Contract employment may be the wave of the future on clarkhoward.com

When employers begin hiring after the recession, it will likely be with more contract work than full-time employment. This looks set to be the start of a long-term trend; you may be signed to a 90-day or 1-year contract.

Basically, employers want the ability to grow or shrink their work force at will according to how business is doing.

Another benefit for employers is that they can sidestep the messiness of layoffs with contract workers. The issue simply becomes will they offer you a new contract or won't they? Much nicer than having to "let more heads roll," which is never a pleasant experience.

Contract employment has long been very popular in Europe and Japan.

Let's face it, the social contract of lifetime employment -- where we worked for one employer who provided a pension -- has long ago faded away. Contract employment is just one more recognition that employers rent us and we rent them for a period of time.

And it's definitely something of a double-edged sword. On one hand, it becomes more difficult to make longterm plans. How can you buy a house and stay in it for a minimum of 5 years (as Clark recommends) when you don't know if you'll be employed? Yet on the other hand it creates more hiring opportunities in a capitalist system.

Yet here's the ultimate downside: One thing you can't measure is how loyal an employee will be and how customer-focused they'll be when they know their employer hasn't made a commitment to them.
Note: This segment originally aired in September, 2009

What others are saying

Contract Wave, USA Sunk
Well, as usual, and unfortunately, ignorant Americans consistently make the same mistakes over and over again. Voting the enemy into political office, cheering the enemy, teaching the enemy and emboldening the enemy. Then we wonder why things aren't going our way? HELLO!?! You've got to be kidding. We did this to ourselves. We created this mess ourselves. I hear, everywhere, 90-100% dissatisfaction and complaining with our government, leaders, CEOs, their personal situation, etc. But I never hear anyone taking any action. It's all cheap talk. Cheap armchair quarterback talk. Who exactly do you think is going to pick up the rifle? It's YOU dumbass American. There is no "them". It's US. It's ME. It's YOU. The good news is we can fix our nation. Trouble is it doesn't look promising. Political Correctness. God forbid we state the facts and state reality as it is. Oh no! We can't do that. If we face reality then we might actually communicate and understand what the hell the other guy is saying. Oh no! Yikes! Success! ohhhh that's too scary doing things the CORRECT way. Problem is the typical fat a**** American refuses to get active -even disobedient to solve the problem. You prefer "let" circumstances "happen" to you rather than "make" your own circumstances. We are doomed unless fat lazy ignorant American don't get off the pharma drugs, booze, tv, sports and celebrity gossip. PLEASE get a CLUE. We have nowhere else to live. Ever try living and working overseas. Good Luck! Ever notice how employment is getting worse? Housing is getting worse? Medical is getting worse? Taxes getting worse very soon? Standard of living falling through the bottom? You're all ignorant American losing your nation before your eyes while you sit on your fat couch doing NOTHING. Good luck living in China, Iran and Mexico. We're all SOL you ignorant morons. Enjoy! your new crappy lives. Barely surviving instead of pursuing life, liberty and pursuit of happiness. It's all gone now. You earned it. You deserve it.
By Karl @ 12/21/09 11:16:08 PMreport abuse
cause and effect
When it's too difficult to fire an employee, or employers have to deal with labor unions. This is the result. Don't cry.
By mrlee @ 12/21/09 07:15:32 PMreport abuse
Not that different
Who in this day and age knows they'll be employed in five years, whether employee or not? That's not really relevant. Most in "permanent" jobs don't know if that job will exist in a year or two, much less five. Layoffs, closures and outsourcing are the norm now.

At least contract employees are prepared to jump from company to company more easily. If benefits were portable and not so often tied to one company, it would be even easier.
By Kate @ 12/21/09 04:24:11 PMreport abuse
Contract Employment
I've worked as an independent contractor through my own company for about 8 years now and I love it. Though I have to pay for my own insurance, get no holiday or vacation pay I would not go back to being an employee.

The pay, tax benefits and freedom of time are much better than being an employee. I think our society needs to get away from expecting certain things being provided by an employer and government. I also think a main driver behind moving to contractors in the future will be because of government mandates to businesses to provide certain benefits for their employees.
By wireless guy @ 12/21/09 01:12:14 PMreport abuse
Seen This Before
I have seen this in prior recessions just ending. Nothing new it will be a year or two before it gets back to more employers hiring direct, then there will be a shortage.
By Bruce @ 12/21/09 01:00:44 PMreport abuse
public option
Having a public option will enable thousands of workers who are now clinging to full time jobs they don't really enjoy or are underutilized/underemployed in to leave and seek work that is a better fit, even if it is (only) contract based work. I see this making the workforce overall more productive and happier, since they won't have to just take any job in order to get health insurance. A lot of people would experience the freedom to go after work they love, and that is something hard to measure in dollars. I think having a public health option is good for the American Dream, whatever your personal American Dream may be.
By lynn @ 12/21/09 12:49:28 PMreport abuse
@Mary - Reagarding CEO's
Outsourcing CEO's? Ha! I'd be pretty happy if we get rid of their million dollar golden parachutes. Do a bad job? Here's $2,000,000! If I do badly in my job, I get sued! And I only hurt one person! How many people does the CEO hurt when moves a factory overseas, or puts out more contract work? Hardly seems fair, does it?
By Medical Student @ 12/21/09 12:33:43 PMreport abuse
Not to change the subject
If there was a public option in the health care bill, employers wouldn't need to worry about insurance for any of their employees.

