Day Rate Contract vs. FTC – An Employers Guide
There is a common misconception among many employers that when you need a short-term hire, going down the FTC route is the best and most commercial option available for them and the candidate, which we have found often is not the case.
From an employer’s perspective there are many advantages to hiring Day rate contractors as opposed to FTC staff
- Many employers may think that the idea of an FTC is more attractive to candidates due to notice periods offered, which is often not true. In fact, we have found that FTC’s can reduce available candidate pool by circa 60-70%
- Another misconception made by employers is the idea that Day Rate Contractors have no notice periods when moving from one role to the other. Although Day Rate Contractors have shorter notice periods, they would still have a notice period of 2-4 weeks’ that they must provide to an employer. This means that contractors have to give fair notice if they leave a role but they can also be quicker to join a project than an FTC candidate
- The fees charged to the client are based on the days worked by the day rate contractor, as opposed to paying a full fee up-front with an FTC or permanent hire when using a recruitment agency
- If the length of the project changes for any reason (such as budget, business circumstances) there is more flexibility around shortening or lengthening the assignment
- In relation to the administration of a day rate contractor there is virtually none, a PO number if needed. The recruitment agency or third party usually looks after all the compliance and on boarding
- The approach to taking on a Day Rate Contractor often means less on-boarding and integration to the business – which often results in a more streamlined recruitment process
The benefits of offering Day Rate Contract roles for the candidate
- The hourly / day rates offered are in most cases are more lucrative for them from an overall earnings / tax perspective – which makes things more interesting from the get-go
- If candidate retention is a huge concern – I would advise introducing an end of project bonus to increase the incentive to stay
- A day rate contractor usually has been exposed to many various projects giving them an extra edge in the market. This style of work usually means that the contractor is a flexible person who can acclimatize quickly in new environments and is well used to having to get up to speed in situations fast
- Day rate contractors are highly motivated by the flexibility it offers
In most scenarios there are pro’s and con’s and each employer must weigh up both and decide on the right approach for the requirements. I would be more than happy to assist you in deciding which solution suits you so please feel free to reach out to me!