Contract vs Employee: The Stability of Instability
Please Note: This post only applies to American citizens in the United States.
This is a topic that I get a lot of questions on. Especially in today’s tech world, there is a large population of great engineers that have elected to quit working as employees, and embrace the contracting lifestyle. Everyone has their own hierarchy of values, but contracting has become a very attractive option for many.
Instability: The most common perception of contracting that I hear is that in accepting a contract, you are foregoing a certain level of stability in your job. This is a valid point, but only true for about 50% of the contracts out there. Sure, there’s a good market for some excellent contracts that are for 3 months or less. But, if you’re looking at a 3+ month contract, those are the types of opportunities that can almost be treated as a full-time employment option. Think of it like this:
Every single company that I have known that has an FTE workforce has some sort of 0-90 day evaluation period by which FTE’s are evaluated on how they are doing.
Contract to Hire: Essentially, this is corporate jargon for “3-month Contract to Hire”. If you’re not performing to what your new company is expecting, or your new company figures out they don’t need your position filled anymore, you are back in the job market. This is the same as someone who takes a contract for the same amount of time. Conversely, if you’re joining a team as on a 3-month contract and over-perform your tasks, or create a need for yourself long term in a company, you are ensuring that you get evaluated for full-time positions, or for contract extensions.
Performance: Another point to consider is the fact that companies often times have budgets allocated to their contract work force. Those budgets are usually steady, and never ending. What this means is if an engineer starts working for a company as a contract, and finishes out a project, performing very well, they will usually be the first to be considered for any other projects, and those projects are usually well funded already.
The biggest thing I want to point out, in all that I just said, is this: you, as the job seeker, need to be open-minded. If you’re a career-long contractor and don’t want to ever consider working as a full-time employee, you really could be missing out on the chance of a lifetime with the perfect job and company, and vice versa! Always try to keep an open mind and try to entertain what comes across your desk. You never know, it might lead to something great!
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