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

AskAsk

Exodi said:

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.

my comment comes from my experience in the IT industry, where people choose to contract because it pays 60% more than standard contracts.  we had people on 12 month contracts that had to be renewed every year because they were needed but they didn't agree to change to a permanent contract.  eventually they left as the employer did not continue to pay the high contract rates.

it may be applicable to the IT industry only.  but when i applied for a 12 months contract with the local government, the contract pay was also higher than the permanent pay, not as much as the 60% uplift you get in the IT industry, but it was there nonetheless.

Andy_L

In my experience:
FTC - same as full time staff, because they get all the same benefits as "permenant" staff
Contract/agency/self-employed - more, because they don't

Sandtree

AskAsk said:

Exodi said:

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.

my comment comes from my experience in the IT industry, where people choose to contract because it pays 60% more than standard contracts.  we had people on 12 month contracts that had to be renewed every year because they were needed but they didn't agree to change to a permanent contract.  eventually they left as the employer did not continue to pay the high contract rates.

it may be applicable to the IT industry only.  but when i applied for a 12 months contract with the local government, the contract pay was also higher than the permanent pay, not as much as the 60% uplift you get in the IT industry, but it was there nonetheless.

But are you talking contractors or FTCs? 

Contractors are totally different to FTCs as they are never employees of the client, never get the statutory rights etc.  It will vary by company naturally but a contractor on a gross 60% more will not be costing the company anything close to 60% more compared to the fully loaded costs of an employee. Take my very first client as a contractor, employees (inc FTCs) get a contractual 20% bonus for on track performance which can go up to “unlimited” for above performance. So that 60% difference is immediately reduced by the bonus... then you had the up to 16% employer pension contribution... so half the difference is gone... thats before you consider 30 days holiday, sick pay, employers NI, private medical insurance etc etc etc all of which equally apply to FTC

AskAsk

Sandtree said:

AskAsk said:

Exodi said:

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.

my comment comes from my experience in the IT industry, where people choose to contract because it pays 60% more than standard contracts.  we had people on 12 month contracts that had to be renewed every year because they were needed but they didn't agree to change to a permanent contract.  eventually they left as the employer did not continue to pay the high contract rates.

it may be applicable to the IT industry only.  but when i applied for a 12 months contract with the local government, the contract pay was also higher than the permanent pay, not as much as the 60% uplift you get in the IT industry, but it was there nonetheless.

But are you talking contractors or FTCs? 

Contractors are totally different to FTCs as they are never employees of the client, never get the statutory rights etc.  It will vary by company naturally but a contractor on a gross 60% more will not be costing the company anything close to 60% more compared to the fully loaded costs of an employee. Take my very first client as a contractor, employees (inc FTCs) get a contractual 20% bonus for on track performance which can go up to “unlimited” for above performance. So that 60% difference is immediately reduced by the bonus... then you had the up to 16% employer pension contribution... so half the difference is gone... thats before you consider 30 days holiday, sick pay, employers NI, private medical insurance etc etc etc all of which equally apply to FTC

i don't know if the IT contractors were on FTC or contracts.  i think they were on contracts, so that would explain the 60% uplift.  the local government was FTC as you were entitled to join the local government pension scheme, but again that was more pay than permanent staff.  i recollect something like an extra 20% as i did ask them if contractors were paid more than permanent staff and they said yes.

Sandtree

AskAsk said:
 the local government was FTC as you were entitled to join the local government pension scheme, but again that was more pay than permanent staff.  i recollect something like an extra 20% as i did ask them if contractors were paid more than permanent staff and they said yes.

There is a risk of mixed language again though... some may consider FTCs as contractors and others will consider them temps or employees. So by asking if contractors are paid more you are at risk of talking cross purposes with the other person.

At the end of the day a company will pay what it thinks it can/should and local markets etc may demand that temps are paid more than perms... if you wanted a Longevity Actuary with 10+ years PQE for a 9 month FTC in Aberdeen you’d almost certainly have to be paying more because you’ll be looking to attract someone from Edinburgh or such to temporarily relocate (at least weekdays).  Look for a motor claims handler to work in Chelmsford for 6 months and you’d be able to pay less than your perms if you wanted because the local market is flooded with skilled people who are currently out of work.

FTC can be higher or lower than a Perm; its not realistically going to be massively higher than a Perm else you’d just hire a perm and dismiss them in 9 months or whenever the need is over because you simply can within the first 2 years of employment. 

Day rate contracting is materially different, the rate to the contractor/employee is significantly different though the cost to the business is not as big as it looks to the employees. However for this the business gets very limited liability and a resource that they can get rid of potentially with only a days notice and can recover money from for errors/omissions. 

AskAsk

Sandtree said:

AskAsk said:
 the local government was FTC as you were entitled to join the local government pension scheme, but again that was more pay than permanent staff.  i recollect something like an extra 20% as i did ask them if contractors were paid more than permanent staff and they said yes.

There is a risk of mixed language again though... some may consider FTCs as contractors and others will consider them temps or employees. So by asking if contractors are paid more you are at risk of talking cross purposes with the other person.

At the end of the day a company will pay what it thinks it can/should and local markets etc may demand that temps are paid more than perms... if you wanted a Longevity Actuary with 10+ years PQE for a 9 month FTC in Aberdeen you’d almost certainly have to be paying more because you’ll be looking to attract someone from Edinburgh or such to temporarily relocate (at least weekdays).  Look for a motor claims handler to work in Chelmsford for 6 months and you’d be able to pay less than your perms if you wanted because the local market is flooded with skilled people who are currently out of work.

FTC can be higher or lower than a Perm; its not realistically going to be massively higher than a Perm else you’d just hire a perm and dismiss them in 9 months or whenever the need is over because you simply can within the first 2 years of employment. 

Day rate contracting is materially different, the rate to the contractor/employee is significantly different though the cost to the business is not as big as it looks to the employees. However for this the business gets very limited liability and a resource that they can get rid of potentially with only a days notice and can recover money from for errors/omissions. 

i was asking about the job i was applying for, which was FTC.   whether that pays more than a permanent role, so there was no confusion there.  the local government employ a lot of emplpyees on FTC rather than permanent.  i didn't ask them why.

Sandtree

AskAsk said:
i was asking about the job i was applying for, which was FTC.   whether that pays more than a permanent role, so there was no confusion there.  the local government employ a lot of emplpyees on FTC rather than permanent.  i didn't ask them why.

As someone already mentioned, because FTC is 95% easier to get past HR/Finance even if you continually renew them such that they legally are considered perm for many points of view.

dranzer01

theres no difference between permanent and ftc - from my experience - 

ftc just means it WILL END. So if there is a salary range, say a salary in that range. If not, say the salary you are good at.

JohnDorian

Getting paid more than a permanent depends on why they are hiring you. For a maternity cover FTC I see no reason why they would pay more. You are not adding any value - just filling in for someone else.

Where an organisation is seeking a specialist skill they cannot find in the perm market or very simply don’t need the perm skill in a full time permanent basis they are going to pay more, regardless of whether it is FTC or day rate contracting.