What is the difference between contract and perm job

oldstudent

New Member
I am holding a permanent job at a local listed company and was offered a higher salary at a MNC as a renewable contract staff.

Quite a dilemma now as there are pros and cons..
I have friends telling me that I should stick on with permanent job as contract staff are usually not secured... is it true ?
 


oldstudent

New Member
powder.."very successful" is not the word to describe them la.. they are holding a perm job.

The benefits offered to me is almost the same just slightly lesser.. It just keep me wonder what is the difference between contract and permanent ? I tried to search online but not much info .. so hope can get some of you who might be currently working as contract staffs to share..
 

simpleman

Active Member
Contract will mean that after the term - it may not be renewed.

Permanent job will mean unless you resign or they terminate you (non performance) - you will have a job.

Singaporeans like stability and most will prefer permanent job. But contract jobs are ok if you are not going to do it for long term. Some contract jobs are very well-paid. Of course contract job may not be so good in terms of fringe benefits..
 

powder

Active Member
oh, i'm just trying to determine the source for the advice... cos the advice will also depend on the kind of pple they are and the beliefs they hold.

well sm gave u a rough idea liao...

i think u only need to worry abt which one u prefer in terms of pay and scope... which one excites u and makes u feels like it's something u can look forward to.

in terms of contract or perm... dun let it get to u too much. if u look at the 2, they are pretty equal in Pros/Cons... it really depends on the angle in which u look, including salary/term/period/perks.

even tho most prefer perm... dun forget perm-termination could mean just notice and some token compensation, whilst a contract may get u fully paid for a 3yr-contract even if they no longer need u after 2yrs.

it Also depends on your industry, job nature, role etc... actually there's many many things to consider... it's not just a "perm is better than contract" statement nor advice... tat's why u need to ask more.

a person who is low on confidence - may seek perm jobs for a false sense of security... and thus advise u in the same direction.

tat's abit of what i have to share...
 

oldstudent

New Member
facing dilemma now ..

high risk >> better opportunities
low risk >> lesser oppotunities..

Powder, I have read ur suggestions in another thread also relating to contract employment. I am impressed by your experience and advice given to the TS.

Hope you also offer your experience and advice here..

My current job is very stagnant, not challenging and income is quite dissatisfying for me.. however, it is still a perm job.. stable.. good to pass time..

The other contract job offered will be very stressful, independant and salary offered is 20% more (no bonus , but AWS + some benefits)

My heart keep telling me to take that offer ..
but the other side of me keep pulling me back with qns like "what if i can't meet the expectations, and they can ask me to go easily as I am a contract staff"

I have read a website saying that contract jobs are more suitable for fresh grads who want to explore their prospects. And I am already in my early 30s (altho still studying), I'm not consider fresh grad as I have working experience..

The pulling back factor is also my age.. what if they are not renewing my contract, which means I have to start looking all over again..
 

powder

Active Member
well dude,

if your current company asks u to go, u will have to start looking all over again too right? so both hold the same risk to me actually... just that 1 of them gives u a false sense of security calling it "perm". but i see many perm pple losing their jobs too, and in downturns too... so what protection is there?

Both jobs requires performance to a certain extent... both will be replaceable, both can have competition from cheaper younger pple. perhaps 1 of them pays for your doc's fees and dental fees But that is like what? $30 each visit? let's call it $50 and visit the doc monthly... so total $600?

for $600... or let's call it 1k, for 1k - u wanna chase after being "perm"?

u wanna know wat's Reality? it is that your low-risk job has a very high risk of making u have a harder life as u get older. when u are young like 30 or even 40... if u dun take higher risk jobs that can pay u more money... do u think at 50 u will take Even higher risk jobs to make up for the lack of money? with kids or aging parents... i think we need more as we age.

