Permanent Vs. Contract employment

Came across this interesting post which was trying to compare the difference between permanent and contract positions. Where.Deers.&.Antelopes.Play It is a post that has started a very diverse discussion from different view points. What triggered me to write this post was because I was also once a contractor and I faced a few issues by virtue of being a contractor, especially in the case where I needed to raise some capitol from banks.

In Sri Lanka, no bank will ever lend you any money if you are a contractor. They seem to have taken the notion that permanent jobs are forever and contract jobs are temporary. I guess what they have not realized is the fact that no job is permanent, whether it is contract or permanent.

When I took up that particular post, I had no hesitations on taking up a contractual position as I had confidence on my self. I was confident of being able to get a renewal at the end of the term. I always believed in giving back my worth to the company that work. If I feel I am not doing my worth, I get worried before anyone else does.

So for me it was not much of a differentiator. What I was more interested in was the challenge and the environment. I was more concerned about delivering what was expected out of me, because one thing that I cannot bear, is being a failure in my own eyes.

But in general I think the environment also has to adopt to be more flexible towards contractors, specially in Sri Lanka. If the banking system shuts down contractors from basic needs such as getting a housing loan, car loan etc, then that is going to force some people to seek permanent jobs. This will create an undue demand for permanent jobs as well as makes it harder for companies to fill short term man power usages through contracting.

A lot of contract staff in Sri Lanka tend to work for foreign companies. This practice is adopted by these foreign companies to stay more flexible because of old labour laws that are in place, which makes it almost impossible for a company to fire an employee, unless that person commits some serious crime. So in order to not to get locked into carrying un-necessary luggage they prefer to get people on contract.

If the government wants to promote foreign investment, they will have to work on bringing in legitimacy to the contract workers, by amending laws that would ensure that they are treated in the same level as the permanent employees. If this is done, I think eventually Sri Lanka will also have a talented pool of contractors who will be able to quickly move in to a job and fulfil the requirements. This will also enable the companies to be more agile as they will have flexible access to talent; proven and exposed talent. People who are exposed to new technologies and more diverse situations, thus providing solutions that are proven and tested, avoiding the invention of the wheel over and over again.

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  1. Sam

    Totally agree with you. Economy of any country as good as it is banking system.
    There is no such a thing call permanent employment – when there is nothing permanent in the life.
    Banks point of view – they always want to catch the low risk market. We can not complain about it. But since we are not in 80s any more ~ we need better document handling system – may be something like SSN in USA.
    I don’t think this situation will change in our life time.

  2. Interesting.. I think all the people will agree with you.. SL mindset should change big time over contract employment. Otherwise we will be nowhere in the market…

  3. Leonardo

    It would be wrong to force banks to lend against their will because they are lending their depositor’s money and they should be allowed to use their own best judgement to protect themselves and their customers against the risk of loan defaults.

    If they are reluctant to lend to contractors, it’s probably because they think the risks are higher. That seems reasonable.
    If it is not the case, if there really is no higher risk, then it will not be impossible to convince at least one commerical bank, out of the many who operate in Sri Lanka to lend to contractors. It in any banks interest to leave aside all unnecessary factors when making decisions. A single individual cannot do it, but maybe it can be done by forming an association or something.

    The alternative of promoting new legislation to force banks to lend against their better judgement is misguided at best.

    If it amounts to “discrimination”, then so be it. There are always finance companies, though at a higher interest rate.

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  6. dr mitesh h patel

    contractual staff is far far better than permanent staff. they work hard, honestly, & sincerely with time bound practice.

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  9. slesha

    i want a complete difference between contractual employee and permanent employee effectivenes
    can anybody do help me in this
    as such am a mangement student and doing a small survey on this topic
    will be highly greatful to everyone whi shares their thoughts

    if any one having any article ,ideas or thoughts on this topic
    please feel free to convey
    mail id- sleshuoct @


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