The word on the street in Silicon Valley is that we are currently in a “gig economy,” that is, more and more people are opting for contract work as opposed to traditional full-time employment. According to new research, conducted by labor economists Lawrence F. Katz and Alan B. Krueger, between 2005 and 2015 the number of Americans seeking alternative work arrangements swelled by 9.4 million. The large move towards contract employment can be explained by several factors from the need of flexible work hours to increased autonomy.
But, if you find yourself thinking about joining the growing ranks of contract workers, you need to first understand the pro and cons of this kind of work.
PRO: Potential for Higher Earnings
Hiring contractors provides the flexibility companies need as it saves time, money and resources. Companies are also going to hire you because you’re an expert in your field. You know what to do and how to get it done in a timely manner, which is what companies look for in contractors. It is important to understand that most contractors are considered experts in their fields, so you will be rewarded for your expertise.
CON: Increased Uncertainty
The potential for higher earnings is a great benefit of contract work, but there’s no guarantee you will keep working once a contract expires. And since the nature of the work you’ve been hired to do is finite, you have no guarantee that you’ll make the money you thought you would. Another other thing to consider is that the project you were hired to work on can be unexpectedly cancelled. All of these factors can add up to increased financial instability --if you’re not working, you’re not getting paid. And finally, there’s no way of knowing the amount of time you’ll spend between contracts.
PRO: Lifestyle Flexibility
According to Randstad’s Workforce360 Study, about 86% of independent contractors reported their level of job satisfaction to be good/excellent. With contract work comes more freedom, you’re able to control your career path without having to wade through office politics for a promotion, pay raise or time off. You negotiate to get the employment packages that suit you the most, and you take as much or as little time off in between contracts. If this type of flexibility is appealing to you, this will help boost your professional and personal satisfaction.
CON: Outside Looking In
All that flexibility may be nice, but the price you pay is that you’ll always be the outsider. Contract work makes it difficult to create ties, connections which might help advance your career further down the road... There’s also the lack of social engagement. As we all know, you spend more time at work than at home, so your social life tends to stem from your work life. Some in-house employees may not be inclined to get to know you because you’ll be with the company for a limited amount of time.
PRO: Increased Technical & Professional Knowledge
You’re the expert in your field and have a certain skill set that companies in your industry want. But, contract work also provides the opportunity to sharpen your expertise and work in different sectors. It allows you to broaden your experience in your field and perhaps gain new skills in other industries while you’re at it. You’re at liberty to choose the skills that you would like to further develop in other industries, allowing you to enhance your CV and marketability for future jobs. It can also be part of your story when explaining an employment gap to a potential employer.
CON: Career Development
The freedom provided by contract work to broaden your technical and professional skills means that you are in charge of your own development. Great, right? Maybe not. Although it feels empowering to be in charge of your own career development, it is a heavy burden to bear. You no longer have the human resources department or a talent management team to ensure that you’re properly trained and qualified for the job. It is now up to you to make sure that your skill set is up to par with the current trends of the industry.
Like everything in life, contract employment has its benefits and drawbacks. Although it is not a career long plan, if you’re returning back to the work force or need a flexible work arrangement, contract work might be a viable option.