Businesses can use different types of employees to meet their labor needs at a reasonable cost. Besides part-time and full-time positions, one of the major differences between types of employees is those who perform contract work and those who hold permanent positions.
The key difference between contract work and permanent employment is the expected duration of the relationship between worker and employer. Contract work usually involves a set time frame, with the employer only agreeing to hire a worker for the duration of a project or time. Permanent employment is open-ended, with no formal or implied end date. Many businesses use permanent employees to form the core of their workforce and contract workers to fill in gaps or help complete special projects as needed.
The hiring process for contract workers and permanent employees is different out of necessity. When a business hires a contract worker it is more concerned with the worker’s specific skills and ability to perform a task. With permanent workers, issues about growth potential and the ability to integrate into a team play a larger role. Contract workers draw their designation from the fact they must generally sign a contract of employment that specifies the terms, including wages, and duration and scope of the project. Permanent employees may also sign employment contracts, usually these contracts do not have set durations, the expectation that strong performance will result in ongoing employment with the company.
Benefits for Businesses
Businesses can save money and employ a flexible workforce by combining types of employees. This reduces the number of idle employees when there is less work to do. It also lets an employer bring in an expert to complete a specific task without keeping that person on staff. For example, a construction company may contract with an electrician only when it takes on a job involving major electrical work or during the portion of a construction project that requires electrical wiring. This saves the company money since contract workers don’t earn benefits or require the employer to pay payroll taxes, including unemployment insurance contributions.
Business is also able to try before they buy!
When a company employs a contract worker and later decides they would like to hire that worker permanently, ASAP Canada Staffing Services will take whatever fee has been paid for that worker off permanent placement fee so extra charges are not incurred and client is given flexibility it needs to run an effective and efficient work force. Example contractor is hired for one year term, after 5 months company decides to take contractor on permanently. Fee will be perm fee minus whatever company has paid for contractor so far that year.
This service process allows the client to test the candidate at the workplace – as a probation period – before making the decision to bring the candidate onboard