During the pandemic recovery fixed term contracts (FTC’s) were effectively rendered obsolete, a relic from a time when businesses weren’t fighting over staff and permanent salaries were increasing at a rate of 10% and not suited the modern world. That was then and much has changed, with significant amounts of layoffs from businesses large and small we’ve seen what economists call “slack” emerge in the tech and change market, a situation where the supply of workers is greater than the amount of paid work available and this has allowed cautious hirers the opportunity to return to the hiring market in a way that offers substantial advantages. Key among these are flexibilty in workforce management as an organisation can hire for a specific project without long term commitment and without taking on the associated liabilities of a permanent employee which in turn provides budgetary certainty for that project as the work has a fixed end date removing the need for any additional work to exit an employee. Of course, in many instances the FTC can serve as an extended trial period for a would-be permanent employee and in that sense also brings with it a certain motivating element to make sure that the work being delivered is of the highest standards.
All well and good for the employer but there are drawbacks, chiefly that anyone in a permanent role is highly unlikely to leave to take up an FTC unless there were specific push factors from their current role which means that the potential candidate pool is limited to those out of work. This means that it’s vital that hirers listen to what the market is telling them, active job seekers don’t hide away they are are out there putting themselves forward so if your FTC isn’t getting any traction within a week of being marketed then you either need better advertising or agents or it’s a dead duck. Also the commitment side works both ways, a candidate with a few months left on their contract is unlikely to turn down a perfect permanent role no matter how good their intentions which could leave a company in a situation where a key project asset walks out of the door just at a time when things are reaching a conclusion.
That doesn’t mean FTC’s aren’t attractive to candidates, a reduced applicant pool means less competition and limited liability for the hirer means they may be prepared to take more risks when hiring which opens up opportunites for people who may not interview particularly well but perform brilliantly in post. I was flippant with the subheading about FTC’s being limited to 12 months but they undoubtably have a shelf life, as more businesses take up the slack there will be progressively fewer immediately available candidates until the point where the number are so small that competing with normal permanent roles becomes untenable.
The caveat to all of this is that the incoming Labour goverment has promised to bring forward legislation to reform employment right and the proposed day 1 workers rights which effectively remove probation periods may well drive employers to blanket FTC’s for all new hires. If that market moves as one on this then we may find they become the norm rather than the exception in the future
