Advantages and Disadvantages of Contract Employment

According to a report from Channelnewsasia, interest in hiring contract staff is raising in Singapore. To some job seekers, whether the position offered is permanent or contract is immaterial. Some have even touted the benefits of contract employment over traditional permanent employment. Is this logical thinking or a fallacy? Should workers fight for their iron rice bowls?

Advantages

Contract employment can come as short as 6 months and last up to 2 years, with an option to renew by the employers. The advantages of contract employment can be summarised as:

  • More jobs available for job seekers;
  • Less barriers to entry;
  • Higher gross salary;
  • Flexibility for employee to “move on” / career planning; and
  • No personal guilt when job hopping.

Disadvantages

  • Lack career path; and
  • Lack job security.

Conclusion

Surprise surprise! I actually can’t come up with too many disadvantages of contract employment. Having said that, my opinion is that what’s best for you is very much dependent on your life-stage. When you first join the workforce, any job will do and contract or permanent doesn’t really matter. In fact, contract seems the much better choice for the first few years of your career. As you mature and focus on career planning, contract again seems a good choice as it provides mobility to “jump” when opportunities presents itself, without self-guilt.

When family planning comes along, income and stability takes priority, thus a contract option which does not provide job security is undesirable by many. It is this uncertainty which subconsciously tilts us towards preference for permanent employment. However when we think about it objectively, when workforce downsizing occurs, the probability of a contract staff being retrenched as compared to a permanent staff is actually lower, so contract workers may in fact have higher job security.

I think ultimately if you are a performer at work, contract or permanent shouldn’t bother you at all. If you are a “player” at work, you might want to consider that permanent job offer. The pitfall to avoid is not to take on short-term (6 months – 1 year) contract as this doesn’t build your resume and may in fact reflect negatively on your personal image (taking on any jobs).

All in all, this trend to hiring contract staff could indeed provide a net positive effect for middle class workers in Singapore. NTUC, ball is in your court.

Note:

Some might argue that a more objective method of assessing the attractiveness of contract employment should be a point by point comparison with permanent employment. Well, since both does not fundamentally guarantee employment, it is immaterial.

Resources:

http://www.channelnewsasia.com/stories/singaporelocalnews/view/1220081/1/.html

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