Contracting VS Permanent Roles: FAQs

Contracting VS Permanent Roles: FAQs
Is contracting a stable career choice? Does contract job earn more than permanent roles? Get the answers to your contracting questions in Japan here.

If you landed on this page, chances are you’ve been thinking about making a change to your career. Perhaps you’ve been looking to accelerate your career in a way your time as a full-time employee hasn’t been able to do for you. Maybe you’re looking to break into a whole new specialism and you’re looking to get your foot in the door. Or this might be a particularly difficult time for your industry, as budget cuts and shifting priorities take on the form of layoffs and restructuring.

At this critical juncture, taking a leap of faith to try contracting could seem counterintuitive from garnering mainstream career advancements, and you may have concerns about whether this is the right choice for you. To help answer common questions about contracting, we sat down with our experts in recruitment to obtain their insights and advice for prospective contract professionals.
With that said, let’s dive into some of the common questions individuals like yourself ask when thinking about becoming a contract professional:

Is contracting a stable career choice?

In short, yes! This is the most common question people ask when evaluating contracting roles and the differences between a permanent one. But to answer why, we have to go into the specifics.
With contracting, there is understandable doubt about impermanence. Contract professionals accept an assignment knowing that they are hired to fulfil certain tasks, usually for a very clear amount of time. So, what happens when their contract ends? Do you go back to searching for new roles, with the prospect of having no income in between?
Alternatively, full-time roles feel more secure. During a probation period, managers assess whether they consider you to be a good fit for the company, and then decide whether to keep you in the organisation. Your job doesn’t come with an apparent expiry date, so you don’t have to spend time searching for alternatives. Or at least, that’s the ideal.
The truth is that more than ever before, permanent roles are just as much at risk, if not more so. Putting it in simple terms, whether a business can continue to support a permanent role depends on the company’s financial capacity to support that role. Cost-cutting measures during challenging economic periods may result in restructuring exercises that affect all employees.
So where does contracting fit into the picture? Companies increasingly look to contracting has a favourable talent source. Businesses with the foresight, budget and agility to navigate difficult conditions will be looking for a source of talent that can drive change; one that contract professionals are able to offer.
In a world where work tools are evolving rapidly and business needs are shifting to match, candidates should re-evaluate simply accepting the perceived job security in their current permanent roles, or taking a proactive approach to increase the relevance of their skills and be in demand anywhere.  

Can I earn as much in contracting as I do in a full-time role?

A common misperception is that due to the non-permanent nature of contracting, individuals stand to earn less than a full-time employee. This isn’t necessarily true, as contract professionals benefit from being able to renegotiate their worth with each project.
Let’s examine the salary growth of a full-time employee. Upon negotiation of a salary, employees will continue to draw this salary over the course of a year, with the potential of receiving bonuses based on performance, and an opportunity for a raise on an annual basis.
So how much of a raise can employees expect to receive today? We surveyed both employees and employers in Japan as part of our 2024 Hays Asia Salary Guide . We found that 38.9% of employers were willing to give out raises of up to 3%, while 22.0% of employers were not prepared to give out any raises at all. Additionally, 2.8% of employers were considering decreasing salaries to stay afloat.
Source: 2024 Hays Asia Salary Guide
With Consumer Price Inflation trending at 1.5%, up to 63.8% of employees may find themselves just keeping pace with economic pressures in the coming year. Most of these considerations fall back again to budgetary constraints that impact salary growth for full-time employees.
With contracting, you would revise your earning potential each time you consider a new project. Whether you’re committed for 3 months, 6 months or a full year, this allows you to return to the table to negotiate your desired earnings. And just like how full-time employees are measured against their KPIs, contract professionals showcase their worth through their portfolios. The more value you bring to the role you are being hired for, the greater your capacity to command a higher income. Many contract professionals have thus been able to increase their earnings this way. 

Will my benefits as a contract staff match those in full-time positions?

Another common misconception is that contract professionals miss out on benefits that permanent staff are entitled to. Given the competition for skilled contract individuals, employers are increasingly incentivised to offer competitive benefits to hire and retain valuable talent. This goes doubly so for contracting staff in Japan, where strict government regulations have mandated that contract staff must receive the same benefits that full-time employees get. 
As a leading contracting service provider with visibility into some of the most exciting projects within a range of industries, Hays offers competitive benefits for contract staff such as insurance, medical, allowance and more. Browse the hottest jobs we have to offer in contracting today.

How will future employers perceive short contract stints in my CV?

Today, breaks in employment are common with candidates experiencing unexpected restructuring, taking the time off to reskill, or simply needing to prioritise family and health.
Contracting further expands on this, with short, high-intensity projects being the norm for professionals looking to gain specific industry or project experiences.

Does contracting offer more work flexibility than a permanent role?

More than ever, employees today are looking for flexibility, allowing them to balance increased commitments outside of work without having to give up a fulfilling career. In Japan, work location or having flexible work options was the top motivator for employees to stay with a company.

Source: 2024 Hays Asia Salary Guide
While this will depend on your work scope and the need to be on-site, contract professionals generally have more freedom to dictate the terms of their employment, including the freedom to work remotely when able, and to set their hours to suit their schedules .
But this flexibility stretches beyond work hours and location…

How does contracting give me control of my career?

There are significant benefits a contract role offers to enterprising professionals looking to make the move. And while we have discussed the financial benefits of the role, it is also important to understand how contract staff can grow in the long-term too.

•    Contract professionals can upskill more quickly than permanent staff

Part of the allure of contracting (especially in the tech sector) is the opportunity to work in projects that are at the cutting-edge of the market. Where full-time employees are generally required to ensure regular functions of the business can continue to run, contract professionals are often hired to level up existing infrastructure and processes .
With access to these transformative projects, contract professionals can hone the key skills that are high in demand. By keeping their skills current, contract professionals remain sought-after, whether staying with the same or different employer, continuing in contracting, or transitioning back to a perm role thereafter.

•    Contract professionals have greater mobility

Experienced applicants occasionally encounter challenges when seeking to transition to a new industry. Investment banking, for example, can be difficult to break into if one lacks the prior industry experience typically required for permanent positions.
Contract professionals however are generally assessed by their ability to get the job done. Contractors who can demonstrate specific expertise from the projects they have worked on will be able to access these opportunities with greater ease.

•    Contract professionals can choose who they want to work for 

Every new project presents an opportunity to collaborate with a new client and determine which work experiences best contribute to your career growth. As you progress in your contracting career, you may wish to evaluate which clients and roles would best suit your growth as a professional, and take the necessary steps to grow in that direction.
The best contract professionals take this proactive role to invest in expanding their portfolio and value, earning them the recognition as leading experts in their fields. Enterprising professionals are high in demand and often receive multiple job offers simultaneously, affording them the opportunity to pursue their career aspirations.

How do I get started as a contract professional?

Looking to get started with contracting? Browse the hottest jobs we have to offer in contracting today .
We’ve also compiled a checklist of tips for those of you looking to make the switch. This guide will provide you with the following details:
•    A checklist of things to ask yourself when getting into contracting
•    Questions you should ask your clients before accepting a job
•    How to align yourself to your growth targets
•    Where to reach out for contracting roles



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