News & Insights

News and Insights

Should You go Permanent or Contract?

Should You Go Contracting or Permanent  Wellingtone PPM Recruitment - Project Management Recruitment

Should YOU Go Permanent or Contract?

For many people the decision to go contracting or stay as a permanent employee is difficult.  You may be a permanent employee working alongside contractors, all of whom appear to have a nicer car then you.

Conversely, you might be a contractor who is now looking for more security, has a family and needs to know the mortgage will be paid.

Let’s look at the facts:

Contracting, usually for a day or hourly rate, should receive a higher income then a permanent employee. By being a contractor you are accepting more risk as employment is not guaranteed. You are taking this risk away from the recruiting organisation and they should pay a premium for this. Typically a contractor is working under 1 week of notice and obviously there is no severance, pension or benefits to be paid to a contractor.

The pro’s and con’s can be summarised as follows:


  • Higher Risk, Less Security
  • No Benefits
  • No Career Development
  • Greater Flexibility
  • Higher Income
  • Broader Experience


  • Lower Income
  • Less Flexibility
  • Lower Risk, More Security
  • Benefits
  • Career Development
  • Sense of Belonging

The difference therefore goes way beyond the financial. If you are an employee you do have more job security and you should hopefully feel that you are part of something. You should also see career progression and some investment in your development.

When contracting in an interim position, no-one else will consider your career development and training needs. You must have the discipline to do this for yourself, so do set yourself training targets each year to make sure you keep one step ahead of the competition.

Over recent years I have seen many contractors earn great day rates without the worry of being without a contract. I do know people who have paid off their mortgages and others with second homes. The market has been good.  In weaker economic conditions the contractor is the first to go so if you want to make the jump, the best place to be jumping today (given the current economic slowdown) is to full employment.

Independent financial advisors often say we should all have a minimum of 3 months salary saved.  I’m no financial expert, but would suggest this should be at least 6 months for someone working as a contractor, and that doesn’t include saving for your end of year tax bill.

Should You RECRUIT Permanent or Contract?

If you are looking to start one or several new projects and you are looking at recruiting a Project Manager, perhaps you are juggling the pro’s and con’s of taking on a permanent employee or pulling in a contractor.  What is the best course of action?

There are clear differences:


  • Usually expect to take longer recruiting an employee.  Aside from the fact that your selection process should be more rigorous, people looking for a permanent position may already have a job and require at least 1 months notice.
  • Employees are looking for a career path and longevity, not just a brief for their first 6 month project.
  • By investing in an employee you are developing the skills and capabilities of the organisation.  This is a better solution for the longer term as your expertise won’t walk out of the door once the project is complete.
  • An employee would expect to have a greater commitment to the organisation and it’s success.  They will also often enjoy more buy-in and receive greater co-operation from colleagues as they ‘carry more weight’ than an outsider.


  • Can be recruited quicker and don’t need the 1 week company introduction course.  A seasoned contractor will expect to be up and productive on day one.
  • You select a contractor based on who has done the most similar job before.  You are buying in immediate expertise that may not be required by the organisation in the long term.
  • A contractor will be more expensive than an employee.
  • A contractor will be less inclined to engage in office politics and other ‘noise’ or ‘baggage’ that might distract an employee.
  • The contracting market in the UK is very mature and there is a very large pool of contracting talent available.

If you are considering using a contractor, some advice:

  1. Make sure you have built knowledge transfer as a deliverable. Don’t let all that knowledge walk out of the door at the end of the project.
  2. Whatever the contractor may say do remember that this is a financial transaction and they have a strong interest in ensuring their contract is extended.
  3. Negotiate based on a professional day rate.  Avoid paying by the hour if at all possible, particularly for more senior positions.  There is a small minority of contractors who will negotiate on an hourly rate so they can then burn excessive hours (+10 / day) to increase their income.  If you do go for an hourly rate agree working hours and the approval process for working extended hours.
  4. Always negotiate.  Don’t accept the first rate you are offered.  If you have a good project that provides a long term opportunity then your negotiating position is strengthened.

Some extra advice if you are using a recruitment agency:

  1. Tell the agency that you want to know the rate the contractor is receiving and therefore the commission of the agency. Ideally agree a percentage upfront. Agencies are in it to make money and if you have said you will pay £350 / day, guess what, the contractors will all cost around that or more. The contractor themselves may not be receive anything like that.
  2. Ask the agency why they are recommending a particular candidate. Some agencies will submit candidates to clients will little investigation into their true capabilities.  Keywords match on a CV, so it’s submitted.
  3. Before hiring an agency talk to them to make sure they have the industry skills and experience to understand your true requirements. Agencies often use staff who are more sales orientated than anything else.  How can they be qualified to select good candidates to run your project?
  4. If you are using an agency, do give feedback. If a candidate is no good, then say why.  You can’t expect the agency to read your mind and their candidates will want feedback, particularly if they came to interview & then got rejected.

For further expert advice and assistance with permanent, contract & interim recruitment please don’t hesitate to get in touch. Last year two out of every three candidates we submitted to our clients were invited to interview.

* Please note that we have an extensive filtered database of permanent, contract & interim Project Professionals,