Why Contract Gigs Are the New Hiring Trend

In past decades, the market was such that employers had difficulty finding staff. With a shortage of qualified candidates employers had to bring in the closest they could find and then invest in training to keep up with corporate growth. After making such significant investments, it was much more economical to keep that employee over the long term. For the employee, job security was ensured in part due to the shortage of available replacements.

Contract terms leave employers in complete control of how they want to structure the service agreement. It also places them on the broader side of the negotiating table. Employers can dictate terms and salaries to a far greater extent. Candidates have to be more competitive. Having the edge over the competition often means taking a lower salary or negotiating on terms.  Skilled candidates come equipped with the qualifications and the willingness to advance their abilities at their own expense.

Job security is a thing of the past and today’s job seekers are starting to understand that.

It also used to be that a higher premium was paid to a contract worker, to compensate for the perks and benefits that they were not receiving. Many seekers of full time positions are taking contract jobs while continuing their search for a permanent role. This is saturating the freelance market, and driving contract rates down as well.

With contract workers now accepting projects at par and forfeiting premiums, it’s extremely economical for employers to go this route.

By hiring contract workers and paying them similar hourly or weekly rate as they would pay an employee, they are saving enormously on source deductions, pensions, and benefit plans. They are also reducing their accounting costs, as the freelancer has to take care of his own tax submissions, etc. In extreme situations, the worker is actually required to submit an invoice and wait 30 days to be paid. This has a monetary impact also, with the money earning interest in the company’s bank account for a longer period of time.

Like any other economic debate, the market dictates the outcome. Job-seekers now have to consider contract work as a viable option and include temporary positions on their list of target opportunities…at least until the pendulum swings back in favor of full-time employment.