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Contract And Temporary Employment


The employment market has undergone significant changes over the years, and the growing demand for contract and temporary work is one of them. Contract and temporary work can offer employees flexibility, variety, and new experience. Companies, on the other hand, benefit from temporary workers who help them cope with increased demand or access specific skills.

In this article, we will cover the ins and outs of contract and temporary employment. We will explore the advantages and disadvantages of each type of employment, how they differ from permanent work, and the legal issues surrounding them.

What is Contract Employment?

Contract employment refers to an arrangement in which an individual is hired to work for a set period, which is agreed upon by both the employee and the employer. Contracts typically specify details on salary, benefits, job description, and the duration of the contract. After the contract ends, the employee leaves the company unless the employer decides to renew the contract or hire the employee permanently.

Contract employment is commonly used in industries that experience fluctuating demand, such as consulting, IT, and construction. In these sectors, companies often hire contract workers on an as-needed basis to address short-term needs.

Since contract employees’ employment is short-term, they have limited job security. However, they enjoy the benefit of flexible work schedules and higher wages than their permanent counterparts.

What is Temporary Employment?

Temporary employment, also known as temp work, is a type of employment that involves an employer hiring employees for a specific period of time. Temporary employment agencies broker the relationship between companies and temporary workers.

Typically, temporary workers are hired when a company has a sudden need for additional staff, such as during a busy time of year. Although temp work can be in any industry, it’s most common in sectors such as hospitality, administration, and manufacturing.

Temporary employment contracts are usually short-term, and the workers’ employment is terminated once the contract expires. However, some contracts may be extended if there’s ongoing demand for the worker’s services.

Temporary workers, like contract workers, can also enjoy higher pay than permanent workers. However, they are not eligible for benefits such as holiday pay, sick pay, and health insurance policies.

Contract vs. Temporary Employment

While contract and temporary employment arrangements share some similarities, there are key differences between the two.

Contract work is usually less flexible than temporary work since the terms of the contract cannot be altered once agreed upon. For example, if a contract worker signs up for a six-month contract, they cannot decide to finish the work in four months without breaching their contract. On the other hand, if a temporary worker’s contract is set to last a month, the job can be completed within two weeks if the work is completed early.

Generally, temporary workers are paid by the agency that employs them, while contract workers are paid directly by the employer. Contract workers often have a more significant impact on the company’s operations, whereas temporary workers are employed to cover short-term needs.

The Benefits of Contract and Temporary Employment

Contract and temporary employment have a range of advantages for both employees and employers.

The flexibility granted to contract and temporary workers is often the primary advantage. These employees can enjoy a non-structured work-life, enabling them to take sabbaticals or switch industries with ease. On the employer side, temporary workers can help companies meet seasonal peaks in demand, test out new business strategies before committing to permanent employees, and access a broader pool of talent.

Temporary and contract work can also offer a higher pay scale than permanent employment. This is because companies generally pay a premium for short-term employment for their varied skill sets. For employees, contract or temporary workers, this means that projects completed within a short period of time can provide a higher hourly rate than a typical salaried job.

Lastly, temporary and contract work can offer professionals an opportunity to broaden their skills and experience across industries. This broadening can become valuable additions to their resume, highlighting their cross-disciplinary abilities and making them more attractive prospects to permanent employers.

The Disadvantages of Contract and Temporary Employment

Temp and contract work also has some shortcomings. Most significantly, workers in these arrangements miss out on the job security and benefits that permanent employees enjoy. Hence, illnesses, injuries, and other incidences that can force temporary or contract employees out of work can be financially and professionally isolating.

Workers in temporary and contract engagements may also lose touch with their industry’s professional and social worlds. This lack of engagement can impact their ability to network and job search for future roles.

Lastly, intermittent periods of temporary or contract work can create challenges in implementing long-term financial plans, purchasing a mortgage or obtaining loans as often they require documentation that shows a steady income source.

The Legal Issues Surrounding Contract and Temporary Employment

Both contract and temporary work arrangements involve specific legal obligations. These can be financial or contractual in nature.

The main concern for contract workers is the terms of their contracts. To ensure that terms are mutually agreed upon, contracts must be carefully drafted, signed, and clarified for both parties. Clear provisions should outline the length of the contract, salary, job description, benefits, and termination process.

Temporary workers, when working for an agency, are generally treated as agency workers rather than employees of the businesses where they work. The Agency Workers Regulations (AWR) provide basic protections and rights for agency workers. Among other things, these include the right to be paid the same as comparable permanent employees after working for the company for twelve weeks, access to the company’s facilities and provisions such as canteens and parking lots, and information about potential permanent employment prospects.


Contract and temporary work can offer employees the flexibility, varied experiences, and a potential pay premium. Employers can take advantage of this model to manage peak demand, test new business strategies, and access a broader pool of talent. Despite the advantages of temporary and contract work, though, it is important to carefully consider the implications of job security, missed benefits compared to full-time employees, and sometimes murky legal obligations.

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