Not long ago it was fairly common that as soon as you finished school, you began a job with a company that would look after your employment for the rest of your career. Those days are mostly gone. The economy we experience as a workforce would be nearly unrecognizable to a time-traveller from the year 1990 arriving today.

Along with the tremendous changes the world has experienced over the last few decades, it has become more commonplace for professionals to work for multiple companies throughout their careers. This effect can be can even be seen in industries and professions previously immune to the changing tides of lengthy workplace tenure.

This has resulted in a transition in the career mindset of millions of workers. Many employees now prefer to function on a temporary or contract basis versus full-time permanent employment and are building their careers in a much more fluid and flexible way.

In this article, we’re going to explore the advantages of being a temporary or contract employee. However, we’ll also delve into some of the pitfalls to be conscious of if you think this might be a career path you’d like to explore.


For almost every contract worker, the number one incentive is the ability to have much more control over when and how much you work. Many Millenials, having grown up watching their parents burn the midnight oil to get ahead, are not interested in the same sort of grind. A 2018 USA Today piece noted that 74 percent of Millenials were interested in freelance opportunities. Their survey also found that a quarter of those respondents plan to leave their full-time jobs within the next five years to pursue freelance work. And the primary reason given was to take control of their work schedules.

Learning New Skills Through Work

Given the expansion of the tech sector in Ottawa, this city is well versed in “start-up” culture and the trend of skilled professionals moving between companies as the opportunities present themselves. For nascent companies, they get the talent they need at a given moment, and for the employee, they learn valuable new skills that go with them to their next gig. As a contract employee, having an expanded toolkit developed by working for innovative organizations makes you a more significant asset to the business where you decide to work next.

With increasing frequency, companies no longer see having a running list of past employers as unfavourable. Instead, having worked in a variety of corporate cultures represents substantial experience. Forbes alluded to this trend back in 2012, when they found that—Ninety-one percent of people born between 1977-1997 expect to stay in a position for less than three years. Meaning they would have 15 – 20 jobs throughout their working lives. In 2018, a LinkedIn study, reported by the San Francisco Business Times, seemed to confirm this trend. They noted that while some tech mainstays keep employees longer, both Alphabet and Netflix are at about 3-years. Others, including Dropbox, Tesla, and Facebook, are all well below that average.

Focused Expectations

As a contract worker, very often you are brought on for a specific purpose. The company needs something in particular, and you have the skills to make it happen. When you become a full-time permanent employee, the company needs to have projects that sustain your employment continually, which tends to lead to job scope expansion. When your main job requires fewer hours, the company will take a portion of your time and put you on something else to fill your day. While freelancers can still get pulled into additional projects, the company is more likely to do it only where it makes good sense. As a freelancer, you also have the option to decline the additional assignments in a way a staff member may not. Having this level of cooperative arrangement means that as a contracted employee, you generally have more say in the way your career develops. Still, it also means you need to be actively thinking about where you want to end up as opposed to merely going with the corporate flow.

Greater Reward

The truth is, in most cases, freelancers can charge a higher rate for their services than a salaried employee. Part of this is as a result of expertise. A full-time employee is brought in for their current experience and ability to grow over time. With a freelancer, it is usually for an immediate need, and you are expected to hit the ground running for a finite amount of time. A survey conducted by Upwork found that 60 percent of freelancers who left traditional employment now earn more. Although, it’s important to note that a freelancer has to compensate for other variables. Vacation time, benefits, sick days, and CPP remittance need to be factored into their hourly rate unless the employer builds these into their contract.

Gateway Contracts

In some cases, a contract is a way for both employers and employees to get to know each other. They both avoid getting into a more profound commitment too quickly. The rapid nature of change in companies today can result in a lack of certainty about what the organization’s staffing requirements will be in six months to a year. By offering a contract with the potential for full-time employment, a company has time. They can better determine if a person is going to grow in the same direction as their business needs. Likewise, the contracted employee has the chance to decide if the company is a good fit for where they want to get to in their career. Of course, the situation is a little more precarious for both parties, as either can decide to end the relationship at any point. However, if the contracted employee makes a significant impact during the tenure of their contract, they will be in a strong salary-negotiating position when the time comes.

