Tech Job Opportunities: FTE vs. Contract
An IT candidate looks confused over so many tech job opportunities.

Finding the right position to match your employment needs and preferences can be a challenging endeavor. There is such a wide variety of tech job opportunities on the market today, it may even be tough to know where to start!

Fortunately, there are many resources at your disposal to assist in your search. At The Doyle Group, we are committed to helping each of our candidate clients find the perfect fit for their individual situations. 

With that in mind, the information below will address the pros and cons of three common hiring options: full-time employment (FTE), contract and contract-to-hire. Considering the differences between these options will help you make a more informed decision as you continue your job search.

FTE, Contract, Contract-to-hire: What Do They Really Mean?

Let’s briefly define what each term in our list involves:

  • Full-time employment. If you were to take on a full-time job with a company, you’d come on board as a full employee, typically with benefits. Your employer would usually set your schedule, and provide you with all the tools, equipment, and training you’d need to succeed with the company.
  • Contract. Independent contractors (ICs for short) work for clients on a project or term basis. If you were to engage with a business as a contractor, you would typically work for the company throughout the duration of a project, or within a specific time frame (for instance, 6-24 months).
  • Contract-to-hire. This is very similar to the contract option, with one major difference: the employer may decide to bring the contractor on board as a full employee at the end of their term. In effect, you could think of a contract-to-hire situation as a “probationary period” to see whether you’d be a good fit for the employer — and whether they’d be a good fit for you.

Before we really dig into the pros and cons of each option, it’s important to make a note here. Many people tend to equate FTE with stability. In today’s dynamic, rapidly changing business landscape, that assumption is not always true. The Doyle Group’s Talent Manager, Zoe Walker, puts it nicely when she says:

“When stability is a leading factor in choosing between FTE, Contract, and Contract-to-hire, candidates with little to no exposure to contract or contract-to-hire work tend to narrow their choice down to FTE only. The reality is that, FTE does not definitively mean ‘stability,’ and the benefits of contract and contract to hire tend to be overlooked.”

Now, let’s discuss some key advantages and drawbacks of each hiring option mentioned above.

Pay

Each hiring option’s pay scale will vary depending on the role, current market rates, and other factors. Of course, freelance contractors have the freedom to set their own rates, while employees and contract-to-hire workers are paid according to the negotiated rate in their employment contract. 

One study found that freelance software developers (to take one tech role as an example) make an average salary of $143,200 per year. The median annual salary for FTE software developers is $112,921. So in terms of wages alone, it would seem that contractors enjoy a considerable advantage. However, that’s not taken into account…

Benefits

It’s easy to talk about benefits for independent contractors — since they don’t get any from their clients. In contrast, full-time employees are usually covered by their employer’s benefits plan, including health insurance, 401k options, sick days, vacation time, etc. 

If you’re a contract or contract-to-hire worker, you’ll likely have to find independent coverage, work with your recruiting agency’s coverage, or join a spouse’s coverage in order to get adequate insurance and benefits.

Flexibility

In terms of FTE vs. contract, flexibility is a bit of a double-edged sword. On the one hand, it can be reassuring to have a stable routine each week as a full-time employee; on the other hand, a more structured schedule can also feel restrictive at times.

The opposite is true of contract work: it may offer much more freedom in terms of scheduling, along with a corresponding increase in anxiety in terms of acquiring new clients and lining up future work. The Doyle Group has found that many consultants enjoy contract work because it gives them a clear framework for meeting client expectations, and they can leave their work behind them at the end of each day, without having to worry about the long-term future of the company.

Of course, the disadvantage of contract work is that you won’t be able to grow with an organization over the long haul. Ultimately, it comes down to your individual preference. If you thrive off of building something permanent, then FTE may be the way to go.

Culture

Being a full-time employee with a company can be a wonderful experience, as long as the corporate culture aligns with your values and sensibilities. If it doesn’t, it can be very challenging to maintain a positive attitude during your time with the organization.

Here again, there are definite advantages to working on a contract-to-hire basis first. For instance, it can help you determine whether you’d feel comfortable within a given organization’s culture, without making the commitment to sign on full-time right off the bat.

Explore Your Tech Job Opportunities

At the end of the day, each tech job opportunity comes with its unique set of advantages and drawbacks. At The Doyle Group, we always recommend that jobseekers keep their options open to the extent possible. For example, if you’ve shied away from contract-to-hire work in the past, consider its potential advantages for your current situation. It may very well open the door to a full-time job that will meet all of your needs and wants in the (not too distant) future.

If you’d like to learn more about how to bring your job search to a successful conclusion, explore our collection of helpful resources, or reach out to our team at The Doyle Group today to begin a conversation.