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Home » Uncategorized » Interim v Fixed Term Contracts (PAYE)

Interim v Fixed Term Contracts (PAYE)

I have written about Interim v Management Consultants before. But today the rare but no less significant issue of fixed term contracts (FTCs) came up. So I’d thought I’d quickly explore the pro’s and con’s and see what you think.

What is a fixed term contract?

A fixed term contract is a full time, PAYE job, which comes with the benefits and protections of same, but for a fixed term. It can be used as an alternative to a contractor or interim. And is seen by some hiring clients as cheaper and therefore more attractive.

Why does it look good to an employer?

Certainly the pro rata’d salary of the full time equivalent is less than the cumulative day rates of an interim. A quick glance at a spreadsheet will tell you that and so it’s a no-brainer right?

Well, hold on there – here are some things to consider.

Why looks can be deceiving

No permanent candidate is going to resign from their current job to take on (sub-1 year) fixed term contracts. Certainly we would not advise them to.

No day rate contractor wants to take on a substantially lower paid fixed term contract. That really is a no-brainer.

This can make the candidate pool very small and devoid of serious choice.

Risky types of candidate

Sure, the ‘out of work permanent’ candidate pool may contain some that are prepared to do a fixed term contract. Until the right job comes along. However, when that permanent job does come along, they are likely to take it.  And if that is before the fixed term contract is concluded, then that’s a risk the fixed term contract client will have to bear. If the contract was to complete a project of some type, as they often are, then disrupting the project may be very costly. Especially if the contractor was a senior hire.

Even riskier types of candidate

The ‘still out of work contractor’ may also take it. But you have to ask yourself, why the contractor can’t get work. And again, what’s the risk that a contractor who took it just because it was offered, won’t leave mid-contract. When they get the pay rate they were really after.

In neither scenario was there much choice of candidate and nor was the quality likely to be the highest (perm candidates who are in-between jobs or contractors who are edging towards financial desperation?!). These less visible costs, along with unpriced risks at the time of hiring almost always exceed the differential between the cumulative day rates and the pro rata’d salary of fixed term contracts.

They are just harder to articulate on a spreadsheet.

Total costs – not just the ones you can see easily

It’s why the total cost of hire is a more accurate way to inform hiring decisions – I wonder how many times that total cost is understood, never mind considered?

I’d be interested to hear the (well articulated please) case for fixed term contracts.

Otherwise it’s back to the day job for me.

Hiring Managers and Candidates connect to me on LinkedIn here. 



Walker |

Founder and CEO RecruiterB

In May 2014 I wanted to expand my recruitment business but was horrified at the thought of employing a room full of young men with directional hair, who threw CVs around like mud, to see what stuck to the wall (:-0 surprise emoticon). I detest sales and those kind of sales people. It’s now 2016 and not without a considerable amount of time, money and study I have observed that sales is dead and that in the 21st century the customer now has access to all the sales persons knowledge, via the internet and is no longer being sold to, but is in fact doing the buying, without any help from the sales person at all, thank you very much. I studied some more and with this knowledge and the 17 years financial services recruitment experience, I have created what I believe to be the most powerful, high performing recruitment system in the UK financial services market. I am now giving it away free to employers, because I believe everyone should be able to lose the young men with directional hair, attract and recruit only the best candidates and do it for less money.

Discover the 7-Step
Performance Hiring System
For Less Cost Than The Bottom 85% Of Candidates. Every Time.
Find Out How To Hire The Top 15% Of Candidates -
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