The Write-Offs

It costs money to operate a business, and corporations are permitted to write-off their business expenses so as not to pay another layer of tax on those purchases. As a freelance employee, you will likely incur costs that would be otherwise carried by your employer. If you work from a home office, use your mobile phone for business, or have to drive to meet with clients, you can deduct a relevant portion of these costs from your total income at tax time. Even if you chose to work as a sole proprietor, versus incorporating, you would still be able to write-off expenses occurred in running your business. However, it’s a good idea to consult a tax professional so that you don’t end up on the wrong side of the Canada Revenue Agency.

The Drawbacks

Like with anything, freelance or contract work has disadvantages that are important to consider before you decide to give up your salary and take the plunge. Choosing to go it alone means thinking through what you’re trading off in favour of what you’re getting.


With a salaried position, you have the guarantee of a regular paycheque and the ability to budget your expenses annually. A freelancer is dependent on getting that next gig to ensure another cash infusion. Of course, as you develop as a freelancer, you can be more confident in your relationships and have a good idea of what you can expect to earn. However, it will never be as guaranteed as a regular paycheque.

Paid Holidays 

Companies are mandated to pay their employees for holidays, which the government has established as statutory.

  • New Years Day
  • Christmas
  • Good Friday
  • Canada Day
  • Labour Day

As a freelancer, you get paid by the contract, so the company is not required to pay you extra if you happen to work on these days, nor are they required to pay you to have the day off.

General Wellness Days

Illness does not discriminate between freelance workers and salaried employees. However, when you work as a contractor, you do not automatically get paid sick days. While you may be able to negotiate some allowance in for longer-term contracts, it’s not a given. When determining your fees, you will want to consider that you are essentially giving up this benefit.

Being a Member

Professional Associations have become pretty commonplace in most fields. In many cases, they provide networks, best practice guidelines, and support for people in a given profession. When you work for a company, they will often pay the membership fees to keep you connected. As a freelancer, these costs fall to you and, again, must be built into your pricing.

Health Benefits

In Canada, our National Health Care program means we don’t have to rely on an employer to have proper health insurance. We can see a regular doctor or go to the hospital without fear of the bills being more than we can afford. However, many Canadians do rely on their employers to cover their dental and prescription insurance fees. Without proper coverage, these charges could become quite cost-prohibitive, especially if you have a family to look after. Individual insurance options have always been available, but as a single freelancer, you don’t have the same bulk-purchasing power as a company. If you’re considering a freelance career, you want to be sure to investigate these costs. Often you may be able to find better packages through a professional association than going it alone.

Professional Development Investment

Another big perk of being on-staff is that companies often find it advantageous to invest in the long-term development of their employees. As such, there is often a budget line for employee development to cover skills upgrades or conference passes. As a freelancer, your client companies are unlikely to pay for these sorts of perks. If you need to be at a conference or have to upgrade your qualifications, it falls to you to budget.

We continue to see an increase in the number of professionals looking to move towards contract or freelance positions. Despite the challenges, more people are being drawn to the flexibility, opportunity, and potential they see. For some, it’s merely a chance to try out a new company before joining the team full-time. Others, however, are using contract work to build the skills they need to launch a successful venture of their own. No matter why you are considering freelance or contract options, we’re here to help you think it through. With our extensive expertise in the local market, we may very well be able to connect you to your next contract.

Kush Baudi

Author Kush Baudi

Kush is a Senior Account Executive in LRO Staffing's IT Contract Division. He is currently making an impact by matching top IT talent with exciting tech opportunities while also helping Canadian Organizations identify and hire qualified IT professionals.

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