Contracting vs. FTE in the US: What to Think About

When weighing the options of a contract job versus a full-time position, consider these major differences:

Job security:
Contract jobs are short-term and can end at any time. Full-time jobs are safer, and most companies need some kind of notice before they can fire someone.
Health insurance, a 401(k) match, paid leave, and sometimes stock options are just a few of the perks that full-time workers get. A lot of the time, contractors don't get these perks. They have to get their own health insurance and plan their retirement on their own.

Compensation:
Although contractors generally earn a higher daily or hourly rate compared to full-time employees, receiving about 20 to 50% more, the gap shrinks after accounting for self-funded benefits and taxes.

Ability to be flexible:
Contract workers aka Contingent workers usually have more control over when and what kind of work they do. These jobs are often planned ahead of time by the company for full-time workers.

Career advancement:
Contractors don't often get the chance to move up in the company or get help from more experienced workers. Full-time workers, on the other hand, have clear ways to move up in the company, such as access to leadership and growth programs.

Taxes and paperwork:
Unlike full-time workers, self-employed contractors have to pay their own taxes and make estimated payments every three months.
As for Employers, they handle tax withholdings for Full-time Employees (FTEs).

Company culture and networking:
Contractors don't fit in as well with the company's culture, while full-time employees get to make more connections and networks with other employees.

As a 1099 worker, you can make $180,000 a year, but you won't get any bonus money. Your full-time job would pay $150,000 a year and cover all of your costs.

Most of the time, contractors have to pay between $6,000 and $12,000 a year for their own health insurance. They also have to handle unpaid time off and make their own retirement plans without help from their boss. While this is going on, full-time employees usually get 401(k) matches worth a lot of money every year, around $10,000 in paid vacation and sick leave, and, based on the company, stock grants or RSUs worth tens of thousands of dollars.

An FTE package can actually be worth more than a full-time job when you add together all the benefits and equity, even though the base wage looks lower.

Long-Term Effects on Your Career Pros of Contracting
A quick way to get extra money for short-term aims. Ability to quickly look into other industries or skill sets. More freedom and flexibility. Cons of Contracting:
Less job security.
No long-term rewards like stock options.
Taxes and benefits make things more complicated for businesses.

Pros of FTE:
A steady salary and a career that is safe.
Getting help with career growth and mentoring.
Building money over time through equity and retirement plans.

FTE Cons:

Less flexibility in the timetable.
Slower salary growth if not proactively managed.

How Contracting Can Help You Get a Full-Time Job

A lot of big organizations, especially in IT, use contracting as a means to "Probationary Employees" workers before hiring them full-time.
Companies turn contractors into full-time employees for these reasons: They think it's worth it to avoid paying for extra hiring and onboarding. Proven contractors already know how to use the company's tools and follow its rules.
High-performing contractors can help teams deal with less work right away.

How to make it more likely that you will convert:
Do more than what is expected of you in your main job. Join meetings, Slack channels, and informal catch-ups to build contacts inside the company. Make it clear that you want to stay on as an FTE.
Show that you can work well with others and fit in with the culture. Write down and tell people about your measurable influence.

A contractor at Salesforce became a full-time project manager after showing leadership during a significant launch and making connections with other employees. She said on LinkedIn that her proactive approach, which included asking for mentorship chats and sending weekly updates to senior leadership, made a big effect.

Important Point
Pick contracting if you want more money right away, more freedom, and the chance to swiftly try out numerous work settings.
If you value security, creating wealth over time, career advancement, and structured growth, choose FTE.
Contracting can definitely help you get to FTE, but you need to be smart, visible, and loud about what you want.
Ask for input and then do something with it. Ask your management and coworkers from other departments for input on a regular basis. Show that you can quickly put suggestions into action. This shows that you have a growth attitude, which hiring managers adore.

Use feedback sessions to quietly show that you want a permanent job.
Sign up to work on projects that include people from other teams or are very visible. Raise your hand for things that go beyond what your contract says you can do. High-profile projects often get the attention of executives. Getting involved indicates that you care about long-term success.
These initiatives provide leadership a better idea of your skills, which makes it more likely that they will hire you.
Create champions in the workplace
Find and build relationships with "internal advocates," or coworkers or leaders who can say good things about you.
When selecting how many people to hire or how much money to spend on conversions, strong internal support is typically a vital consideration.

Show that you own your thoughts

Even if you're on a contract, operate like FTE: focus on results, not simply outputs. As if you have a long-term stake in the game, suggest ways to make processes better, point out risks, and provide solutions. Managers notice when someone thinks beyond “just doing tasks.”
Show how your actions have an effect (but don't brag about it)
If it's appropriate for your culture, you can give progress reports at team meetings or in weekly summary emails.

When sharing about accomplishments, focus on how they affected the business. For example, say, "This change cut onboarding time by 15%," not just "I finished my ticket."

Schedule a Block to Make your Request.

Bring up a request to change contracts only after achieving a significant milestone or during performance review periods. These are the times when teams review their budgets, headcount, and long-term staffing needs.
Try to find out when the organization budgets for new hires. Pay attention to when teams submit requests for full-time hires (usually every quarter or annually). If you are aware of these timelines, then you will be able to align your request for conversion and increase the chances for approval.

Take Part in Improving the team Culture.

You are free to participate in social events, slack channels and intranet interest groups. Caring about the team beyond the work contract demonstrates the right attitude and helps prove you are a cultural fit.

Learn new skills

Find the skills that the team is missing right now and start building them up. You can show that you not only fit a current role, but also provide value to it.

Putting it all together

In summary, to go from contractor to full-time, you need to do great work, make it easy for the employer to say "yes," and become so important to them that they can't imagine life without you.