Contract vs Permanent Staff: Pros and Cons

Hiring Contract Staff or Permanent Employees

In the past, companies would normally go for permanent hiring as it is the most common way of recruitment, employees would love a stable job and continue to work until the stage where they would retire or resign for a better opportunity.

Time has changed and contract staffing in Malaysia became more popularized and used in many short-term projects or for other reasons. Companies are confused whether they are to apply the which option for recruiting new employees, most still think that permanent is the way to go in terms of job stability, but we say otherwise.

There are many debates on this issue, and we are here to let job seekers and companies to know the advantages and disadvantages of these two choices.

Permanent Employees

When it comes to permanent hiring, normally companies would not approach recruitment firms for this option as permanent staff would be easier to find even before the pandemic.

Contract Staff

Opting for a recruitment agency when hiring a contract staff or temporary staff is a better option. Recruitment agencies are great at outsourcing networks as their database is wide and specialized in receiving a lot of job orders from companies to search for candidates that are willing to work on a contract basis.

It is a good opportunity to witness these staff who have the potential to contribute to the company, it can be used as probation, and they can choose to renew/convert those who they see fit.

1. Work stability

Jobseekers always want to have stable work and do not have an expiration date for a job. It also creates a career progression for permanent employees to work hard and in two years along the road, they could be a manager as they have also proven their loyalty to the companies.

This can be more difficult when it comes to contract staff. Since they are not tied to the organization, in general, they are not expected to stay loyal to one company. Hence despite their work performance, their job security is still a questionable aspect at most companies. There is a possibility that their contracts might not be renewable or convertible, which can be troublesome to say the least.

That being said there are instances where a company might want to retain a potential candidate that has been a contract staff.

2. Skill Set

Contract staff can bring multiple skill sets to a company where they have a lot of expertise to provide from previous companies. They are always happy to be involved with new people and the working environment. contract workers have a long list of working experiences in their CV compared to permanent workers.

Unfortunately, there is less opportunity for their skills to grow when an individual stay inside one company too long, they are unable to explore more line of work and gain more knowledge.

3. Annual bonus and benefits

Employers have an easier time retaining permanent workers by providing yearly bonuses and benefits, they do not have to spend time to find a replacement every few months if a contract staff has left. This is mainly due to the fact that, the cost of training for new employees is very high and if they resigned months later, they would leave with the knowledge and skills provided to the next company.

The employee who works on a contract basis does not have such privilege. They are paid according to the contact and rarely get incentives and allowances.

4. Work Pressure

Contract staff feel less responsible for their duties because they are not fully tied with their employers. Even though they put the required commitment into their work after the said work is done the contract can be cut short to finish earlier.

For permanent employees on the other hand, after working on the same routine for two to three years straight, they may feel stagnant due to the routine. It is important to keep permanent candidates interested in their work-life.

In conclusion, it is important for employers to know what aspects of work that they find important. That way they can better identify which candidate is a better option for each job opportunity. For more information about permanent and contract staff, feel free to get in touch with us.