Redtech Insights: Pros and Cons of Full-Time vs Contract Work

Pros and Cons of a Full-Time Job vs. Contracting 

It's not surprising that COVID-19 helped spur an increase in the number of individuals pursuing contract work rather than full-time employment.  

In the United States, 12% of the labor force began freelancing for the first time during the pandemic.  

Today, 36% of the U.S. workforce is doing freelance work. Half of these freelancers provide computer programming, marketing, IT, and business consulting services.  

Around 32% of all freelancers are independent contractors who provide goods or services to another individual or business as a non-employee. The rest are diversified workers who have multiple sources of income from a mix of traditional and freelance work (36%), moonlighters (21%), freelance business owners (6%), and temporary workers (5%). 

Contract Work as an Option for Laid Off Employees 

Unemployment rates skyrocketed in 2020 because of COVID-related layoffs. Due to the scarcity of full-time job openings, some displaced employees began looking for contract work, which was becoming more available. Nearly 50% of hiring managers reported they were more likely to use the services of freelancers due to the pandemic. 

Although the current unemployment rate is now down to pre-pandemic levels, some major companies have recently announced massive layoffs. Contracting could be a good option for those laid-off employees. 

Contracting vs. Full-Time Employment 

Contract work and full-time employment each have their advantages and drawbacks. 

One of the biggest reasons people seek a full-time job rather than becoming an independent contractor is employers' benefits – especially health insurance. Contractors can still get health insurance but generally pay for it themselves. 

Taxes can be more complicated for the self-employed. Contractors are not only required to pay federal and state taxes on their income but also for Social Security and Medicare. 

However, some individuals still prefer contract work. 

Working entirely or predominantly from home is one of the most significant advantages of being a contractor. Many employers allowed employees to work remotely during the pandemic. Although some missed the constant interaction with their co-workers, more introverted employees thrived when working from home and decided they never wanted to return to a traditional office setting. 

Contract work provides even more freedom than remote work for a full-time employer. Contractors can sometimes set their own hours, which is a huge advantage for those who want a more flexible schedule.  

Although taking the initial plunge into contract work can be scary because of the potential drawbacks, skilled service contractors make 70% more money than traditional employees. This means the more experience you’ve gained through full-time employment, the more likely contract work will be worth the risk. 

One company that provides opportunities for skilled contractors is Redtech, which connects these independent workers with clients such as Microsoft, T-Mobile, Safeco, and Holland America. Redtech also has direct hire openings on its website.