Advantages & Disadvantages of Toggling Between Contracting and Fulltime Work
By Jeff Altman, The Big Game Hunter
ChatGPT and I offer our opinions of the advantages and disadvantages of toggling between contracting and full-time work.
BTW, I misspoke at about the 9-minute mark when I said commuting expenses were deductible for employees. They aren’t for employees. They are for contractors
00:00 Introduction
00:36 Advantages of toggling
05:57 Disadvantages of toggling
09:18 A few add-ins from me
11:59 Summary
12:28 Outro
I’m a Contract to Hire Consultant and Have a Full Time Offer Elsewhere
I’m gonna be speaking with you today about the advantages and disadvantages of toggling between contracting and full time work. I’m Jeff Altman, The Big Game Hunter. People hire me for no BS job search advice and coaching globally, because I make things much easier for people around their search, and a lot more.
Now, I started off with a chatGPT search because I was curious what they would say, and I wanted to critique their answers plus offer a few of my own.
So in the advantages of toggling between contracting, and full-time, they start off with higher pay. Consultants typically make more on an hourly basis than full-time employees. Generally true. And if it isn’t true, you probably shouldn’t be doing it. So for example, for those of you who are making the $75 an hour, that equates to about 150,000 a year, the typical full-time employee isn’t going to be making that. So there is a differential between full-time and contract work.
Overtime. Generally, and there are always going to be exceptions to these points. Full time employees are not going to be eligible for overtime. Skills development. Full time employees may miss out on opportunities to expand their skill sets. Why? Because they’re kind of put into a box by the nature of the work that they’re currently doing. That may or may not be true. It’s really going to depend on the organization that you’re working with.
Number four, flexibility. Consultants have more control over the kind of work they take on and can tailor the companies they work with to follow their ideal career path. I’m not so sure about that. Again, it depends. Career Path. No. I think fundamentally, as a consultant, yes, you do have flexibility, because you move from one assignment to another. But often consultants will take on whatever is offered to them, that fits the price that they’re willing to pay, the location, a variety of different things. And in that regard, yes, they make a decision. But it’s really going to depend on the market and skill sets.
Job security. This was a fun one. Full-time employee roles typically offer greater job security, according to chat GPT. Is that really true? I’ll leave it to you to answer but I do know that every time there’s a recession, yes, consultants get pushed out. But so we have a lot of full-time people. And the problem is the full-time people have been earning less than the consultants have been able to bank less, because they’re making less, and thus become frightened more quickly about compensation,. Freedom. Freedom falls into the category with flexibility. Consulting offers more freedom and flexibility in terms of when, where and what you work on. What you work on, I’m not so sure sometimes because, after all, you won’t end up in situations where you get the offers just like full time people.
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When and where yes. You do have choices about that, particularly the when you can take time off and no one’s going to look at you and go, “excuse me. You’re taking three months off. That becomes your choice about when you work and when you don’t work. So, yes and no on that one.
Project specific. Consultants are typically project-specific, while full time employees can be moved to a variety of projects once hired. The movement of employees will tend to be limited in most firms. Matter of fact, in many firms, once you join in that role, you will always be in that role. And there is no mobility where there are options for advancement, somewhat limited. So I’m going to defer to you in terms of how you interpret that.
Accountability. As a consultant, you need to create your own work structures and be accountable for your impact. Well, this is a fun one, accountability. You know, employees have to be accountable, too. They’ve got a manager, a boss, a senior leader, whomever who make . . . the organization may create the work structure, but you act alone really have to deliver. As a consultant, often, you’re stepping into someone else’s work structure and have to deliver as well.
This one’s a little bit ambiguous, I’m not going to go beyond that. Soft skills. Consulting requires strong soft skills such as empathy and agility. Not so sure about that. Full-time people require that as well. And working with colleagues, with senior management and such. Training. Employers may provide training to their full-time employees, while independent consultants are responsible for finding and paying for their own training. Again, generally true for the consultants; not always true for their full-time employees. I’ve seen so many people who’ve had to pay out of pocket for their own training. And thus, this one I think, is not true.
