There are still reservations when it comes to contracting so I wanted to present what to expect as well as address reservations which will hopefully ease your approach to contracting.
You may have noticed an increased number of calls from recruiters about contracting opportunities or an increased number of approvals for contracting positing, in particular within financial services. This trend has followed across the world in uncertain economic times where demand for contracting professionals equals or even outweighs in parts, including the US and the UK.
Why do companies recruit for contractors?
We have two types of contracting roles:
1) due to an urgent need for a resource which the organisation is unable to add as a permanent head count
2) a resource needed for an allocated project which needs to be completed in a certain time frame
Is your role safe for the duration of the contract?
In both cases described the budget would not be approved unless the position was safe. The fact that the approval is given even though they are unable to grow the staff count means that these hires are business critical therefore you should feel confident that your position is vital for the team.
Do I get a premium for contracting?
You can often expect a premium; this is due to the fact that you won’t have the same benefits as permanent employees. This doesn’t apply to all contracts, check with the organisation or your recruiter as it is also common to include similar benefits as permanent employees.
What happens at the end of the contract?
Unless you have completed the projects which you were recruited for within the allocated time you will find yourself with a number of options nearing the end of your contract. Extending the term is the most straight-forward approach, a new term is agreed and at this stage you may negotiate a new salary pending on benchmarking.
If the organisation has its head count increased there is also the possibility of converting your role to a permanent position. In this case your overall package will increase due to the added benefits; therefore you can expect a similar base salary or depending on the benchmarking within the organisation there may be a drop as the contracting premium will no longer apply.
What is the difference between ‘agency payroll’ and ‘direct hires’?
Both methods are secure with the main difference being where you get your pay cheque from - your agency or directly from the organisation. It will also have an impact as to who applies for your employment pass if applicable. With ‘agency payroll’, you will be allocated a payment date just like in direct employment and you will usually have to submit a time sheet of number of days worked, overtime and holiday taken.
How prevalent is contracting? Is it a growing market?
Considering that the Asian market is just a few steps behind the US and European market, we will be witnessing a significant increase in the number of contract roles. A safe approach is to hire new staff on contract to help support growth. This still means that they do not miss out on top talent just because they are unable to get approval for a permanent hire.
What is the onboarding process like? How long does that take?
Onboarding a contractor is much quicker in relation to a permanent hire. Ideally, you will be able to join an organisation immediately where they will have the right support to make sure that this happens without any problems. Much of the time, a contractor will take a significantly less amount of time to make a strong impact on a project due to their previous experience.
What are the chances of being converted to permanent employees or would it be based on that contract?
‘Conversions’ and ‘extensions’ vary from organisation to organisation. If there is a need for a member of staff in the first place and not just due to a specific project, it is much easier or the organisation to extend a contract or turn the role into a permanent one. In certain cases, you will know if your contract is going to be extended or turned into a permanent role even before you are hired which helps in the long run but this differs for each organisation.
Working as a contractor will give you as much exposure to promotion as a permanent employee. If you hit the ground running and you are capable of taking on more responsibility you will be put forth just like a permanent employee. Many organisations provide educational courses and targeted career progression plans as soon as you join which allows them to retain good talent.
Do I get CPF? What about holiday and medical leave?
Your CPF is not affected and will be the same as if you were in a permanent role, if you are eligible. When it comes to holiday and medical leave they will be agreed before you start your contract. Majority will have the same for both types of employment.
Foreign professionals in contracting?
The main difference here is who applies for your employment pass, if you are on the payroll of the agency they will process your pass but if for example you are on a fixed term contract or a direct contract it will be the organisation.
I hope I have given you some insight into the contracting space and good luck with your current and future contracting positions. Please get in touch if you have any further questions or are interested in exploring contracting.