March 17, 2010

Contract work - the way of the future?!

Over the weekend, I had an interesting conversation with a friend of mine who works in recruiting. We were talking about the changes to employment contracts and standards over the last 10 years and we both lamented that the shift from stable, permanent employment to unstable, contractual employment is problematic for both current and future generations of job seekers.

So why has there been a change?

Well, from an employer perspective, hiring on contract is very lucrative. It provides a more flexible employee pool as employees can be hired for fixed times for specific reasons (e.g. a new project).

And let's not forget the most important reason - it's cheaper. Not only are employees hired for a fixed period, but because of their status under employment legislation, contract workers aren't usually given the same benefits (e.g. health & dental, vacation, etc.) that permanent employees are given.

Thus, over the past 15 years, we've seen a gradual change to less stable contract employment. No longer do we have the halcyon days of employment where you left school, went to work for one employer for the rest of your life, and when you were ready to retire, your employer ensured a decent standard of living through a healthy pension and extended benefits.

Then again, it's debatable if that is even ideal, but regardless, contract work is the way of the future.

But is contract employment better than permanent employment?

Well it depends on who you ask.

Critics of contract work say that it's bad because there's no sense of security or continuity. Plus, moving around from contract to contract can really make your resume longer than it should be.

On the other hand you have people like Amanda Frank, who wrote on article on Monster discussing why contract work is better.

Here are the perks of contract work that Frank has identified.

1. Better share of the profits – earn more income per hour working freelance than for a company.

2. Control over time – pick up my 6-year-old after school, finish work after bedtime and save on extended daycare fees.

3. Variety of projects - the constant stimulation of working on something new.

4. Networking – meeting new people, which opens up new opportunities.

5. Be the boss – waste less energy playing office politics.

6. Indulge in creative projects – even if they won’t contribute to the bottom line anytime soon.

7. Wear many hats – never pigeonhole into one role or task.

8. Work from home – save money on parking and gas not commuting to an office.

9. Jobs come and go but skills are forever – keep developing your skills by working on contracts relevant to your expertise.

10. Unlimited growth potential – no glass ceilings or other corporate annoyances that impede career advancement.

Keep in mind that Frank wrote this article from the perspective of a mid-career professional who was laid off due to organizational restructuring.

Even so, I still agree with her assessment of contract work because the perks she identified are applicable to anybody - from those working a seasonal contract in a retail store to those who landed a government contract and even those that will be starting their own companies this summer under the Government of Ontario's Summer Company Program.

Of course, as Frank identifies, the real challenge is finding the next contract. But with proper budgeting and career planning, this shouldn't be a concern.

So in sum, let me say it quite simply ...

Face it, employers are moving in droves towards contract work!

Your best bet - accept it and realize it's not going away. And plan for it and expect that your career will likely involve contract work and be diligent with your financial budgeting.

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