Advantages of Contract-based Positions
(1) Higher salaries
As companies are not required to pay certain benefits to contract-based
employees, they are able to offer a higher salary to them, in view that they
cost much lesser than permanent employees. This reduction in cost provides
companies a viable alternative when facing a stagnation.
(2) Flexibility
As contract-based employees are usually bonded by lesser commitments, it offers
them the flexibility to travel or make other sudden arrangements with minimal
interruption to their work.
Advantages of Permanent Positions
(3) Security and stability
With permanent position comes a stronger sense of security. This source of
stability is often seen as a driving factor that boosts the performance of a
permanent employee, hence a popular strategy when companies recognise the need
to improve its performance. Due to the obligation to provide promotions,
benefits and bonuses, permanent positions are often perceived as having a
higher earning potential than contract based positions.
(4) Learning opportunities
Despite recent trends of job hopping, permanent position employees are
generally expected to stay in a company for longer periods. Companies are thus
more receptive to the idea of enhancing their skillset sending permanent
employees for trainings and learning opportunities. The additional skills
obtained can be useful to the individual in his/her career prospects or even
useful for developing new skillsets.
(5) Specialisation
Some job specialisations are too complex for companies to hire external
contractors. A good example would be the pharmaceutical industry, where
contract jobs are hardly available due to the need for a dedicated workforce
coupled with thorough researches. Such specialised workforce are not easily
replaceable by vendors and often sees only permanent positions available. This
sees a more permanent offering by companies.
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