What Is the Difference Between Contract and Permanent Employment? Contract employment is an arrangement in which workers are hired for a set length of time, whereas a permanent or direct hire employment arrangement is one in which workers are hired with no end date. There are advantages and disadvantages to both. For employers, contract employees can be less expensive because they often do not receive the same benefits as permanent employees, and assignments can be easily ended. For employees, contracts provide more flexibility and opportunities to try different things. Contract positions are usually ideal in situations where an employer needs someone with a certain set of skills for a limited period, such as to complete a project or fill in for permanent employees who are on leave. Permanent positions are usually better for employees who desire stability and job security and companies needing to fill a role long-term. Permanent employees are often given more responsibility and authority than contract employees. When deciding whether to accept a contract or permanent position, it is important to consider your own needs and preferences. If you value stability and benefits, a permanent position may be the better choice. However, if you prefer flexibility and variety, a contract position may be a better fit.