Honestly, it's very hard for me to answer such questions at face value... even as a fren, i will be looking at your profile, finances, needs, family setup etc... what more a stranger online? i have to be even more careful not to screw your life up with bad advice...

in terms of Risks & Fears... we Should always be taking them, facing them, and always looking At Least 1 level ahead... u can't get More without losing Some. u can't walk without falling... the principle will always apply in our lives, whether u like it or not.

the more u fear, the less u are willing to lose... the less u can hope to achieve unless u have divine help or very helpful wealthy parents.

have more courage sometimes... not every job-change is a 20% increment... sometimes u have to take a 20% paycut to get a chance for a higher salary ceiling. me and some frens have taken paycuts of 6-8k to 1.5-2k.... of cos u've also read stories of pple who quit 10-20k/mth jobs to start something new... meaning no salary.

u dun have to have that same kind of risk, but surely... perm and contract - dun u think this is Not even considered a risk?

hope u understand what i mean.
 

tomasulu

Member
Usually a temp job means the org doesn't have a headcount for the position. It can be for a multitude of reasons why that's so. All things being equal one should not trade a full-time job for a temp job. There's no career path for a temp position.
 

tomasulu

Member
yes and the main difference is that temp jobs don't come with career paths. it's ok if you are just in it for the money and you don't care about progressing in your career or within an organization.

imo, the lack of benefits and perception of tenure are relatively minor considerations.
 

powder

Active Member
think it's impt to look at the benefits of perm and put some numbers on them... once u put numbers on them and equate them with money... u realise that it isn't really worth as much as we think.

and in terms of firing... i'd think the contract offers a better safeguard than perm... so i dun how it got misconstrued. the retirement-pension schemes are also no longer in place, so i'm an advocate of contracts, rather than perm... it gives both parties a well-defined expectation on black&white.
 

oldstudent

New Member
" yes and the main difference is that temp jobs don't come with career paths. it's ok if you are just in it for the money and you don't care about progressing in your career or within an organization. "

Contract is not temp right ?
 

ah_o

New Member
it all falls back to your objective in changing job.
are you looking for
- increment? if so, overall package matters. do compare annual packages not forgetting 13 month and expected performance bonus. if this is what u want then every job switch should bring u increments.
- career advancement? if so, make sure that the new job has heavier responsibilities (more senior position) than your current one. this ensure u have progression in your career and not always hovering on the same ground. if this is what u want then every job switch should bring u "promotion". do note that promotion does not always equate to increment.
- new exposure? if so, make sure your new job gives u what u want to be exposed to. be prepared for paycut if u have no experience in the new area.

there are 1002 reasons for job change -nasty boss, culture, office location, flexibility....

u may have more than one reason for changing your job and you need to prioritize them. it is difficult to get a new job to meet all your objectives so sometimes it will take more than 1 jump to fulfill all objectives. focus on ur top priority first.

not a believer of employee loyalty or job stability. at bad times, perm staff gets retrench as well. if u r good, company will keep u around even though u are a contract staff and they will ensure that u stay by offering u more incentives.
 

powder

Active Member
if u look at it the other way, companies are also protecting themselves from employees who come n go... so the concerns can be on both sides. for myself, i would be employing pple on a minimum-3yrs contract, rather than a perm thing. for the amountof money and effort u gonna spend grooming a person, u try to tie him to a contract...

just to give u another POV... cos it seems that there's a tendency for some pple to think it's becosthe company only needs them for that period, and after that they will be asked to leave... that is not entirely true. for myself, i have been in situations where i have been asked to sign a 5yr contract, whilst i dun want anything more than 3yrs... so it really depends on the dynamics that is specific to your current situation.
 

bochi

New Member
If you're sure that your possition not easy to replace then contract wouldnt be a matter.

I was a contract staff in oil comp. (for 5yrs) before finaly resign to become a sahm. And my husband up to now also under contract for 8 yrs now n one of the key person in this branch also contract staff for 16yrs.
So in term of stability not always be a problem, from my own experience i still hv the same benefit as permanent, even higher pay than permanent staff on the similiar level.

When my husband transfered oversea for the first time as a contract staff i do asked him why he didnt insist on his current permanent possition and just take allowance in return as more stable; but hubby told me he is confidence in what he is doing and (sory if sounds arrogant) not easy to find his replacement, which is in long term would favour him, for example : company paying our kids school fees in int'l school, yearly holidays, cars, house, plus he can get significant increment per year base on the re-negotiating..

