Advantages of Permanent Employment

The lack of freedom that comes with permanent employment is offset by numerous benefits.

Deciding between the stability and structure of permanent employment vs. the freedom of freelancing or temporary work can be difficult since there are advantages to both. While it may be tempting to opt for the variety and independence that comes with temporary work, consider the benefits of permanent employment before you decide against it.

Additional Benefits

Permanent employment usually comes with benefits in addition to a salary. Extras such as vacation pay, health insurance, retirement benefits, paid sick days, and unemployment insurance can comprise as much as 40% of an employee's compensation package. If you are a temporary worker or a freelancer, you don't generate income while you are sick or on vacation, and you have to pay for your own health insurance and retirement savings.

Retirement Savings

Permanent employment can give you the opportunity to have a 401(k ) account partially funded by your employer. This is an employer-administered, tax-deferred retirement account. A portion of each paycheck is transferred to the 401(k) and invested in products such as mutual funds, stocks and bonds. The income generated from these investments is not taxable until you withdraw funds, which is allowed without penalty starting at age 59 1/2, prior to which time an early distribution penalty of 10% additional tax is applied.

Paid Training

Permanent staff can often get training paid for by the company. If you are a freelancer and need upgrading in an area, you are responsible for paying for it. In addition to the cost of the training, you also suffer lost revenue during the time you are training. As a permanent employee, you are paid your regular wages during your training.

Stability

Temporary staff are more likely to be laid off. If you are a permanent employee who is entitled to severance in the event of layoff, an employer may instead choose to reduce your hours rather than eliminate your position in times of economic hardship.

Increased Mental Health

According to the January 7, 2010, "Business Week" article "The Disposable Worker," research presented in 2009 by McGill University demonstrated that temporary and contract workers faced greater risk of mental health issues such as depression. Reduction in social ties, health care and job security all contribute to the stress felt by temporary staff.

References

• USA Today: Temp work can be path to permanent position; Anita Bruzzese; February 16, 2011
• Tech Republic: Should You Take That Permanent Job Offer; John Andre; August 2, 2000
• Radio Electronics: Contract or permanent electronics, software and project management jobs
• Business Week: The Disposable Worker; Peter Coy and Moira Herbst; January 7, 2010
• Research 401k: What is a 401k Plan?
• IRS: Topic 424 - 401(k) Plans; March 1, 2011