The word on the street in Silicon Valley is that we are currently in a “gig economy.” What that means is that more and more people are opting to work as independent contractors, 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 swing toward contract employment can be explained by several factors, such as the need for a flexible schedule, to the desire for 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.
The Pros and Cons of Contract Work
PRO: Potential for Higher Earnings
Companies looking to hire contract staffing because it provides the flexibility they need, it saves time, money and resources. However, they are looking to hire experts, not neophytes. They do not want to invest in training or other onboarding expenses. A contractor who knows what to do and how to get it done in a timely manner is worth top dollar. They come in, do the job and don't put any further drain on company resources.
CON: Increased Uncertainty
The potential for higher earnings is a great benefit of work-for-hire, but there’s no guarantee you will keep working once a contract expires. (no guaranteed job security after contract) 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 thing to consider is that the project you were hired to work on can be unexpectedly canceled. 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, or during your next job search.
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 this kind of work arrangement, comes more freedom. You are 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 best, and you take as much or as little time off in between contracts. If this type of flexibility is appealing to you, then contracting out may be the best of all worlds.
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 connections that might help advance your career further down the road. There’s also the fluid and ever-changing nature of social engagement at work. As we all know, you spend more time at work than at home, so your social life tends to stem from your work life. Relationships are fleeting and long term bonds are rarely formed.
PRO: Increased Technical & Professional Knowledge
You’re an 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. 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 skillset is up to par with the current trends of the industry.
Like everything in life, contract employment has its benefits and drawbacks. Although it might not be a career-long plan, if you’re returning back to the workforce or need a flexible work arrangement, contract work very well might be a great option. Although there’s no fixed amount of time you can guarantee being unemployed between contract positions there are definitely a lot of pros to short term positions.
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