Five Comparisons Between Contract and Permanent Roles

There was a time I harbored a deeply-rooted prejudice against contract positions. I saw them as second-class at best, expendable at worst. What self-respecting developer, I thought, would allow himself to take up a contract position? A decade later, I would be disabused of this ill-informed notion. A year or so in a contract position, coupled with several tempestuous years in permanent positions, has taught me differently. There are differences, of course, but these differences are neither good or bad; it all depends on the context.

1. Job Stability

There's this myth going around that contract positions are inherently less stable than permanent roles. That's true on the surface, but being professionals and all, let's try to look deeper.

Unstable?

The typical contract's duration runs from six months to a year. During this time, while theoretically the company reserves the right to terminate employment at any time, most employers are notably reluctant to do so without good cause. ("Good cause", in this case, means a serious breach of professional ethics or extreme negligence, which is grounds for immediate termination regardless of whether you're a contractor or permanent staff.) Thus, if they think you're underperforming and want to get rid of you, all they need to do is wait out your contract's duration and at its conclusion, inform you that it will not be renewed. However, there is no such option in the case of permanent employees. Therefore, the only other recourse is to fire you, or make your position so untenable that you voluntarily resign.

Job stability? Job security? It's all an illusion. The only job security you can realistically have is what you make for yourself. If you understand and have what your industry needs, it won't matter if you're employed; you'll be able to get out there and land a job just like that. That's security. Anything else is bullshit.

Also, consider this. The typical software project is transient in nature. It runs for an allotted time, and once it's done, the company needs to find work for the permanent staff member in order to justify his stay. For the contractor, there is no such problem. He simply sticks around for maintenance until his contract is up, and then he leaves. No fuss, no muss! At an interview, hiring Managers get suspicious if they see that the applicant has not been in any company more than a couple years. They will ask no such questions of the contractor because they understand that this is the nature of contracts, i.e, they run out when the project is completed.

2. Career Progression

As a contractor, you are outside of the company's corporate structure. Therefore, there is no meaningful way to promote you. The best you could hope for would be some unofficially senior status.

That's true enough, no argument there. Where I differ from many people is whether or not that is a bad thing.

You're not part of this game.

You see, the entire point is about being outside the company's corporate structure. This basically means that you're probably going to be excluded from all the office politics going on within the corporate structure. That's because, being a contractor, you're not a pawn. Hell, you're not even on the chessboard!

I've been in a permanent role before, where my colleague took every opportunity to upstage me and look good at my expense. That was because she needed to look good to the higher-ups. There was a vacancy in Management and she wanted that promotion. (Spoiler: She did get promoted. I don't think she enjoyed it much.) Years later, I am a contractor surrounded by other contractors. None of us waste time with silly games of one-upmanship. I don't have to be afraid of being stabbed in the back or of people scoring cheap political points off me. Because there's no promotion up for grabs, or even a possibility for conversion to permanent status. We are all contractors and we will remain contractors no matter how good we look. There is nothing to gain.

Besides, just because you don't get a fancy job title and a huge paycheck, does not mean that there is no career progress. I'll expand on this point another day, but career progress in tech should be measured by the value of the work you produce.  Anyone clueless enough to measure your career progress by what's printed on your business card, probably doesn't have anything meaningful to add to the conversation.

3. Benefits

Contractors don't get as many benefits as permanent staff. On the flip side, they do generally get paid more, since these benefits cost the company money, money that the company does not have to spend on the contractor. Again, whether or not that is a good thing depends largely on what you need.

More vacation days.

More annual leave? What would I do with it? I spent most of my time in the swimming pool or library anyway.

More sick days? You're talking to a guy who once went a stretch of eight years without needing to take a single sick day.

Insurance? What, you don't have your own insurance policy and need the company's coverage? Something's not right here.

Training? You actually depend on your company to provide you with training? What is wrong with you?!

Bonuses? Here's a sobering fact, my friend: ever since the Singapore Government mandated that the annual bonus is entirely at the company's discretion, several SMEs, all at the same time or thereabouts, declared themselves too cash-strapped to pay bonuses. Annual bonuses either shrunk drastically or outright disappeared. And in many cases, they never came back.

Also, there's the question of how much one really needs a year-end bonus.

Sure, a sum of money at the end of the work year is nice to have. But I don't need it. Without it, I'm not going to starve or even be mildly inconvenienced. I barely spend a quarter of what I make, and at the end of the year there's always enough money for Christmas treats for the family and insurance payments. You know about monthly bills? Those things that arrive in your mailbox more regularly than the typical menstrual cycle? There's an awfully good reason why they're called "monthly bills" - they arrive monthly. Not once a year. If you live your life in such a way that you're held hostage by the availability of a year-end bonus, the problem is not the bonus.

Besides, I've worked for companies in a permanent role, where I got ten days of annual leave a year and no bonus. To hell with the supposed benefits for permanent staff. Just give me my contractor pay.

4. Prestige

The common perception is that contractors are contractors only because they're not good enough to be permanent staff. I can see why people would think that way- I used to, once!

The bar isn't lowered.

However, the entry requirements for permanent staff remain the same for contractors. Contract positions are not some kind of consolation prize for failing to land a permanent role. The bar doesn't get lowered for contract positions. If you're not good enough for a permanent role, you won't be good enough for contract work either. (Let's not talk about companies that put people in contract roles with the promise of a conversion to permanent status if they perform well enough. Those are tactics by desperate employers, meant for desperate employees. Pro tip: Don't be desperate.)

The fact is that contractors will be exposed to several different technological stacks due to working in different companies and different projects. That could be an enormous advantage, depending on who's hiring. The permanent staff member has no such luck; he has to stick around and work on the same technological stack for years - and if that ever gets deprecated, he's utterly screwed.

Also, major tech companies like Facebook and Google now have contractors as the majority of their workforce. That's the way the industry is swinging, and that reality is reflected in the way hiring Managers look at your resume. Contract positions are now an accepted norm rather than the exception.

At the end of the day, the company you're in matters more than whether it's a contract or permanent position. Being a contractor in a tech giant like IBM, for example, is objectively better for your resume than being permanent staff in some tiny, no-name operation.

5. Administration

Typically, a contractor needs to fill in and submit timesheets in order to get paid. That's annoying as all heck - any developer worth his salt would much rather be writing code - but I guess you could get used to it eventually. I know, after everything I've said so far, this is a minor inconvenience, at best.

That damn timesheet.

Still, compare it to the sheer pleasantness of having your bank balance credited without having to lift a finger if you're in a permanent role.

Conclusion

Would I take up another contract position? Yes, in a heartbeat.

Sure, all things being equal, I'd still choose a permanent position over a contract. Because I'm getting a bit too old to be running around job-hunting every couple years . But my disdain towards contract positions has all but melted away. I've come to see that contract positions hold a certain niche in the tech landscape, and it isn't going away anytime soon; rather, it looks to be growing. A tech professional could still ignore this option, of course... but keep an open mind. The day may come where a contract position looks like an attractive course of action. If you're ten to twenty years younger than me, you might want to give it a shot. What have you got to lose? You're early in your career, you're still making up your mind and finding your feet... may as well make it look legit.

As with all things, ignore what others have and stop being obsessed with "not losing out". Context matters. Consider your own needs and working style instead, and then decide what suits you, not other people, best.

Take up a contract. Expand your world. (heh heh)
T___T