days
Bonus
RRSP matching
May be pension plans
Flexibility with work hours based on experience or years on the jobs.
Training

CONTRACTOR:

Makes more $$
Write off Expenses
Less office politics !!!!
Meet new people, work with various technologies
Always kept up to date and learning.
Hardly bored due to changing nature.
NO performance reviews !!
Deal Addict
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Mar 7, 2007
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What is a contractor, in the context of this conversation? There are different "levels" of contractors.

Unfortunately, some people are contracting at the lowest level of the scale, making just a bit more than minimum wage, and with no benefits, job security, or training because they are "contractors". They work in an "office" but remind me of the Seasonal Agricultural Worker program. Capitalism at its worst.

On the other hand, a contractor with specialized skills that happen to be in demand can be much better off than a FTE.

At the end of the day, sometimes the grass appears to be greener on the other side.... until you move to the other side...
Deal Addict
Jul 30, 2003
1953 posts
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Toronto
As an employee, the main benefit is career growth and moving up the laddar.
Deal Guru
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Mar 23, 2008
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Edmonton
zero_ wrote: As an employee, the main benefit is career growth and moving up the laddar.
Except that as a contractor, I make more money than any manager that I've reported to... Moving up the ladder isn't all it's cracked up to be. Depends on what your focus is.

C
Deal Addict
Jul 13, 2009
4813 posts
2946 upvotes
motomondo wrote: What is a contractor, in the context of this conversation? There are different "levels" of contractors.

Unfortunately, some people are contracting at the lowest level of the scale, making just a bit more than minimum wage, and with no benefits, job security, or training because they are "contractors". They work in an "office" but remind me of the Seasonal Agricultural Worker program. Capitalism at its worst.

On the other hand, a contractor with specialized skills that happen to be in demand can be much better off than a FTE.

At the end of the day, sometimes the grass appears to be greener on the other side.... until you move to the other side...
In this thread sounds like a lot of IT contractors here. They're essentially consultants, specialists and experts in a particular area of IT like implementation, project rescue, audit, or a lot of project work that has limited time span.

IT Contractors go for $50-$200/hr, far from minimum wage and some are treated like princes/princesses....How are they able to charge soooo high? Cutting out the middleman known as consulting firms, firms charge $300-$5000/hr for similar work but fielding sometimes less experienced workers, that's capitalism in the works there.....

Companies hire contractors if the project is limited in time and scope, 2-3 years to complete something, full time permanent hire would carry extra costs and what if you don't have work after year 3? Lay them off and pay severance? No one wants that.

IT Contractors have to manage themselves like a business though, looking out for next gig, networking with friends to work on projects/clients together, upgrading skills to stay in demand. The money is great but some eventually find it tiresome to keep up with long hours, travelling, looking for next gig, , and settle down full time in later half of their careers.
Deal Fanatic
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Mar 10, 2005
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Pro of contracting

lots of variety (get to work in different industries, positions, projects...etc)
If your are a go getter, this is the best way to take charge of your career
$$
less politics

Con
I think the biggest down side especially over the past few years and speaking of technical roles only is the speed of change and having to keep up with the latest trends. It can be a real challenge, you will have to pay for your own training
Obviously you will have to pay for benefits unless your spouse can cover

If you are young and especially if you have no dependents, the choice is easy. Contracting is the way to go
“...because most of what we say and do is not essential. If you can eliminate it, you'll have more time and more tranquility. Ask yourself at every moment, is this necessary…” -Marcus Aurelius
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Jun 27, 2006
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blexann wrote: Pro of contracting

lots of variety (get to work in different industries, positions, projects...etc)
If your are a go getter, this is the best way to take charge of your career
$$
less politics

Con
I think the biggest down side especially over the past few years and speaking of technical roles only is the speed of change and having to keep up with the latest trends. It can be a real challenge, you will have to pay for your own training
Obviously you will have to pay for benefits unless your spouse can cover

If you are young and especially if you have no dependents, the choice is easy. Contracting is the way to go
I think it is the other way. If you are 24, not a lot of companies are going to pay a premium for your skills; yes, there are some people who are extremely talented and in demand but that is not most people. After working X years, most people, will develop the skills and knowledge to be a contractor, whatever the field; people like to think of IT but this applies to all areas of a business. As people get older, I believe that they need to be willing to move into the contracting world. It may be forced onto them. As more companies focus on managing costs, the chance of being able to retire at a company that you have been at for over N years is less likely. Once you past that best before date, it will become harder to get those roles that people once had as it will be cheaper to find someone younger. Hopefully, people aren't put into that position as not everyone has that mindset but it is also a reality that many will face.
Deal Guru
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Mar 31, 2008
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I'm not IT but in older age, I'd love to just do contract work for about 8 months then spend Jan-April somewhere warm.
Sr. Member
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Oct 2, 2018
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1) Direct employee hire is the traditional role, many companies are reducing operating costs so this is getting harder to find every day.

2) Direct contract to company was next, usually includes benefits, vacation pay and bonus. Good for everything minus severance should worker reductions take place. Can include pensions, companies will utilize to try out skilled workers and potentially move to full time employees in the future.

3) Sub-contractor is the company hires staff through a separate company, so the 2nd company takes a very big cut and while some sub contractors will provide some benefits others do not. In many cases the wages are lower here as the sub contractor takes a large portion.

4) Consultant/Contract has advantages in itself, reward is usually great money but downsize is finding enough contract work.

This is what I understand happening over the last 30 years or so, companies wanting to shrink operational expenses and transfer those costs to capital outlays which are more controllable and has tax benefits.

Thoughts?
Last edited by Ballroomblitz1 on May 16th, 2021 10:18 pm, edited 1 time in total.
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Oct 26, 2003
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contractor makes more money and perm job have more job security, looking for the next gig as contractor can be hard when there isn't a gig available
WTB amazon gc @90%
Member
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Dec 28, 2010
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Is it really more money after you account for all of the benefits/bonus?
mysticalinfluence wrote: Brah do you make 100K year too and wear Canada Goose? You might not be fat but your fattest douche bag on RFD.
kenchau66 wrote: you mean "you're"
Sr. Member
Sep 7, 2009
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I prefer my perm jobs to be more light and wavy, Korean style.
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Mar 23, 2008
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kenchau66 wrote: Is it really more money after you account for all of the benefits/bonus?
Even taking into account bonuses, the job offers I’ve received have been at about a 30% reduction from my contract rate. And I get medical/dental from my GF’s job, so I don’t have to cough up for those. So I’d go with yeah, it really is more money.

C

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