Now, the disadvantages. Again, this is, to some degree is the flip of what I’ve spoken about full-time employees. They have more job security than consultants. Yeah, no so true. No overtime. Full time employees are not eligible for overtime. Generally true. Limited skill development. Full time employees may miss out on opportunities to expand their skill sets. True. Lack of in-house knowledge. Consultants often lack knowledge of in-house procedures which can create more conflict. Also true but the consultants normally sort that out. The institutional knowledge of working in an organization has some effect on the consultant’s performance. But most consultants are quickly adaptable. And thus, that institutional knowle dge that the full-time employee may possess, I think, is overrated here.
Limited control. Employers have limited control over independent contractors who are guided only by what is spelled out in the contract. In theory, true; less so in practice. Tax implications. Contract employees have to factor in tax implications, as well as the cost of travel, supplies and health insurance. I must say they have the advantage of having those costs of travel and supplies deductible, whereas a full-time employee does not. The cost of health insurance can be very expensive and does have to get factored into a consultant’s rate. So yes, that part is also true.
Training. And consultants are responsible for finding and paying for their own training. And often as I said, full time employees are as well. Consultants are typically project-specific, while full time employees can be moved to a variety of projects once hired. And then I’ll add on “and not always to their liking.” Often not to their liking, and they risk losing their jobs to outsourcing. The contractor knows when it’s coming, because the contract makes it very clear. \
Number nine. End of contract. Consulting positions are meant to end after completing a project. Very true. You know, when your work is going to end. You have the opportunity to market yourself in advance because you know when it’s going to terminate and find something that’s going to make sense for you.
Yeah, here comes expenses. Again, the expenses of commuting, frequently traveling and covering other expenses do quickly add up and cancel out the higher hourly rates of a contract person. Now, as I said, commuting and other expenses are normally deductible for the consultant. For frequent traveling, which I’m going to assume is getting on a plane or going somewhere are going to wind up being reimbursable. A consultant is not going to travel out of pocket to go to a location.
So let me add in as a contractor, you have to continuously be marketing yourself. In theory, you as an employee has to do that as well. However, most employees skate on that. As a contractor, you know you have to do it. You may also have downtime between assignments that you have to factor in, and most consultants know to do that. You also, and this is really the big one that I always have concern about, once you get to a certain level of billing., you start to be comfortable with that. And thus, when you’re making let’s say $100 an hour, that equates to $200,000 a year. But your real value for full time work may be 125 to 140, or 150. Because you’re, you’re a highly skilled doer, and not a leader, which is what corporations look for in the $200,000 a year a person.
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On the other side of this, for employees, they often become complacent. They know where their desk is; they know where they’re going to work every day. They become comfortable and don’t do the kind of things for self-promotion internally or externally that are so critical in our modern times, that you have to be thinking of. Contractors know to do this. Lastly, you may not have the internal. . . I’m sorry, this is not the last one . . . you may not have the internal mobility you need or want as an employee. You may have to change jobs more than you think. You may not need the benefits offered but no one’s going to pay you the amount you’re saving them.
After all, your wife, husband or partner may be getting far better benefits than you are and they can get you on their plan. And you’re saving your employer $15,000 a year, $20,000 a year in health insurance costs. And they’re not going to turn around and say, “Oh, we’ll pay you the difference.” No, you’re stuck at that one salary. There’s no benefit to you there. The work you do as an employee may become repetitive.
You may wind up working for idiots and jerks (which I think is true of both). But it’s always a problem. And this is also true of both. Your opinion may not be valued.
So I want to offer some advice for you and some observations. ChatGPT was helpful with this. You have to think this through and speak to people. This is the way you want to approach your career, toggling between full-time and contract and I think does make sense. But there comes a point where you have to settle in for the long haul. And, again, I’ve laid out the benefits and disadvantages of each.
So I hope you found this helpful. I’m Jeff Altman, My website is TheBigGameHunter.us. Go to the blog and go exploring. There’s a lot there that will help you. Plus you can schedule time for coaching with me. Ask me questions through Trusted Advisor Services. Find out about my video courses, books, and guides. Again, there’s a lot there to help you.
Also, connect with me on Linkedin at linkedin.com/in/TheBigGameHunter Have a terrific day and be great!
ABOUT JEFF ALTMAN, THE BIG GAME HUNTER
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