It used to be that contract workers were just one rung above pond scum, and two rungs above interns. They were just there to do a job the company’s employees were too shorthanded to fill, and then at the end of the contract it was sayonara.
But nowadays more and more people are working on a contract basis, some for long periods of time (probably longer than the actual perm employees, given the high employee turnover rate in Singapore). So much so that the government has seen it fit to release guidelines on how contract workers should be treated so they’re not exploited so much.
If you are currently looking for work, you’ve probably run into a few contract positions that seem to fit your skills and experience. The big problem is, these jobs are available on a contract basis only, perhaps for 6 months to 1 year. Is it a good idea to take up a job like that? Here are some things to think about.
Should you take up that contract job in the first place?
There’s no doubt about the fact that you’re disadvantaged when you take up a contract job. You miss out on many of the benefits that non-contract workers enjoy. For instance, if you’re on a three month contract stint, it’s unlikely you’re going to get medical benefits, paid medical leave or paid vacations, so skip work one day and you don’t get paid.
There’s also the fact that when your contract ends, if the company doesn’t decide to retain you as perm staff, you’ll be out of a job.
Given the disadvantages, you need to seriously evaluate if you’re desperate enough to take up the job. Obviously, if there are no other jobs on the horizon and you really need the job for survival, the answer is clear. Otherwise, ask yourself the following questions.
Is the contract the right length?
If you are applying for permanent jobs , taking up a contract job before you find one isn’t always the best idea. There are often clauses in the contract that bar you from quitting before the term is up, so it’ll be hard for you to change jobs if something better comes along.
The duration of the contract should be carefully considered. If it’s just a 3 month contract, it’s probably safe to take it up and then look for permanent jobs aggressively in the meantime, since most employers will be fine with waiting a month or two before you join.
On the other hand, long contracts of 6 months or more are best avoided unless the company is good enough to enhance your resume or there’s a high chance you’ll be retained as permanent staff.
Obviously, the ideal contract duration for you really depends on your circumstances. If you’re an A level graduate waiting to enrol at university in August, you just need to be sure your contract ends by the time school starts. For those who are out of work and looking for a full-time position, if you’re getting called up for many interviews it’s not a good idea to sign on to a long contract. On the other hand, if your job search has been very unfruitful, a long contract can help you survive the rest of the year.
Is it a good company or is there a chance of being retained as perm staff?
There’s a reason so many Singaporeans are willing to work as contract staff at foreign banks. These jobs are often thought of as a stepping stone to getting a permanent position at the bank, and even if you don’t get retained, you’ll have a good brand name on your resume and some relevant experience that will make it easier to get hired at other banks of the same stature. MNCs also tend to be more likely to retain their contract staff than SMEs.
It can therefore be a good idea to leverage a contract job to boost your resume. Even if the job ends with your contract, it’ll be easier for you to get a new job when you’re done with it.
Will you learn useful skills on the job?
Finding a job as a fresh grad or change fields as a mid career professional can be hard mainly because you lack the necessary skills to get hired.
A contract job can make it easier for you to get hired by equipping you with the basic skills you need to start working in a new field. This is especially so if entry level jobs have been hard to come by. At this point, you might even be considering working for free just to skill up, so if a contract job comes along, take it.
What are the terms of the contract?
There’s nothing wrong with working on a contract per se. But many people get turned off because so many employers try to exploit the hell out of their contract staff.
Ask to read the contract before you sign it (most people don’t bother) and you’ll have a better idea of whether this is a job you’ll regret taking up. One big clause to look out for is whether there’ll be a penalty if you terminate your contract.
Some companies will try to force you to pay back a portion of your salary if you back out of the contract, and while that’s not always legal, it could cause your a lot of grief should you try to leave.
In addition, if the contract is for a term of over three months, you want to make sure the company is giving you at least a basic range of benefits, including paid medical leave and paid annual leave.
Lots of employers try to circumvent these guidelines, for instance by breaking up a 6 month contract role into two contracts of three months. But employers like that are also the sort who see you as nothing more than a cog in the machinery, and who will not hesitate to take advantage of you… kind of like how those construction bosses treat their workers. That’s not the sort of employer you would want to work for, temporarily or not.
This post first appeared on the MoneySmart blog. MoneySmart.sg is Singapore’s leading personal finance portal that helps you to maximise your money. Compare and shop for the best deals on loans, insurance and credit cards on our site!