Defining full-time permanent employment
Stability or flexibility: what’s more important to you? When weighing your options between contract work and a permanent role, there are a few things to consider.
Permanent employment is a desirable type of work for many Australians, offering job stability, leave benefits, and more security than other employment types. A permanent full-time role entails an average of 35 to 38 work hours a week, with set working hours and pay.
In this article, we explore more about what permanent employment means and how it stacks up against contract work, to help you decide which is best for you.
What is a permanent employment contract?
A permanent employment contract is a written agreement between you and your employer for ongoing work with no fixed end date. It’s a long-term commitment between employer and employee, unlike contract work, which is temporary and often project-based. Permanent work provides the stability of guaranteed hours, leave benefits and job security, and the potential for ongoing training and career progression. A permanent contract can be offered for both full-time or part-time roles.
Permanent full time vs. contract employee
Unlike a permanent full-time employee, a contracted employee is typically employed for only the duration of a single project or for a specific timeframe. When comparing contract vs permanent Australian employment, there are significant differences in benefits, career advancement, hours and pay.
Leave entitlements
Permanent employees, both full time and part time, are entitled to benefits and protections that contract workers typically do not receive. Here are some of the mandatory benefits permanent employees are entitled to:
Sick and carers leave
Compassionate and bereavement leave
Family and domestic violence leave
Depending on the organisation, you may be offered additional benefits as a permanent worker, like bonuses and incentives, allowances, workplace perks, employee support services (e.g. Employee Assistance Program), and upskilling or further-education opportunities.
Career advancement
Permanent employees may find that they have better opportunities for career advancement. While contract workers learn new skills and gain more experience with each project they take on, permanent employees usually have the chance to work their way up their company’s hierarchy, stepping into positions with a more senior title and higher pay. Permanent employees also have access to employer-paid training, mentorship, and development programs that can help you progress your career.
Hours
Permanent employees have set hours each week. It’s a consistent and predictable routine, which helps reduce stress and makes it easier to manage your time. This certainty also means it’s easier to plan your personal life and activities around your work hours. However, for some this structured schedule leaves little room for flexibility. If you need to take a couple of hours off during the day, you usually have to ask for time off and may need to use your leave entitlements.
Contract workers generally have more flexibility and choice over when and where they work. They often have the freedom and autonomy to set their own hours, deciding where and when they work. This is an ideal set-up if you have other commitments you need to work around such as caring for family members or studying.
Many contract roles also allow you to work remotely, meaning you can work from home, a cafe, or even while on holiday, enhancing your work-life balance and reducing commuting costs. The trade-off for this flexibility is the instability of not knowing when you’ll secure your next contract. It can also mean a lack of work-life balance when working on multiple contracts at once.
Benefits of being a permanent employee
While permanent employees may not have as much flexibility as contract workers, there are plenty of benefits that come with this employment type. Here are some of the top benefits of being a permanent employee:
Job security
One of the main benefits of being a permanent employee is job security. Contract workers work from contract to contract, and constantly need to find new jobs. Permanent employees, on the other hand, don’t have a set finishing date. Instead, they can work long term at their organisation until they decide to leave. There are also unfair dismissal protections in place for permanent employees, so their employer can’t fire them without a valid reason.
Paid leave
Permanent employees enjoy a variety of leave benefits that are guaranteed under Australian law. If you need to take time off work because you’re caring for someone, have lost a loved one, have welcomed a new baby, are sick or injured, or just want to take a holiday, then you can do so and still get paid. You can also take paid leave for long service, or due to family and domestic violence, with no risk to your job security.
Constant income
Permanent workers have the reassurance of a predictable and consistent income, offering financial stability. Knowing exactly when your paycheck is coming and how much to expect each payday can help reduce financial stress and help with longer-term planning. Permanent employees also have the benefit of stable and regular contributions to their superannuation fund, meaning your retirement money continues to grow.
Access to training
When employees build their knowledge and experience it can have a significant impact on the success of the company. Developing new skills can open doors to promotions and career advancement within the organisation or at other companies. Being a permanent employee can also bring other opportunities such as mentorship and networking opportunities that might not be as accessible to contract workers.
Employee benefits
Permanent employees usually enjoy added perks on top of salary and leave. These can include things like gym memberships, meal reimbursements, wellness programs, incentives, off-site events, and supplemental payments for work equipment. These benefits can significantly enhance your work experience and overall wellbeing.
Challenges of being a permanent employee
While there are definite perks of being a permanent employee, this type of employment also comes with drawbacks.
Less flexibility
Unlike contract workers, permanent full-time employees may not have as much flexibility in their schedules. Permanent jobs usually come with set work hours that can’t be negotiated. When it comes to taking time off, there are also restrictions. You need to get approval for your annual leave dates, and if your desired holiday dates clash with your employer’s business needs, your leave request may be denied. In many cases, leave also needs to be accrued, so when you first start (or after you’ve used your leave) you’ll need to wait until your leave hours build up before you can use them.
Exclusivity to one company
Working for a prolonged period with one employer can (depending on the sector and work environment) limit your exposure to new industries, potentially restricting your experience and opportunities for career growth. There’s also a risk that you need to wait for a position to become available within the hierarchy of the company before you can get a promotion. Permanent employees may also have less control over the specific projects they work on compared to freelancers, who can choose their clients.
Less variety
Typically, your role will come with certain responsibilities and you’ll likely have limited control over your workload. This lack of autonomy means you don’t get to choose what tasks and projects you do. There may also be limited variety in the type of work you’re assigned, which can get repetitive over time. If there aren’t any opportunities to move around in your organisation, you could quickly feel stuck or bored with work.
Permanent employment offers stability, workplace benefits, and career development opportunities, but it does come with limitations on flexibility and work style. Contract work can give you higher pay, autonomy, and the freedom to choose when and where you work, but with less financial and job security. When deciding whether contract work or a permanent role is right for you, consider your career goals, lifestyle preferences, and financial needs, as well as how marketable your skills are as a contractor.
FAQs
Do permanent employees typically receive more paid time off compared to contract workers?
Yes, permanent employees receive paid time off (such as annual, sick, and bereavement leaves) that contract workers generally do not get. To compensate, contract workers can charge higher rates.
Is it risky to leave a permanent job for a contract role?
Leaving a permanent job for a contract role comes with a level of risk, and whether it’s worth it depends on your own needs and goals. Leaving a permanent job means giving up job security and employee benefits. However, contract work may offer higher pay and more flexibility. You should carefully weigh the pros and cons before making a decision.
What resources can help me compare salary expectations for permanent vs. contract positions in my field?
Online job boards like SEEK and professional networking groups can help you compare salary expectations for permanent and contract positions in your field. You can also ask people who work in your field for insights.