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Contract VS Permanent: Can I make the switch?

Many people switch career paths between contract and permanent opportunities and there is absolutely nothing wrong with that. Everyone has different motivations for this move from opportunity to work environment to the lifestyle associated with contracting. I would like to discuss candidates who have been a long time contractor who are interested in permanent opportunities.


This is a trend I have seen more commonly as of late. Most candidates are alluding to the recent economic change we are experience as a motivating factor for long time contractors suddenly seeking permanent opportunities. This is great for a recruiter as it increases the candidacy pool for permanent opportunities and contractors often have a very strong technical toolset that many companies would be interested in. However it is not all good.


Candidates who have been contracting for a long time (or their entire professional career) should be aware of the ‘image’ associated with contracting. This ‘image’ I refer to is that long-time contractors do not want to remain with the same company for a lengthy period of time. That they like variety. And as I mentioned earlier this is not an issue but it is going to be a topic you are going to have to be prepared to talk about should you be looking at making a move from contracting into a permanent role.


WHY SHOULD I PREPARE FOR THAT?


The reason candidates should prepare to answer this question is that companies who are hiring (especially these days) are looking for employee retention. They are going to be looking for a candidate that wants to grow with the organization rather then fill a hole until the economy turns around. If you have been contracting for years and going from company to company, your resume may not demonstrate your desire to ‘settle down’ with one organization for a while. Add that to the fact that if you are using an agency to get placed, the company who is going to hire you is going to pay a premium fee to hire you - so any organization is going to make sure you want to join their team for the long haul.


The other big change between contracting and permanent opportunities that candidates need to consider is the difference in pay. Contracting obviously pays more then a permanent opportunity, however permanent opportunities can offer RRSP options, benefits, pensions, etc. These options are not available to you during normal contracts and as such they aim to offset the difference in pay.


Candidates who are switching from contracting to permanent should look to set realistic salary expectations when making this move. While demanding fair market value for your skill set is in your best interest, be aware that it is a different market and the market is currently dropping. Happy hunting!

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Views: 2220

Tags: Contract, Permanent, Recruiter, Recruitment

Comment by pam claughton on February 23, 2009 at 5:35pm
It hasn't been my experience that this increases the candidate pool for my jobs. I'd say 99% of my clients will not seriously entertain a heavy contractor background for a permanent position....not through a recruiter with a fee involved.
Comment by Julia Stone on February 23, 2009 at 5:48pm
I agree with Pam, my clients tend to run to the hills if someone has a steady contracting background and the candidate is suddenly interested in direct hire. They are worried that the "contractor" will be the first person out the door when things pick up and it doesn't matter if there is a recruiter fee involved or not.
The salary expectations are the least of my problems although you do bring up some good points.

In general you can assume that a good rule of thumb when comparing contracting rates to direct hire rates are as follows:

On average benefits for employees start at around. 30% being a W2 employee with about 3 weeks time off, 8 holidays per year and a reasonable medical plan that covers 75-80% of the employee.

If the employer adds in 401K, stock, matching funds, dependent health coverage, or other "perks" it can go as high as 50%.

Those numbers help me give independent contractors a realistic idea of what to expect as their salaries get lower.

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