This is a hard one to answer. All three come with their own benefits and drawbacks, it’s a really personal decision as to which one you chose to follow and often depends on your headspace during a particular phase in your life.
Based on my experience, I see the pros and cons to each as follows:
Permanent
Pros
Job security / stability - inherently the whole thought-process behind hiring someone for a permanent role is that it’s going to be for the long-term and you will be on a longer reciprocal notice period (typically 3 months)
Additional salary benefits - most permanent roles include additional benefits that you wouldn’t get on a day rate contract, but you would on a fixed-term contract (FTC)
Benefits often include a cash car allowance (typically £5 - £8.5k pa), a target-related bonus (normally split between company and personal performance, the weighting varies company by company) an employer pension contribution, private healthcare, life insurance and paid holiday allowance
Job progression - this is normally given to permanent (and FTC) employees exclusively so if you perform well then progression normally follows
Ownership - in a permanent role you'll have a real opportunity to put your stamp on the project/s you're working on and to take ownership
Cons
Salary - might be a little less than a day rate contractor
Less flexibility - it’s a permanent role so you’re unlikely to change roles every 3-6 months
Recruitment process can be longer to include multiple interview stages
Fixed-Term Contract
Pros
Job security - in my experience FTC vacancies normally arise due to a permanent employee either going on maternity leave or on secondment, typically anywhere from 6-9 months. So the duration tends to be a bit more fixed and defined vs day rate contracting vacancies
Additional salary benefits - like a permanent employee you would also be entitled to pro-rata benefits, depending on the duration of the contract. Bonuses can be linked to completion of the contract, sometimes called a retention bonus, and are only payable upon completion of the contract
Notice period - normally less than a permanent employee so if it doesn’t work out then you have more flexibility to resign
Role and company variety - because the assignments are for a fixed period, once finished you have the opportunity to try something different
Cons
Base Salary - will be in line with a permanent role but less than if you took a day rate contract role, even with the additional benefits
Less flexibility vs day rate contracting - you will be tied into a longer notice period which, depending on how you see it, can either be a pro or a con
Recruitment process - can be longer than a day rate contract role, normally it’s the same as a permanent vacancy process
Day Rate Contracting
Pros
Salary - you will always earn more on a day rate vs. FTC or permanent. Even after the implementation of IR35
Flexibility - your notice period will be less: typically anywhere between 1-4 weeks depending on the company
Lifestyle - you get to choose when you want to be working and when you want time off
Variety - a huge benefit is that you get to work in a greater number of companies in a shorter period of time vs permanent employees who typically move around less - even if you stay with the same company, I see a large number of our contractors moving between different teams internally and therefore experiencing a lot of variety
Networking - it’s a great opportunity to build a network who you can keep in touch with and could be a really good source of opportunities in the future
Contract-to-permanent - if you perform well and decide that contracting isn’t for you then there’s always the chance you could secure a permanent position
Cons
Holiday pay - you won’t receive any, so time taken off is not paid for
Security - you will be on a shorter notice period than a permanent or FTC employee so there is inherently more risk: Day rate contractors are seen as an expensive resource so can sometimes be the first to go during periods of instability
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