Contract work or full-time employment? What to consider before deciding

When I graduated from university at the tail end of 2022, I remember a feeling of uncertainty washing over me. 

I wasn't sure which career path to take or what jobs were available given the ongoing COVID-19 pandemic then. 

I also graduated a semester earlier than most of my friends, so I didn't have any peers in the same boat to commiserate with or ask for advice. 

By sheer luck, I received a message on LinkedIn asking if I would be keen to become a business reporter, and if I could jump on a call with the editor. 

The call turned out to be a job interview, which I was sorely unprepared for, but the company still offered me a full-time role. 

I wasn't sure I'd enjoy the work, and had been contemplating a fellowship overseas, so I did something much to the horror of my family and peers: I asked if the job could be a contract role instead. 

The company agreed to take me on for six months with a clearly written email that there was an opportunity to convert to a full-time role after. 

Those close to me were puzzled by my decision. The comments and questions came quickly: "Why take on a job with a deadline?", "Do they pay as well?" and "You might as well take on an internship". 

Two months into the contract, I was offered a job at what was then TODAY Online. 

Because my contract came with a one-month notice period, I was able to make the switch relatively easily, unlike if I had a full-time role with a longer notice period. 

At the time, choosing a contract role felt unconventional. These days, though, such arrangements are becoming more visible in Singapore's labour market, what with stiffening competition for jobs and rising concerns about "jobless growth".

Several recruitment firms told CNA contract work is gaining ground as employers seek more flexible manpower arrangements and workers become more open to such roles.

The Ministry of Manpower's report on Labour Force in Singapore 2025 showed that around 7 per cent of Singapore's workforce are on a contract basis.

So if a contract job offer comes around, what should one consider before making a decision?

TYPES OF CONTRACT WORK

Mr Ken Tan, head of sales at recruitment firm Persol Singapore, said that contract work comes in different forms.

There are fixed-term contracts, where people are hired for a set period. Such jobs are commonly used for information technology roll-outs, infrastructure projects and regulatory audits, he added.

There are also project-based or outsourced roles.

"In this case, you are employed by an outsourcing partner and work within the client's operational environment, so the day-to-day responsibilities may look very similar to a permanent role," Mr Tan said.

Then, there are part-time specialist contracts. These contract jobs are usually placed by companies looking to hire experts for a set number of hours in a weekly to manage specialised functions, such as accounting reconciliation. 

Besides that, there are also more on-demand contract roles for operational workers to handle periods of high demand or cover an employee's absence. 

These include contracts to cover the responsibilities of a team member on maternity leave, or to handle holiday retail surges and peak commercial cycles for different companies.

Mr Tan also said that with the rise of artificial intelligence, rising business costs and increasing uncertainties globally, more businesses are hoping to build "leaner, more agile teams that can respond quickly to market shifts". 

"Contract and outsourced talent are increasingly seen as strategic workforce solutions, which allow businesses to stay flexible and competitive," he said.

Mr Stuart Clark, the managing director for contracting and interim solutions at headhunting firm Ethos BethChapman, said that companies' demand for contract work is not about cost-cutting.

"Companies are hiring around specific trigger events such as a transformation, an acquisition, a regulatory change, or a leadership gap," he said.

He added that in Asia, contract jobs are increasingly prevalent in financial services, technology, management consulting, and consumer industries, where "change is constant and specialist skills are scarce".

PROS AND CONS

Experts said that both full-time and contract work have their pros and cons. 

Contract work gives workers more variety and, more often than not, moves at a different pace from regular full-time work, Mr Clark said.

"You take on new challenges, industries, and teams, and build a broad skill set faster than you might in one permanent role.

"Many contractors also value the flexibility rather than direct financial rewards."

Mr Tan said that contract work can give professionals more control over how they structure their time, based on what type of contracts they choose – something that can be crucial for people juggling personal commitments such as family caregiving.

Another key benefit is that contract work can have higher earning potential.

"Companies pay for speed, expertise and flexibility, so professionals with in-demand skills can move strategically across projects and grow their earnings," Mr Tan said.

Mr Rob Wisdom, a senior director for contracting and interim solutions at Ethos BethChapman, said that contract work allows people to apply their expertise across different industries, and take on "complex, high-impact transformation programmes" in different companies.

"It also offers the opportunity to gain exposure to different business environments, broaden your experience and build a strong portfolio of successful project delivery."

However, Mr Clark noted that contract work does come with less job security, and people may find themselves with gaps between job contracts.

Contract work also means that there are fewer opportunities to build long-term relationships within a single organisation, he said. 

Mr Tan said that for people who prefer predictability and highly structured career paths, transiting between different contract roles can be difficult.

"It also takes stronger self-management, because you have to think actively about upskilling, networking, and your next opportunity," he added.

"That said, permanent jobs may not automatically guarantee security in today's economy. Career resilience increasingly comes from adaptability and skills relevance, not employment type."

WHAT TO CONSIDER BEFORE TAKING A CONTRACT ROLE

Experts told CNA that people thinking about taking on a contract role should consider other factors after weighing the pros and cons.

One thing to look at is the scope of the job, Mr Clark said. What does the company need delivered, and how will they measure success?

From there, people should consider the practicalities of duration, whether it will be possible to extend the contract, how long the notice period is, and what benefits they're entitled to, he added.

"Equally important is assessing whether the role aligns with your expertise and where you can make a meaningful impact."

Career resilience increasingly comes from adaptability and skills relevance, not employment type.

Mr Tan also advised: "Choose an established outsourcing provider, so the opportunity is legitimate and you have structured human resources support and access to ongoing opportunities."

He also said that candidates for contract work have the same rights to negotiate salary and employment terms, as they would for a permanent role. 

Although contract work often has a termination date, it is possible to convert a contract into a full-time role.

"It's quite common, and worth asking about upfront," Mr Tan suggested.

However, conversion is not the only measure of a good contract, he said.

A contract role can be worthwhile if it builds skills, gives useful exposure or moves you towards a clear career goal. 

That being said, it can be riskier when it becomes a series of short jobs without direction.

Mr Tan added: "Many professionals take contract roles to experience different ways of working and business cultures, and when they find one that suits their long-term career aspirations, they choose to settle down.

"Whether that's possible also depends on whether the company has permanent headcount to offer, so timing plays a part."

Although it might seem that having professional experience would make contract work more viable, fresh graduates and employees can benefit from taking a contract job from the get-go, the experts said.

"Contract roles can be one useful pathway for younger professionals to gain exposure and experience," Mr Clark said.

"Depending on their goals, internships, graduate programmes and permanent roles can also provide valuable developmental opportunities."

Where it can get complicated is when an individual, drifts between short assignments with no clear direction for a career path or industry.

"Graduates do best when they pick roles that build a coherent story, with each one adding a new skill or type of experience," Mr Tan said.

Personally, being on contract straight out of university worked out well for me. 

It gave me room to find out what kind of work suited me without feeling locked in, while still leaving open the possibility of staying on if the company wanted to retain me. 

Looking back, I did not know where the role would lead, but it gave me the confidence to take the next step in my career.

Source: CNA/lo/ma/sf