With tightened IR35 regulation, more people have been hired as Fixed term Contractors (FTCs) directly onto payrolls, rather than day-rate contractors. As the UK flirted with recession, many companies opted to follow this route rather than commit to taking on a permanent employee.

It seemed the logical move at the time, but what are the long-term implications for an FTC contractor in such a situation? Is it better for them to seek a permanent role?

Now, with a perceived strengthening economy, some FTCs are being offered the opportunity to convert to permanent appointments. In this blog we examine the pros and cons from a candidate’s perspective. Are you ready to commit? What are the financial implications?

Pros of converting to a permanent role (for contractors)

Job security: Much as you might feel an illusion of choice as a contractor, you will have likely experienced enough quiet periods to understand the security of a perm role.

Benefits: Healthcare, pension plans, and paid time off to permanent employees – all that adds up. As a contractor you feel an obligation to keep working 24/7.

Career progression: This is not often discussed, but perm employees are often moved internally. Contractors need to be deep into their function, but there may not be variety.

Training and development: It is in an employer’s interest to develop their people – contractors miss out on the element of learning alongside their colleagues.

Sense of belonging: There is much to be said for the value of purpose at work. Contractors know that they are expendable, so rarely get overly attached to those that they work with.

Cons of converting to a permanent role (for contractors)

Less flexibility: This is the big one. It is tough to get used to the fact that you have no flexibility to take that dream project if you so wish. The fixed hours and probable fewer days to WFH are also a turn off.

Lower remuneration: When you work as a contractor, the switch to a monthly salary often means a drop in real salary per unit of time worked.

Limited variety: Contractors can (in the current market) pick and choose to work on a wide variety of projects, whereas a perm role can be somewhat more restricted in its scope.

More responsibilities: Permanent roles involve more responsibilities, meetings, performance reviews and various other corporate expectations.

Everyone’s individual circumstances will vary, so the answer to this question is not a simple one. You will likely have your own thoughts about each of the considerations above. What is most important for you and your life – both for now and in a few years’ time?

We are working with lots of FTC candidates who are making similar moves. If you are in the market for a move, give us a call. We might have exactly the right role for you. You can also get in touch with David Howell if you would welcome an impartial perspective.