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Finding a job Contract Work vs. Full Time: Advantages of Employment Types

Contract Work vs. Full Time:

Advantages of Employment Types
Indeed Editorial Team
Updated February 3, 2023

When you're looking for employment, you may need to consider whether you’ll want a
full-time job or contract work. While both offer certain benefits, your financial needs,
lifestyle and career path can affect which employment type is the best fit for your
situation. 

In this article, we explain contract versus full-time work and list the advantages of each,
plus how to choose between employment types.

What is a contractor?
A contractor completes a job for a specified period of time. The term "contract" describes
the agreement between a company and a contractor, who functions on a per-job basis
instead of an offer for consistent employment.

Companies hire contractors as outside employees. Contractors aren't officially part of a

company but are instead hired to complete specific tasks for a business as needed. A
company could hire a contractor for a one-time job or give them consistent work over a
certain period of time. They are compensated based on a negotiated rate for a project or
per hour of work.

Read more: How To Become a Contractor

What is a full-time employee?

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A full-time employee completes consistent work on a daily basis. Full-time employees

follow a set schedule and job function that guides their regular tasks.

A full-time employee is an internal part of a company and may be able to make decisions
that guide their work. Full-time employees are also compensated based on their prior
experience and work history within the company. They work with a team and can build
lasting relationships through shared work experiences over their time of employment.

Related: How To Ask for a Full-Time Position (With Tips and an Example)

Contract vs. full-time work

Full-time employees and contract employees work within separate and distinct
guidelines. Here’s a list of the main differences between full-time and contract
employees:

Contract employees
Work flexible hours in most positions

Work only for a specified length of time

Work seasonally or only when a company has a need

Receive one-time payment for services or hourly pay

Work under adaptable procedures

Do not typically earn company benefits

May purchase their own equipment or tools to complete work

Are usually paid when work is completed and approved by the client

Work remotely or in their own office facility in some positions

Full-time employees
Usually work within set hours

Work year-round is often guaranteed

Receive regular pay through an hourly wage or annual salary

Receive internal training

Complete specific work procedures

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Earn company benefits

Have taxes withheld and managed by the company

Use equipment and tools provided by the company

Receive payments on a regular schedule

Related: Contractual Employees vs. Permanent Employees: What’s the Difference?

Advantages of being a contractor

A few of the advantages of being a contractor include:

1. You can set your own schedule

Unless you’re hired on contract for a specific hourly role, you often choose the hours you
work and aren’t held to a set schedule like a full-time employee. This is attractive to those
who act as caregivers, people who hold multiple jobs or those who simply want flexible
work hours. 

2. You can choose projects

A contractor can choose the projects they accept as well as the companies they work for.
This means you can also gain experience across multiple industries or find a specific
niche within your own skill set as you seek contract work.

3. You can work for multiple companies at once

Contract employees have the opportunity to find employment through multiple

businesses at once. They have an easier time working multiple jobs at once than full-time
employees due to the flexibility of their employment.

4. You can earn a higher hourly wage

Contractors often earn a higher hourly wage than full-time employees due to a lack of
some benefits and shorter employment terms. Contractors also offer their specialized
abilities to fill a need in an organization.

Related: Independent Contractor: Definition and Examples

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Advantages of being a full-time employee

A few advantages of being a full-time employee include:

1. You’re guaranteed work

Once you accept a job as a full-time employee, you’re guaranteed work from the
company. You don't have to seek out your next project after a contract ends, but instead,
work continuously in your role within the organization. Full-time jobs may offer more
stability to support specific lifestyles.

2. You’re guaranteed certain earnings

Because full-time employees are guaranteed work, they’re also guaranteed wages. This
makes it easier to budget and plan your finances over the course of a year. Unless
something unexpected disrupts your ability to work, or you lose your job, you can plan
on a consistent monthly income.

3. You earn benefits

One of the most attractive advantages of a full-time position is the benefits that come
with the job. Along with paid time off, companies usually offer full-time employees
health care plans that are partially or fully covered by the organization. They may also
offer other benefits or perks, such as 401(k) options, parental leave and life insurance.

4. You get professional development

Working full-time for a business allows you to take advantage of advanced training and
professional development opportunities offered by the company. For example, an
organization may pay you to attend conferences or complete courses that add to your
knowledge and skills that may help you advance your career.

Related: Breaking Into Full-Time Work With a Contract Background

How to decide between contract vs. full-time

work
When considering whether to pursue contract work or full-time employment, think about
the following:

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Determine your lifestyle needs

Think about how each type of job fits into your financial needs and lifestyle:

Compensation : One of the main differences between contract versus full-time work
is your compensation. Although contract work usually offers higher wages, you can
earn benefits and paid time off as a full-time employee.

Stability: Full-time work provides financial stability, while contract work may offer a
higher earning potential over a shorter period of time.

Flexibility: Think about whether you need a more flexible work environment or an
adaptable schedule for work hours.

Connections: Consider if you are a person who thrives on collaboration and building
team relationships or if you prefer to complete a task and move on to the next
opportunity in your career.

Related: How To Ask for More Money: Tips Before, During and After

Consider your skill set

Certain jobs lend themselves to contract work. However, there are still diverse options for
contract work across many industries. Nurses, skilled trade workers, creative artists and
even information technology professionals can all work on a contract basis. If you feel
you can meet your financial and lifestyle needs better through a contract position in your
industry, you may decide contract work is a better choice.

Network with other professionals

When you're considering whether contract or full-time work is best for your career, find
professional connections who can offer you advice based on their experience. Many
contractors are part of networks that connect freelancers to potential employers and
each other. Full-time employees can also connect with networking groups that share
professional expertise among members.

Read more: Q&A: Should I Be an Employee or Independent Contractor?

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