They guy i said aove (16yrs contract), eventough doesnt have name card printed "manager or director", he the one who has the say in the projects, he manage ppl, he makes decissions, and lead meetings.
Similiar with that guy, my hubby also have the power to decide and manage ppl, clients looking for him to solve problem and the managerial possition in the office count and listen to what he say.

so base of my own humble opinion, nothing wrong working on contract.
 

powder

Active Member
yup, agree. it's very much the same experience for me in terms of contract personnel... good point on being able to re-negotiate pay... think in terms ofhow it functions with soccer players, or actors with maybe mediacorp... i'm not saying it's the same, but if u think along that line, u'll see that it might be just as advantageous to u...
 

opalstar

New Member
Will it be more difficult for the person who works on a contract basis to progress up the career ladder later in the career ?

for example, wouldn't most companies offer permanent jobs to people which they want to groom? Otherwise, they run the risk of the talent slipping away once the contract expire?
 

powder

Active Member
if u are a boss/management...

1) Will it be more difficult for the person who works on a contract basis to progress up the career ladder later in the career ?
- my thoughts...
your perm staff is abv average...
your contract staff is excellent with great potential... who would u groom?

2) wouldn't most companies offer permanent jobs to people which they want to groom? Otherwise, they run the risk of the talent slipping away once the contract expire?
- your perm staff can resign with 3mths notice
your contract staff have a minimum period to fulfill and that can be re-negotiated... who is safer for u?

try thinking from the top, not from the bottom... some things are unnecessary fears/misconceptions.

do u see perm staff heavily groomed & having a large number move to outstanding roles in a company?
 

mewmoon

Member
One question you can ask yourself is "why not?" If both jobs offer almost similar benefits, why not go for something that keeps you on your feet?

If you're worried about not performing up to par, then all the more you should perform 110%. Be it a contract or perm job, you should always do your best. You never know what doors of opportunity may open for you.

Nothing is certain. Not even the metal rice bowl. Don't live in eternal what ifs.

You mentioned that the new job will be in an MNC? Being in a contract job doesn't mean you can't source for opportunities to advance in your career. Don't just do your job. Build relationships too.
 

clark

New Member
Stupid pple here.

Wait till u struck with cancer or high medical bills with a contract job and u will see which is better.

What a load of crap !
 

opalstar

New Member
There is no way on earth I will rely on company hospital insurance.. Health (clinic visits) yes.. But nv hospital..

My two cents is that I think is extremely foolish to rely on company insurance..What happens if u are 40 n u found urself retrench .. Who will cover u at that age? Even cover also will exclude pre existing condition ..

Didn't think that was a smart move .. I got my life insurance w my first n my hospital w my second paycheck
 

clark

New Member
and choose companies that cover dependents also.

Stupid pple think they are very smart to have less benefits.
 

opalstar

New Member
... okay.. to each to his/her own.

I usually chose companies with progression and challenges or places which i like the culture.. IMO if I do not really need a hospital coverage so whether a firm has it or not is beside the point..
====

Back to topic.

" 1) Will it be more difficult for the person who works on a contract basis to progress up the career ladder later in the career ?
- my thoughts...
your perm staff is abv average...
your contract staff is excellent with great potential... who would u groom? "

Me thinks : I will chose the one that is not an outsider to the firm and understand the working of a company and at the same time gains the respects of his/her peers.

Perhaps both contract and perm staff can do that.. but it might be harder for a contract staff to merge in

"2) wouldn't most companies offer permanent jobs to people which they want to groom? Otherwise, they run the risk of the talent slipping away once the contract expire?
- your perm staff can resign with 3mths notice
your contract staff have a minimum period to fulfill and that can be re-negotiated... who is safer for u? "

Me asks : When there is a down turn in the company, from management point of view.. is it easier to not renew an existing contract staff of excellent quality of 1year or to retrench the above average existing staff who worked for 5 years with the firm?


