Short Term Contract: Definition, Benefits, and Drawbacks
A short term contract, also known as a temporary contract, is an employment agreement between an employer and an employee for a specific period of time. This type of contract is commonly used by companies looking to fulfill short-term staffing needs, such as covering for a staff member on leave or a surge in workload.
Benefits of Short Term Contracts
Flexibility: Short term contracts offer flexibility for both employers and employees. Employers can bring in temporary workers to fill gaps in their workforce or to provide additional support during busy periods. Employees, on the other hand, have the opportunity to gain experience in different organizations and industries, and may be able to negotiate their rates or work schedules.
Cost-effective: Short term contracts are a cost-effective solution, as employers do not have to commit to a long-term employment relationship or provide the same benefits as permanent employees.
Less legal risk: Employers face less legal risk when hiring temporary workers, as they are not usually entitled to the same protections and benefits as permanent employees, such as severance pay and medical coverage.
Drawbacks of Short Term Contracts
Lack of job security: The biggest drawback of short term contracts is the lack of job security. Temporary workers are not guaranteed employment beyond the contract period, and may face difficulties finding their next job.
Limited benefits: Temporary workers often receive limited or no benefits, such as retirement plans, medical coverage, and paid time off. This can make it challenging for them to plan for their financial future.
Less training and development: Temporary workers are often not included in training and development programs that permanent employees receive, which may limit their opportunities for career growth.
In conclusion, short term contracts offer employers and employees flexibility and cost-effectiveness, but come with drawbacks such as limited job security, benefits, and training opportunities. When considering a short term contract, both employers and employees should carefully weigh the benefits and drawbacks and make an informed decision.