8 Major Benefits Of Contract Work (With Definition And Tips)

Indeed Editorial Team

Updated 30 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Contract employees are professionals who work for an organisation or individual for a limited period. Unlike permanent employees who work for a single employer, contractors can offer their services to multiple clients and earn money once they complete their contractual obligations. Understanding how contract work affects your career flexibility, qualifications and income can help you decide between temporary and permanent employment to pursue your career. In this article, we define contract work, explore the benefits of contract work and share tips to succeed as a contract employee.

What Is Contract Work?

Contract work refers to providing specialised service by an independent contractor for payment. The paying business determines the type of contract according to their requirements. Some contract employees may complete a single project, while others may remain with a company for an extended period. Contractual employment can be helpful for individuals seeking to start a career or enter a new field.

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Major Benefits Of Contract Work

Here are some benefits of contract work:

Flexible work schedule

A flexible work schedule allows contract employees to work at their convenience. Permanent employees often follow a schedule devised by their supervisors, while contract professionals can establish their availability at times convenient for them. When an independent contractor agrees to a project, they sign a contract with the client, which involves the start and delivery dates of the project. Usually, the contractor proposes their scheduling preferences, allowing them to choose their own hours and receive payment on their terms.

For example, a small business may hire a photographer to take pictures of its new building. The photographer informs the business owner about their availability, and both parties can agree upon a time that aligns with the photographer's schedule and is also comfortable for the client. The client gets the service they want and the photographer can continue to work during their preferred time.

Better work-life balance

A work-life balance enables you to achieve professional development and manage your lifestyle without sacrificing free time. Having a flexible work schedule allows you to dedicate time to activities you enjoy, such as spending time with family and friends or engaging in your favourite recreation. It can also contribute to your mental and emotional health, preventing you from feeling overburdened by your job responsibilities.

Having a healthy work-life balance may be essential if you want to accomplish other goals while gaining professional experience. For example, you may be pursuing a course and require additional time to attend lectures and study course material. Becoming a contract employee can help you control how much time you spend on work and personal commitments.

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Less pressure

The pressure for a temporary employee to have a successful career may arise solely from their work ethic. When a manager hires you for a permanent position, they may require you to reach certain benchmarks after adjusting to the role, and they may monitor your productivity and progress.

As a contractor, you generally control the projects you work on and how you complete tasks. You are essentially your own supervisor, which may reduce the pressure to perform at a specific level professionally. You may be solely responsible for determining your growth standards. Since you are not attempting to meet another person's requirements, you can concentrate more on your work and the parts you enjoy.

Related: How To Handle Pressure From Work (With Practical Tips)

Better compensation

A contract professional can maximise their payments from clients. Employers usually deduct funds from salary to cover benefits in conventional employment, such as health insurance and retirement plans. Permanent full-time employees may also receive salaries, meaning they earn a predetermined amount of money regardless of the number of hours they work, excluding overtime. Whereas the contract employees typically receive a guaranteed pay per hour. For instance, depending on their agreement, their pay for ten hours is likely greater than their pay for eight hours of work.

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Less commitment

Contract work offers greater mobility and less commitment than traditional employment. It is possible that the client only requires them to work on a project until its completion. Then, they can look for employment elsewhere and enter a new contract. Permanent employees often require following a formal resignation process to leave the organisation. Since a temporary employee only agrees to work with the agency for a limited time, they have a greater opportunity to diversify their work experiences.

For instance, a contract interior designer collaborates with one company to 3D render a new hotel. After they produce the agreed rendering, the designer has fulfilled their contractual obligations to the company, freeing up their schedule to move on to a new project. Their next project could be the interior planning of a high-end restaurant, and the designer informs the client that their partnership is until the restaurant's opening. If you want to work with multiple clients concurrently or frequently try out new projects, a smaller commitment may be helpful for you.

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More learning opportunities

Due to the increased mobility of contract jobs, contract employees generally have greater opportunities to learn new skills. Each project may require a specific strategy or skill, such as the ability to manage various technologies. The client may also invite you to participate in various training programmes, which can assist you in developing innovative career strategies. Experiment with new strategies and identify those that align best with your interests.

A copywriter, for instance, offers web and sales copywriting services to small businesses. Each business has a unique target audience and brand identity, requiring compliance with style guides to reflect this. Through experience, the writer may discover how to increase their output and deliver high-quality content to diverse demographics. The diversity of their clientele presents them with opportunities they may not have had as an internal employee.

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Less competition

Contract work can be less competitive than a permanent position because fewer professionals pursue contract work. You can take on interesting projects and gain experience in your industry without undergoing extensive interview and onboarding procedures. There may be less pressure to format your resume to pass pre-screening and compete with other qualified candidates. The fewer candidates competing for the same position, the greater the likelihood that you get the job.

For a full-time position in information technology, for example, the employer may receive 100 applications. Temporary employees may convince the company to pay them for their technology services for a limited time, saving the employer's time and resources in recruiting and training new employees. If you want to build a career in a competitive field, you may benefit from contract work with organisations.

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Easy to enter a full-time job

Contract work can also provide opportunities for full-time employment in your industry. An employer can assess your work quality and determine how your skills benefit the organisation. As you are already familiar with the employer's preferences from your contract, you can prioritise your qualifications to help gain an advantage over other candidates looking for a permanent job. Also, if your contract performance has already made a good impression on the hiring manager, they may be more confident in your success as a full-time employee.

A graphic designer, for instance, creates visual content for a nonprofit organisation under contract. Their consistency and quality of work helped the nonprofit establish its brand. The contract designer applies for a full-time position with the organisation, and the recruiter hires them because of their longstanding, positive contractual relationship with the organisation.

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Tips To Succeed As A Contract Employee

Here are some suggestions you can consider to succeed as a contract employee:

Balance your work schedule and personal life

Consider your ideal contract employee workday. Plan your professional activities to accommodate personal responsibilities, such as making household purchases or taking regular vacations. It is possible to implement a positive work-life balance and develop a productive routine while completing client projects. Before promoting your services, it may be beneficial to determine how you want to take and manage projects, as the companies you work with may want to know your availability in advance.

Related: 5 Work-Life Balance Interview Questions (With Answers)

Make connections in your field

Having a strong network of industry connections can also help you find contract work. After completing a project for a client, consider asking them for referrals. Learn to develop projects and expand your clientele. If you are thinking of entering a permanent job, developing professional relationships can also facilitate your transition to full-time employment. Your network may refer you to open positions that align with your interests. The success of your previous collaborations can also make a good impression on the hiring managers.

Related: What Is A Contracts Manager? Definition And Career Advice

Build a personal brand

As a contract employee, your personal brand describes you and your services. You can use your brand to promote your services and attract potential customers. Consider building your brand on social media platforms. Create content that promotes your work, payment rates and availability to complete projects. It may also be beneficial to create a logo and business cards that distinguish your work from other contractors.

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