Fixed Term Contract - do they usually pay more than perm?

horsepills

So I've always been on a permanent contract and have never really done much research on FTCs   After recently being made coronavirus redundant, I'm about to have a second interview for a maternity cover/FTC role, and I'm wondering how I should respond to the inevitable "what are your salary expectations?" question.  Ordinarily I would have a figure in mind for a regular annual salary for a permanent role - should I just use this, or would it be reasonable/expected to add a % on to make up for the fact that it is only a 12 month contract?

AskAsk

if by adding on a percentage, you are still within their offer of salary range, then do that.  if it falls outside of their salary range, then don't do that.

TELLIT01

There is no 'usual' in this situation.  I would expect the majority of employers simply to pay the same rate as they would pay to their permanent staff.  If they have problems with short term recruitment at the normal rate they may offer a premium.

Sandtree

FTC is normally paid at full time rate; potentially a small uplift if its known that it will certainly end at the end.

You have to remember that a Permie can be gotten rid of in the first 2 years without explanation and so if FTCs were paid a premium you’d just hire perms and then dismiss them after 9 months or whatever the required period is.

Brynsam

horsepills said:

Ordinarily I would have a figure in mind for a regular annual salary for a permanent role - should I just use this, or would it be reasonable/expected to add a % on to make up for the fact that it is only a 12 month contract?

Why would you be worth more to an employer because you are on a fixed term contract? You'll have a steep learning curve in the first few months simply to get to grips with the organisation and the people there, so if anything I'd expect to see the role paying less than a permanent equivalent.

horsepills

Brynsam said:

horsepills said:

Ordinarily I would have a figure in mind for a regular annual salary for a permanent role - should I just use this, or would it be reasonable/expected to add a % on to make up for the fact that it is only a 12 month contract?

Why would you be worth more to an employer because you are on a fixed term contract? You'll have a steep learning curve in the first few months simply to get to grips with the organisation and the people there, so if anything I'd expect to see the role paying less than a permanent equivalent.

because I have the technical skills and experience to do the role from day one with very little onboarding, I guess....and they can get someone in to cover maternity without having to sign off on an extra permanent role (there are numerous benefits to the organisation) getting to grips with the org and people can be done alongside just getting on with some immediate tactical activities.  As I said, I do not know much about FTCs so I was simply asking the question.  From my perspective it is far less attractive to be taking on a 12 month contract than a permanent position if the salaries are the same - it's one of the reasons why day rate contractors are paid more, so I don't think it's an unreasonable question to ask.

AskAsk

Brynsam said:

horsepills said:

Ordinarily I would have a figure in mind for a regular annual salary for a permanent role - should I just use this, or would it be reasonable/expected to add a % on to make up for the fact that it is only a 12 month contract?

Why would you be worth more to an employer because you are on a fixed term contract? You'll have a steep learning curve in the first few months simply to get to grips with the organisation and the people there, so if anything I'd expect to see the role paying less than a permanent equivalent.

most short term contracts will pay more than permanent comtracts, as it attracts people who move around to get more money in exchange for less security.  contractors are often expected to pick up things very quickly or come in with advance knowledge.

Sandtree

horsepills said:
because I have the technical skills and experience to do the role from day one with very little onboarding, I guess....and they can get someone in to cover maternity without having to sign off on an extra permanent role (there are numerous benefits to the organisation) getting to grips with the org and people can be done alongside just getting on with some immediate tactical activities.  As I said, I do not know much about FTCs so I was simply asking the question.  From my perspective it is far less attractive to be taking on a 12 month contract than a permanent position if the salaries are the same - it's one of the reasons why day rate contractors are paid more, so I don't think it's an unreasonable question to ask.

Those are all things that simply mean you get the job offer or you get paid at the higher end of the band (assuming there is a band... guessing your not doing factory work or something else thats fixed rates) not something that says you should get paid more than the identical person taken in on a perm basis.

Day rate contractors are paid more because they don’t get pensions, employee discounts, holiday, sick pay, private medical, company cars etc, our FTCs have a 1 month notice period either way, our day rate contractors have a 1 day notice period either way, no employers NI, no EL insurance costs for the employer/client, the client/employer can claim from the contractors PI or not pay them if they mess up or don’t deliver (though its rare). 

Stay on FTC long enough and you gain full employee rights... stay a contractor with a client for 20 years (as I knew one chap did) and you dont (but are potentially going to find HMRC wanting more tax money if they spot it).

I’ve twice taken day rate work to cover maternity or secondments and both time I was offered perm as the person ultimately didnt return... I didnt take it because I prefer day rate... but it shows that FTC can move to Perm just as a Perm role can have you leaving in 12 months through no fault of your own

Brynsam

horsepills said:

Brynsam said:

horsepills said:

Ordinarily I would have a figure in mind for a regular annual salary for a permanent role - should I just use this, or would it be reasonable/expected to add a % on to make up for the fact that it is only a 12 month contract?

Why would you be worth more to an employer because you are on a fixed term contract? You'll have a steep learning curve in the first few months simply to get to grips with the organisation and the people there, so if anything I'd expect to see the role paying less than a permanent equivalent.

As I said, I do not know much about FTCs so I was simply asking the question.  From my perspective it is far less attractive to be taking on a 12 month contract than a permanent position if the salaries are the same - it's one of the reasons why day rate contractors are paid more, so I don't think it's an unreasonable question to ask.

And I was answering you, based on first hand knowledge of drafting such contracts for employers.

Your perspective isn't the employer's perspective, especially at present, so your ability to negotiate, however good you believe yourself to be (and indeed are!), is much more limited now there are so many millions heading for the dole queue.

Tealblue

horsepills said:

So I've always been on a permanent contract and have never really done much research on FTCs   After recently being made coronavirus redundant, I'm about to have a second interview for a maternity cover/FTC role, and I'm wondering how I should respond to the inevitable "what are your salary expectations?" question.  Ordinarily I would have a figure in mind for a regular annual salary for a permanent role - should I just use this, or would it be reasonable/expected to add a % on to make up for the fact that it is only a 12 month contract?

You may well be asked the question, but the potential employer will only agree if the figure you had in mind is lower than the one they have in mind. In today's market jobs all too often turn out to be short term, whatever an employer might claim/hope. Keep in mind that if you are going be an employee the employer is on the hook for the normal benefits such as pension, will have to pay employer's NI etc so comparing salary with a day rate for a contractor providing services through their own limited or umbrella company isn't a valid comparison.

Exodi

Completely agree with Brynsam's comments. As an employer, I would go as far as suggesting it's more likely you'll offer less for a FTC than a permenant contract for many of the reasons Brynsam listed. It has never even come in our minds that we should pay more for temporary staff member than the perm, just because they're temporary - temps are already expensive enough to a business.

AskAsk said:

most short term contracts will pay more than permanent comtracts, as it attracts people who move around to get more money in exchange for less security.

Completely unfounded and very unlikely to be true. I bet you'll find that people aren't going for temporary roles as their first choice and would often prefer a permenant role.