What is permanent recruitment?

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In the permanent recruitment model a company hires a worker on a contract that has no predetermined end date.

Permanent recruitment is the most traditional form of employment contract whereby a company directly employs an individual and there is no predetermined end date to the role. The employer often provides workplace benefits such as healthcare and paid holidays to these employees and is usually subject to rules that prevent abrupt job termination without advance notice. 

History of permanent recruitment

Traditionally most workers were employed on permanent contracts and during the 20th century they were provided with protection which included formal procedures for layoffs and disciplinary action. In addition, benefits were added to this, often including workplace pensions and paid annual leave. 

Towards the end of the 20th century, however, the rapid pace of workplace and technological change led to an increase in the use of contract workers on a short-term basis to meet specific needs and to fill skill gaps. Although they don’t enjoy the same workplace benefits as permanent employees, many workers still prefer to work in this way because it offers them more flexibility than a permanent role.  

Permanent recruitment trends 

Permanent employees are still the backbone of the workforce, but contracting has taken on an ever more important role. Technological developments have continued to accelerate and a significant skills gap has emerged in many sectors, making it difficult for some companies to fill permanent roles. They have, therefore, been forced to rely on more contract staff. 

The skills gaps have also made contracting more attractive to some professionals, who value both the flexibility and the opportunity to work for a variety of companies on a range of different projects. More recently, however, the tax position of contractors has come under closer scrutiny from governments in many countries.  

Regulations like IR35 in the UK mean that companies are increasingly concerned about the prospect of contractors being deemed to be full-time employees by regulators. At the same time, new rules have made contracting more complex and have led many contractors to seek out permanent roles. Others have moved to an employed contractor model, which bridges the gap between permanent and contract employment. 

Advantages of permanent recruitment 

  • Employers keep the skills and knowledge of employees in the business for a long period. 
  • Permanent employees build stable, loyal and efficient teams. 
  • Employers hire recruit employees that are more likely to be invested in the growth of your company and your business values. 
  • Permanent staff can easily cover for colleagues and fill gaps at short notice.  

Disadvantages of permanent recruitment 

  • As well as salaries, employers will pay for insurance, training and benefits such as:
    • Health insurance
    • Pensions
    • Paid leave 
  • Permanent contracts are harder to terminate. 
  • Highly qualified people now tend to look for fixed-term roles that can leave employers with more general skills in-house. 

Use case

Both permanent recruitment and hiring contractors have their own advantages and disadvantages but permanent staff tend to be the backbone of any organisation. Leading companies seek to attract the permanent talent they need by highlighting their impressive brands and capabilities and the cutting-edge work carried out by their employees. This is a key strategy for many in attracting the best people.  

Rolls-Royce, for example, offers graduates programmes and apprenticeships as well as seeking to attract experienced professionals, from engineers and designers, into permanent positions. It offers not only rewarding work and competitive salaries, including a bonus scheme in some cases, but also flexible working options, benefits, including a workplace pension, and a generous annual leave entitlement. 

While companies continue to seek out highly skilled contractors, tax concerns have begun to turn the tide. New innovations, such as the Employed Contractor Model, which is a term used by SThree to describe a new form of contract whereby the contractor is employed by the recruitment agency for the duration of a project, are leading to a further evolution of workplace contracts. It is an indication that while permanent recruitment and contracting have their pros and cons, there is a third way. 

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