Fixed-term Contract vs. Temp
You will often hear contracting opportunities referred to as either a ‘temporary contract’ or a ‘fixed-term contract’. Here we explain the differences between the 2 options and give you some things to consider when assessing what is the best option for you when hiring a HR Contractor.
Temp Contract
This is when the candidate is paid on an hourly or daily rate by the Recruitment Agency (like Peoplecorp).
Usually the most straightforward option for a short-term contract of 9 months or less. The Contractor records their hours or days and submits a weekly time-sheet for approval by you, the Client. We then invoice the Client on a fortnightly basis.
Key Points
- Allows for a lot of flexibility in terms of shortening the contract, usually only needing to provide 5 days notice. It is also easy to extend the contract should you wish.
- It mitigates your risk if the contractor chooses to leave before the assignment is complete, as you have only paid recruitment fees for the work they have actually done.
- If timing is of the essence, it is probably the quickest way to bring a candidate onboard.
- Putting candidates on our payroll means the back-end work is already done and onboarding can often be completed in a few hours, to ensure an immediate start.
- Keeps the Contractor off the books if you don’t have the headcount to hire someone onto the company payroll.
Fixed Term Contract
This is when the candidate is paid by the Client directly on a pro-rata fixed term salary according to the length of the contract.
These roles are sometimes called fixed-term contracts because there is a well-defined need with a fixed end date.
Key Points
- Often a better way to go if you are looking for someone longer term, e.g. to cover a parental-leave or to replace someone on secondment.
- The candidate will receive the pro rata benefits of what is available to permanent employees, like accrued personal and annual leave.
- It’s important to note that the Candidate and Client will usually need to give one another four weeks’ notice should either party wish to terminate the contract early.
- The candidate can feel more engaged for the long term given they will feel more like a permanent employee.
- You should consider that you are paying the full recruitment fee up front when the candidate starts, just as you would for a permanent hire. Given, you are only committing to that candidate for a finite period of time, there is a risk they might leave for a permanent role.
Feel free to reach out to one of our team to discuss all of this further, and we will be able to talk through which is the better option for you.