I think there are pros and cons in the Contract job. To do well in Contract jobs, the person must be doing something specialised and excel well in it.. A niche skill will give u the confidence that it is likely that you will be renewed..

Of course, there are instances whereby the contract job allow more room for negotiation after the term is up.. Again, perhaps more so for the contract staff with a niche skill rather than the common contract staff..

My two cents..(?)
 

powder

Active Member
kent,

u're just too smart... i guess u're the few smart pple in spore to have insurance.

i guess all the big insurance companies in spore depend on pple like u who are in the hundreds, cos u're so smart. therefore they have big buildings and hire more staff than policy holders... yup - u.

your intelligence really took me by surprise.
 

clark

New Member
haha..ignorance is contagious.

Are you smarter by not being insured ?

STUPID FOOL. point proven.

(Btw, haven't you realised that u are getting lamer ? Pple are coming to terms with it, u know that right ?)
 

powder

Active Member
it doesn't matter actually... if what pple think of me mattered, i would be like u and a few others who have little substance.

as for insurance, i must say u're really smart to have personal insurance, especially term... i wonder why not many pple think like u.

seems those Insurance buildings/biz survive purely on your premiums. u're one helluva hevaily insure individual.
 

bochi

New Member
ignore him lar.. reading his posting only full of "fat, ugly.." he couldnt say anything else but those words..
we just talked bout this kind of ppl during seminar bout bullying case, and those experts mentioned that ppl who like to comment sarcastic and tend to insults other ppl in cyber world usually desperate ppl who angry with his own condition : failure, left behind by other ppl, etc.
well, i guess no need to bother to relpy to this kind of person powder, you can tell what he has just by reading his comment..
I'm not powder or anybody bigest fan, but i believe in healthy and manner discussions

never heard tht a company paying everything n fully cover perm staff when they got critical sickness; then again, im not say impossible, but rare i believe.
in seperate note, hope others not really think that you really can depend on comp insurance for critical condition..

Just to share to ts, when i was contract personnel, comp still sending us (contract personnels) for trainning, workshopns n seminars even to oversea like uk, states n norway; the difference with perm staff was, they can take more course (like up to 4 times a year), which is contract staff average only 2times a year, but of coz some ppl still can get 4or even 5 times a year, thats called "groom" as well rite?

in regards of health coverage/insurance, most of contract personnel on my level get ard 10k usd per year, plus spectacles, dentistry, and pregnancy. Once i married my hubby, hrd adding my hubby under coverage as well within a week. in other hand, hubby health coverage not as much as mine eventough he earn much more than me (we were working in diff comp n different field); so if you worry about this matter, go and check with them then source around to make some comparison in order to get better idea.
 

powder

Active Member
it'll vary with companies of cos... i think when we talk abt company insurance, it's also impt to know Who gets the money eventually... most seem to assume that the beneficiary is ourselves...

anyway i'm sure a good number of us have insurance a few times over... i was just patronizing the mega-intelligent accountant who pops in with little irritating msgs.
 

powder

Active Member
Opal,

for 1) can i just say that as employees, u may think that perm is more 'insider' which contract is more 'outsider'.... or that the perm ones have a more inside knowledge... these are all stereotypes n assumptions. i believe with more working experience, u realise they are just the typical thinking of certain employees on the ground... to give oneself a false sense of security.

2) If u really wanna think from management level... i think u should Not be thinking of the contract renewal as a one-way thingie... whereby u seem to put yourself at the mercy of the company's call to extend your contract. i'm not sure if u realilse that there are other companies who are aware your contract is due, and will approach u prior to that. of cos, if u're worth your salt... i would assume that we are discussing based on a certain level of competency here.

perhaps we come from different worlds where jobs are concerned. i just recruited 3 perm staff from other companies including overseas to join my company... took 2 or them on contract to protect myself from having them poached... whilst the last one is still in negotiation on contractual terms.

there is no security in perm, not for company nor employee... it is just one of those Old historical preferences that has transcended time and still practised by pple who Dun question it. maybe becos in the past, there was pension scheme? now it's worth nothing but a word n some cheap medicals.

main thing i believe in, is to build a name for yourself even as u think u're simply an employee... of cos it has to be within roles which u can actually do that. else u'll just be jumping from company to company and looking for a boss who bothers to treat u well. if this is the path, u never actually get any security... the best security is one whereby u can control.
 

opalstar

New Member
hmm ... true, I didn't think about it from this angle..

