Contract Staffing – Types, Advantages and Disadvantages

In this area of cost-cutting where every company wants to maximise their productivity by economising on their costs. At this scenario, the context of contract staffing comes into the picture which is extremely beneficial to both the employers and employees.

Contractual staffing is a system of recruiting employees for the short term. This means that the companies hire the employees on contract for a specific time period instead of hiring them as permanent employees. One of the most significant reasons for the growing popularity of contractual jobs is the flexibility it provides. These kinds of contracts can be seasonal contracts, part-time contracts and even independent contracts.

Types of Contract Staffing

Contract staffing has a number of subdivisions and types which are discussed under the following mentioned heads:

Part-time Contract

A part-time contract is the kind of contract staffing where the employee is bound by a contract of work hours. He/she gets all the opportunities as well as protection as that of a full-time employee. But a part-time contractual employee works for lesser work hours and has a fixed pay in terms of those work hours. Especially candidates who want to carry on with their education or skill development resort to this type.

Fixed-term Contract

Fixed-term contracts are those which are bound by requirements. These contracts are generally made against a single project and when the requirements of that project is met, the contract gets terminated. A fixed-term contract may extend in time but does not extend in requirements. It provides fixed pay and protection to the employees but lacks in continuity.

Agency Staff

In these contracts, the employees are fully hired by the agency but work for other companies. This happens because many companies employ agencies to get their work done. These agencies henceforth employee these contractual staffs. Here, the employees work for the companies but are paid by the agencies itself.


This is when an individual has an in-demand skillset, so he/she applies to one or more organisations which hire this employee on a contractual basis to deliver the needs of the company.

Zero-hour Contract

This is a kind of contract where no specific time or hours of work is mentioned. These staffs are needed “on-call”. When there is a specific need, these staffs are called for and after it is finished they are free to work or look for opportunities somewhere else.

Contract Staffing

Contract Staffing Advantages

Contractual jobs have dynamic benefits. The best feature of such staffing is that its benefits are not one-sided. It reaps advantages to employees, employers and entrepreneurs alike. Below listed are the ways in which Contract Staffing in the organisation helps employees and entrepreneurs/employers.

To Employees

In terms of the modern-day employees, the legal guidelines related to contractual staffing mean more command over timetables and sort of work and more control over the schedule which gives higher adaptability.

Rather than thinking about routine nine to five work, employees can work in accordance with the contractual personnel guidelines. This will help the employees to choose a schedule for themselves that is more in accordance with their calendars and needs. They have power over their remaining workload, the idea of their work, and also the degree and amount of costs involved. A contractual employee can represent considerable authority in one kind of work or fabricate a wide range of employments consistently.

High wages and salary is also a way in which contractual jobs benefits the employees. Since the employees have complete authority over their own workload, it means that they can be engaged in multiple contracts with different organisations. These employees are low maintenance and hence earn relatively more than full-time employees.

To Entrepreneurs/Employers

The contractual employees offer certain advantages for workers and bosses. These employees show signs of improving access to work, while organizations cut costs, increment efficiency, and utilize a wide system, on-request. Contractual staff or employees show clear signs of increased productivity while the companies actually incur relatively low costs on them. It isn’t astonishing that 65 per cent of managers accept that they will expand the utilization of Contractual workers guidelines later on. Join this pattern with the advancement of inventive cell innovation by making it simpler than at any other time for workers to interface with work searchers. It is additionally simple to perceive how contractual staff can make a business progressively productive, successful and positive.

Contractual workers are progressively adaptable in adjusting to changing economic situations and work prerequisites. The capacity to coordinate an assortment of work to critical requirements is a major favourable position whenever oversaw adequately. If the contractual employees are met with effective management then they can potentially show a lot higher productivity than the other full-time workers. Different sorts of work with stringent conditions can also be effectively fulfilled by these kinds of workers.

Relatively lower costs are also one way how employers and entrepreneurs benefit from contractual staffing. These employers economise on the cost of paying full-time employees. Envision an independent company that needs a bookkeeper for 6 hours every week. Employing a full-time bookkeeper is costly and a misuse of assets when long haul connections can be overseen by low maintenance assets. However, a  contractual employee for the same role adhering to only the absolute needs of the job, gets the work done and the employer does not have to pay him in terms of full-time personnel guidelines.

Work laws or labour union laws might be carefully identified with documenting duties, benefits and different social advantages paid. These labour union laws are an important aspect that employers have to adhere to. However, in the case of contractual staff, these guidelines are also less stringent providing some amount of relief to the employers.

Contract Staffing Disadvantages

With the numerous advantageous roles of contract staffing, the few downsides that it carries with it also cannot be completely ignored.

Contractual staffing provides no job security to its employees. Even though the pay and the rate of growth are high, the employees are constantly on the run to look for another job before the existing contract expires. This affects the feeling of security of job in an employee and to a degree affects his morale. Since the pressure of looking for another job while the current one continues is gruelling, it causes stress in the employees.

Legal obligations like tax-paying is a part of every employee’s life. In a full-time or permanent job, the tax obligations borne by the employee are unitary. The employee has to maintain the records of only one account and generally for permanent employment the tax cut happens before the year-end. However, in case of contractual staffing, an employee has to maintain different accounts for different jobs and hence the tax calculations at the end of the year becomes a hefty job.

In contractual employment, an important way by which the employees can create a mark for themselves is by creating a brand for themselves. Since there is no job surety, they have to constantly work to prove their abilities. In case that does not happen, they lack motivation and that affects their productivity to a degree.


Contractual staffing is a new-age workplace phenomenon and it has a steady growth in the current working scenario. It has numerous benefits both in terms of the employee and the employer. However, there are certain drawbacks that are most effective in terms of the employees of contract staffing. In a long-term perspective, if these drawbacks could be studied upon and steps are taken to mitigate the same, contractual staffing can emerge as a hot-favourite and can likely change the current workplace dimensions.

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