Modern businesses have varying employee needs, with different employment types suited to different positions and divisions, and many companies employ both contract and permanent workers. Contract and permanent employment types have different advantages and disadvantages for both employer and employee, and offer job seekers different contract types. Here is a quick run-through of these two contract types:
This contract is an indefinite contract where the employee is taken on by a company until the employee wishes to leave their position or the contract is terminated in some way. A permanent contract implies open-endedness, with no set date.
A permanent contract employee is entitled to all forms of benefits provided by the specific organisation. Permanent employees are often eligible for benefits such as medical aid contributions, car allowance, training, sick leave, holiday pay, provident fund and death and disability benefit. These additional perks of permanent employment can dramatically reduce employees’ outgoing expenditure and increase their monthly disposable income.
The recruitment of a permanent worker is generally an arduous and in-depth process, requiring multiple rounds of interviews and extensive background checks. Organisations looking to hire a permanent worker are more likely to place significant focus on their growth potential and the ability to integrate well into the existing workforce.
Contract work has a start and end date and involves the hiring of a contractor or contract worker. Contract workers work for the business on a limited basis, which means that their work has a set time frame.
Contract workers can often demand higher rates than those paid to permanent employees, as they do not enjoy the benefits afforded permanent employees. Contract work can easily work for numerous employers in quick succession.
The recruitment process for a contract worker is usually shorter than the recruitment process for a permanent worker. Employers are more concerned with the individual’s specific skill set and ability to perform the given tasks, than their long-term potential.
Many businesses use permanent employees to form the core of their workforce and employ contract workers when they need to fill in gaps or complete unique projects. For job seekers, it is very valuable to understand the differences between these two contract types and how your contract may influence your employment.
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Professional Sourcing is a top-tier South African-based recruitment agency operating internationally, IPM accredited, LEVEL 2 BEE RATED and 51% Black Owned.
Our agency specialises in professional placements (senior and specialist talent) and exclusive skills recruitment to a wide range of industries, including JSE’s top 100 companies, SMEs and the Public Sector.
Our agency specialises in professional placements (senior and specialist talent) and exclusive skills recruitment to a wide range of industries, including JSE’s top 100 companies, SMEs and the Public Sector. -- Patricia Koekemoer