Permanent versus contract

by 01 May 2007

Q. I have just been made redundant from my role. I am now at the stage in my career and life where I want a bit of flexibility. I am thinking about contracting, however, I am worried that if I contract for five years I may not be able to return to the permanent market in a good role. What is your advice?

A. The HR contract market in 2007 so far has been very buoyant, with a consistent flow of roles across all areas. This, in turn, is making more senior candidates confident to consider contracting as an alternative to permanent work. In addition, the Australian market is following the trend of the UK, where people choose to be professional interims more often than not, utilising a peer network.

As a result, the contracting market has taken on a new feel. Rather than being just a quick fix; it is now viewed as an opportunity to employ high quality staff to implement new ideas and initiatives in a short period of time.

Whether you have been made redundant are returning from overseas or just having a career break, contracting for a few years can give you experience in a number of different industries and environments which you would otherwise not be exposed to.

This has a distinct advantage as employers are now focusing on individuals who can bring new ideas and business processes to their organisation. Having this on your resume will broaden your skill set in a shorter period of time. Then, when you choose to return to permanent work you will be further ahead of where you may have been if you had stayed in a permanent role.

Over the last few years, the Australian market has seen a number of major mergers and acquisitions and as a result, the volume of redundancies has increased.

The follow on effect has been an increase in candidates looking at the contract market as a chance to gain skills quickly and take some time out to try different roles before they commit to the permanent market again.

Contracting also allows flexibility in a role, which can be very attractive to a lot of people. As salaries start to sky-rocket then level out due to professionals being paid maximum levels in the current market, the flexibility of a contract is a strong negotiating tool for many. This in turn, is attracting highly skilled people back into the workforce and organisations are even looking at longer term contracts rather than permanent positions to incorporate these people.

If you want to re-enter the permanent market after you have contracted for a few years, you have to be careful what contracting roles you take. You can look at contracting in two ways. Either as a stop gap while you are searching for a permanent role or as a longer term option. If it is the former, a role lasting a few weeks is fine, however, if it is the latter, then be sure it is a longer term contract to add value to your ‘interim’ resume.

Due to the current market being candidate driven, candidates have been interchanging between contracting and permanent work with relative ease. One factor you will have to consider is that in five years from now it could be a very different market. If you are trying to re enter in an ‘employers’ market, you might come up against some clients that prefer to see candidates with a history of permanent roles. The positive aspect is that HR is starting to place a lot more emphasis on what skills can be brought to the organisation rather than continuing the permanent equals ‘good’, contracting equals ‘bad’ mindset of the past.

If you are concerned how it will individually affect you, contact a consultant that can review your resume and give you advice. It will depend on your previous career history and the level of experience you have.

By Renee Bernays, senior consultant, HR Matters