U.S. lawmakers haven’t created many distinctions between full- and part-time workers (hence, my use of “full-time” throughout this article). If you run a local business that serves a local market, this can be crucial to your success. Your long-term, dedicated employees have a stake in your company and attract their friends and family members to your business. Today’s business leaders eventually all end up facing the contractor vs. full-time employee dilemma.

Ultimately, individuals considering contract work should carefully weigh the pros and cons to determine if it aligns with their career goals and priorities. While you can gain skills and experience through different positions, you don’t want to share too much information. It is important to note, due to the proprietary nature of some work projects, contractors may be asked to sign non-disclosure agreements. To maintain a strong reputation, contractors should keep the work they do private and confidential. Hiring contract workers allows companies to scale their operations up or down based on demand fluctuations.

Disadvantages of Hiring Contract Workers

At the same time, this flexibility in hiring also protects your core staff’s positions. That’s because you only hire independent contractors when you actually need them, they tend to be more current on the latest technologies and trends, and they offer diverse work experiences. Both parties agree on how the fee will be paid, but it’s usually paid at the end of the contract when all the work has been completed to the satisfaction of the business owner. Sometimes, a contract worker will request a deposit or a portion as a retainer. Most commonly, though, you’ll see an invoice from a contractor at the end of a project. Although quite different from the traditional payday-every-Friday model, the payment process for independent contractors is simple for the small-business owner.

As a contractor, workers have more control of their schedule and can work across industries and project types. Consultants don’t have to deal with internal politics; they’re simply hired to resolve the issue and can then choose to leave. This can lead to an increased number of contract workers being hired by third-party service providers. Of course, full-time employees often have greater access to health benefits, profit-sharing, vacation time, and other perks. Full-time workers trade off less flexibility for greater job security (though employers can provide certain perks like 9-80 scheduling). Experts anticipate the U.S. workforce will be 40% contract workers and freelancers by 2020.

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This means you have no obligation for federal, state or local taxes, Social Security or Medicare benefits, workers’ compensation insurance or unemployment taxes. Many businesses, both small and large, have made the mistake of misclassifying employees — and have paid the price in hefty fines, legal fees, retroactive payroll taxes as a result. Although the IRS has no absolute definition of either the independent contractor or the W2 employee, they do have a 20-point checklist to determine employee status. The classification difference between contract vs. full-time employees is vital.

• A professional salary negotiator walks through every piece of a real-world salary negotiation email sample to show you how to negotiate the best compensation possible.
• You may decide contract work is a better option if you believe you can better meet your financial and lifestyle needs through a contract position in your industry.
• As a contractor, you have the power to charge more than you would if you were employed by an organization.
• Not only does a general contractor have to worry about its own workers and operations, but it also has to worry about all of its subcontractors as well.
• If you believe you’ve been wronged, don’t hesitate to take legal advice to clarify your situation.
• You may also be required to sign an NDA (Non-disclosure Agreement) to enforce your confidentiality regarding the project.

As mentioned earlier, contractors, on the other hand, will need to take care of this on their own. The best part of being eligible for a fixed income is that it allows you to plan since you’ll know exactly when and how much you are being paid. Since you’ll be able to decide how much work you wish to take on and how many different clients you wish to work for, you’ll also be able to control your finances.

Organize Your Job Hunt

When you work 30 hours or fewer per week, you can enjoy more personal time in which to focus on your family, friends and hobbies. Having more free time is a great benefit to those seeking a better work-life balance. Some disadvantages of part-time work include reduced benefits and vacation assurance. Additionally, it can be challenging to get all of the necessary work done in a reduced period.

In this article, we’ll explore the key factors to consider when making this important career decision. Biopharma companies often look for contractors with specific skill sets to work on short-term projects in other countries. Additionally, many contractors work remotely, as they often have multiple clients based in different areas. Contract work can be ideal if you want to gain international experience and see the world. While working as a contractor, you have the freedom to choose your own projects and work hours.

Contracting is also ideal for people looking for a side hustle to earn extra cash. The size of the contract workforce has been growing, partially due to the benefits that come from the working arrangement. According to one recent study, nearly 15% of all U.S. employees are considered to have contractor contract vs full time salary status. If you engage in a traditional hiring process, you can only hope for the best. Contract-to-hire employees prove themselves long before you have to make a long-term commitment. The freelance designer who updated your website may enjoy the flexibility of their contractor position.