While I never focus on permanent job for the sake of "job security", i did think of permanent jobs as a better way to progress in a firm.

Well, regardless of job types, as long as one is good in the job, the person need not fear of being out of job.

So I guess the most important thing in life is to excel in whatever one is doing, that is the best job security one could have.
 

powder

Active Member
u just got the most important gist of it... the best jb security is ourselves, and how indispensible we make ourselves...

u know, at one stage when i was negotiating contract with another company... the reason why i didn't move was becos the company wanted a 5yr contract but i wanted max 3. the next thing u gotta figure out is how long u can stay contracted... cos our priorities in life change and our roles too... unless u super certain u can do the same thing for 5yrs, then can go ahead... else never tie yourself down to long contracts... they are similar to those 5-8yr bonds... sure, the mpney is good, but when u have abit of money, u will realise that freedom is more impt than money.

this is just an extra advice should u get to such a crossroad.
 

oldstudent

New Member
I will like to thank those who have given me fruitful advices in this thread.. You guys are really very helpful!!

I have tendered my resignation for my comfortable job and I am going to take up the stressful big challenge..
Wish me good luck !!
 

powder

Active Member
dun worry abt it, just take it in your stride... we've all got it in us to excel, most times we dun becos we made a choice to settle for less...

yeah, like 80% of us blame the environment and timing, but working for ourselves and making our lives better isn't just abt waiting for opportunities. Reason being that "Opportunity" is highly subjective, and not everyone can see it. the man who makes his money from funeral arrangment, the man who makes his money collecting waste used cooking oil, the man who makes his money doing things others dun do, dun see, dun want, dun feel, dun like, dun Dare...

think abit further and deeper. those who embark on the roads less travelled may not always succeed, but they come with them a wealth of knowledge that can definitely aid success. take strength in those who walk the unknown paths and come out better...

always rem that the closer u are to money and success - the more obstacle and tired u'll get... just dun give up. other than innovation (which also requires great persistence), it is hard to envision sitting comfortably and having promotions and salary-increments thrown at us regularly...

the truth is in our daily lives, when we see it and Dun embrace it, tat's when we have a higher chance of lifting ourselves away from the norms and accepting uneventful lives.

cheers!
 

woofy55

New Member
Job security is in everyone's mind nowadays. Be it Contract or Permanent. Contract they can ask you to go when the contracts ends. But Permanent jobs nowadays also can ask you to go. With compensation will be good. But how long will the compensation last is also a question. especially if the age is catching up.

Anyone out there looking forward for financial and time freedom? You work for yourself..?
 

carlislesg

New Member
I've been jumping from one job to another and I can say that I know a thing or two about this. Permanent job, doesn't literally mean permanent. Company policies change all the time. and there might be a time that they'd eventually let you go, unless if the company is really successful then you're good to go. As for the Contract based company, from the term contract, your work ends when the contract ends. However, it is also possible that they will renew your contract if you show excellent performance at work. To make it simple, just think if you're happy with your current company or are you willing to adjust to another work environment.
 

fishoutofwater

New Member
how about when age catches up with you? then can't really jump from contract to perm so easily. i've worked perm all my life till my retrenchment & now working contract job. but late start in this new industry is not making me feel secured & the constant upgrading needed... not sure if can teach old dog new tricks. any advise?
 

co_ads

New Member
Wow this was 2011 and still relevant to my dilemma today. How did it go for you oldstudent? I am so anxious of my skills, I lack confidence, I am scared to underperform and get fired. 8 yrs as perm, should I stay or should I go? The longer I stay, I feel more and more outdated and irrelevant and just bound to be redundant. I feel I owe it to myself to try and learn something new even if it is contract post. This might be my ticket to thrive more in the future.
 

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