Welcome to the next edition of the Barden Recently Qualified Accountants blog series. Here Lisa Hughes ACA demystifies contract roles and answers some key questions we come across when professionals are considering a contract role.
What are the key differences between permanent and contract roles?
- Sometimes the only difference between a contract and a permanent role is that a contract is for a defined period of time initially. Quite often, the duties and responsibilities are the same as a permanent role would be, but for a defined period of time.
- If the contract has arisen due to a project or a backlog of work, the nature of responsibilities will usually differ.
- With permanent roles, you’re likely to be entitled to annual leave and some benefits, whereas quite often with a contract role, you may not be entitled to benefits, particularly if you’re on a temporary contract.
Why do contracts come up?
Contracts can come up for a number of different reasons, the main ones being…
- Maternity covers.
- Projects with a finite timeline.
- Headcount reasons and that’s the way companies do their hiring initially (e.g. many of the multinationals hire people initially on contracts).
What are the different types of contracts?
- Fixed term contracts – you will officially be an employee of the company for a fixed period of time. You will be entitled to the same amount of annual leave as a permanent employee (pro-rata for the period of your contract), and sometimes there may be other benefits on offer.
- Temporary contracts – you will be paid by, and will technically be an employee of, the recruitment agency, but you will be working for the company. Some things to note with temporary contracts
- You may be paid a daily rate.
- You may be paid an hourly rate.
- You’ll have to accrue annual leave.
- You may not get paid for sick days.
Contracts will vary in length, in most circumstances they can be anything from a few weeks up to a period of 2 years. On occasion they may be longer than 2 years.
Some of the advantages of contracts:
- At the end of a contract, you will likely have gained experience in an area that you don’t already have, and therefore you will likely have a wider pool of options available to you (e.g. if you qualified in practice and took on a 9 month contract Financial Accountant position, you will have relevant and practical post-qualified experience when coming to market again).
- It can allow a person the opportunity to experience industry and see if they like it, without being tied into a permanent contract.
- There is often a chance that your contract will be extended or made permanent, so it can be a good way of “getting your foot in the door”.
- Sometimes there are less “barriers to entry” with a contract role i.e. the client may be a little more flexible with their requirements than if they were hiring on a permanent basis.
I’ve heard that contract roles “don’t look good on a CV”. Is there truth in this?
- If you have taken on a contract role for strategic reasons (e.g. to get experience in an area that you don’t already have), then there is no negative association with a contract role. In fact, companies can often respect someone who has taken on a contract role due to strategic reasons, as it shows the person is career focused, proactive and willing to consider all options in order to further their career.
- If someone has worked in multiple contract roles, it can be a concern for future employers when hiring on a permanent basis, if they feel there is a risk of someone leaving after a short period of time. However, it really depends on the individual employer’s perspective on this.
Coming out of your training contract in 2021? Do you want to make sure you make the very best first step after qualifying? Do you want a virtual coffee meeting with an expert recruitment consultant; someone who is a qualified accountant, just like you (meet some of our team here >>>)? Do you want a little help to create your very own best financial future? No problem. Just drop us a line today on email@example.com and we will take it from there. Simple.
To read previous blogs in this series follow the links below…
We’ve put together a blog series to help those of you coming out of your training contracts. These blogs are written with you in mind and will provide you with the help, support and insights you need to make the best next step in your professional accounting career.