For full disclosure, I'm still undecided as to whether or not a public option is a good thing.
By Medical Student @ 12/21/09 12:31:20 PMreport abuse
Contract employment
Main reason will be---health insurance.
Companies do not have to worry about insurance for a contract employee.
By Tim @ 12/21/09 12:56:32 AMreport abuse
Contract to hire
My boyfriend has been in several contract-to-hire positions, but client never hires. He is in IT and gets no benefits, no overtime, no holiday pay, no vacation days, no sick days and he's making less than half of what he made five years ago. I think USA corporations need to outsource CEOs too. Let them get a taste of living on the edge for a change. See how it feels to have no benefits and wonder if you'll have a paycheck tomorrow.
By Mary @ 12/20/09 09:27:06 PMreport abuse

Contract Wave, USA Sunk

Well, as usual, and unfortunately, ignorant Americans consistently make the same mistakes over and over again. Voting the enemy into political office, cheering the enemy, teaching the enemy and emboldening the enemy. Then we wonder why things aren't going our way? HELLO!?! You've got to be kidding. We did this to ourselves. We created this mess ourselves. I hear, everywhere, 90-100% dissatisfaction and complaining with our government, leaders, CEOs, their personal situation, etc. But I never hear anyone taking any action. It's all cheap talk. Cheap armchair quarterback talk. Who exactly do you think is going to pick up the rifle? It's YOU dumbass American. There is no "them". It's US. It's ME. It's YOU. The good news is we can fix our nation. Trouble is it doesn't look promising. Political Correctness. God forbid we state the facts and state reality as it is. Oh no! We can't do that. If we face reality then we might actually communicate and understand what the hell the other guy is saying. Oh no! Yikes! Success! ohhhh that's too scary doing things the CORRECT way. Problem is the typical fat a**** American refuses to get active -even disobedient to solve the problem. You prefer "let" circumstances "happen" to you rather than "make" your own circumstances. We are doomed unless fat lazy ignorant American don't get off the pharma drugs, booze, tv, sports and celebrity gossip. PLEASE get a CLUE. We have nowhere else to live. Ever try living and working overseas. Good Luck! Ever notice how employment is getting worse? Housing is getting worse? Medical is getting worse? Taxes getting worse very soon? Standard of living falling through the bottom? You're all ignorant American losing your nation before your eyes while you sit on your fat couch doing NOTHING. Good luck living in China, Iran and Mexico. We're all SOL you ignorant morons. Enjoy! your new crappy lives. Barely surviving instead of pursuing life, liberty and pursuit of happiness. It's all gone now. You earned it. You deserve it.

By Karl @ 12/21/09 11:16:08 PMreport abuse

cause and effect

When it's too difficult to fire an employee, or employers have to deal with labor unions. This is the result. Don't cry.

By mrlee @ 12/21/09 07:15:32 PMreport abuse

Not that different

Who in this day and age knows they'll be employed in five years, whether employee or not? That's not really relevant. Most in "permanent" jobs don't know if that job will exist in a year or two, much less five. Layoffs, closures and outsourcing are the norm now.

At least contract employees are prepared to jump from company to company more easily. If benefits were portable and not so often tied to one company, it would be even easier.

By Kate @ 12/21/09 04:24:11 PMreport abuse

Contract Employment

I've worked as an independent contractor through my own company for about 8 years now and I love it. Though I have to pay for my own insurance, get no holiday or vacation pay I would not go back to being an employee.

The pay, tax benefits and freedom of time are much better than being an employee. I think our society needs to get away from expecting certain things being provided by an employer and government. I also think a main driver behind moving to contractors in the future will be because of government mandates to businesses to provide certain benefits for their employees.

By wireless guy @ 12/21/09 01:12:14 PMreport abuse

Seen This Before

I have seen this in prior recessions just ending. Nothing new it will be a year or two before it gets back to more employers hiring direct, then there will be a shortage.

By Bruce @ 12/21/09 01:00:44 PMreport abuse

public option

Having a public option will enable thousands of workers who are now clinging to full time jobs they don't really enjoy or are underutilized/underemployed in to leave and seek work that is a better fit, even if it is (only) contract based work. I see this making the workforce overall more productive and happier, since they won't have to just take any job in order to get health insurance. A lot of people would experience the freedom to go after work they love, and that is something hard to measure in dollars. I think having a public health option is good for the American Dream, whatever your personal American Dream may be.

By lynn @ 12/21/09 12:49:28 PMreport abuse

@Mary - Reagarding CEO's

Outsourcing CEO's? Ha! I'd be pretty happy if we get rid of their million dollar golden parachutes. Do a bad job? Here's $2,000,000! If I do badly in my job, I get sued! And I only hurt one person! How many people does the CEO hurt when moves a factory overseas, or puts out more contract work? Hardly seems fair, does it?

By Medical Student @ 12/21/09 12:33:43 PMreport abuse

Not to change the subject

If there was a public option in the health care bill, employers wouldn't need to worry about insurance for any of their employees.

For full disclosure, I'm still undecided as to whether or not a public option is a good thing.

By Medical Student @ 12/21/09 12:31:20 PMreport abuse

Contract employment

Main reason will be---health insurance.
Companies do not have to worry about insurance for a contract employee.

By Tim @ 12/21/09 12:56:32 AMreport abuse

Contract to hire

My boyfriend has been in several contract-to-hire positions, but client never hires. He is in IT and gets no benefits, no overtime, no holiday pay, no vacation days, no sick days and he's making less than half of what he made five years ago. I think USA corporations need to outsource CEOs too. Let them get a taste of living on the edge for a change. See how it feels to have no benefits and wonder if you'll have a paycheck tomorrow.

By Mary @ 12/20/09 09:27:06 PMreport abuse

Listen Live:

Clark On Demand:

Clark's Advice:

Consumer Action Center:

Quick Links:

Clark Media:

Call The Show:

Dec 18, 2009 -- Contract employment may be the wave of the future

What others are saying