Mark Nesbit

Jun 04, 2019

Interim v fixed-term contract: the pros & cons of each


You could be faced with a star employee that’s just handed in their resignation, leaving you a month to find a replacement. Or a highly-valued member of staff that’s just happily announced that she’s pregnant. Or maybe your business needs a major shake-up, or needs to deliver a one-off project. If interim (or contractor) rates leave you reeling, a fixed-term contract may seem like the most commercially beneficial and risk-free option. But that’s not always the case. There’s pros and cons for interim v fixed-term contracts, which we cover. But first...

The difference between interim v fixed-term contracts

First things first: a fixed-term contract is not the same as hiring a contractor. The terms “interim” and “contractor” are often used interchangeably to mean the same thing - a senior-level self-employed worker who demands a daily rate commensurate with their experience. Fixed-term contracts, on the other hand, are used when describing an offer of a fixed-term employment contract i.e. they are PAYE employees.

The benefits of offering fixed-term v interim (or contractors)

They cost less (or at least they do at first-glance)

The salary rate is often on par (or only slightly) higher than those offered to permanent employees.

However: be aware of the hidden costs of employees. Check out our blog: Brexit: is it time to rethink ‘sky-high’ contractor rates?

You’ve got more time to assess a candidate’s abilities (IF you want to)

Many candidates wouldn’t accept a job with a lengthy probation period, as it offers little job security. Equally, some employers may feel obliged to keep on new hires, unless there is sufficient reason to not pass them on their probation period. A fixed-term contract can be used as a means of testing out a candidate’s skills over a longer period. If a suitable position is then available, you can make the role permanent with more confidence.

(However, if you only want someone to cover for a specified absence, it could create issues. Or even worse, if you prefer the fixed-term employee to the person off on maternity/sickness, etc, they can’t become a permanent replacement. You’ll have to find extra funds for a new role!)

They can be used to fill low-level to mid-professional-level or management roles

Typically, fixed-term contracts are most effective when used to fill low-level roles up to mid-professional-level management roles. Contractors, meanwhile, are typically hired for senior management and above, or for highly technical skill sets.

The benefits of interim and contractors vs fixed-term employment:


Interim professionals are generally motivated by the flexibility and autonomy of temporary work so they are undeterred by unspecified timescales of employment. If you need the interim professional for longer or less time than first anticipated, there is no commitment to a specific time frame for the employment. Meanwhile, with fixed-term employees you need to pay for the full duration of the specified contract rate, regardless of whether they are working.

It attracts higher calibre candidates

The skill sets for a true interim professional and someone who will consider a fixed-term contract are different.

The higher day rate means that contractors have to prove their worth, so they typically have skills not available in the permanent marketplace. By choosing to become a contractor, they are effectively backing their own expertise.

Meanwhile, a fixed-term contract hire may take on a fixed-term contract if there are no other suitable permanent options, with a view to making it permanent (and may continue looking for a permanent employment opportunity if that is not an option).

They deliver measurable ROI

Contractors like to be challenged by the task at hand and are motivated by implementing change to make a difference and generating measurable ROI for their client (the ‘employer’). This is how they build their reputation as an interim expert and secure their next contract.

They can hit the ground running

Interim professionals are true experts in their field and will hit the ground running so they require much less attention when it comes to on-boarding and integration. They are used to hitting deadlines, delivering projects and working within many different business cultures.

No upfront recruitment fees

There is no fee to pay your recruitment partner up-front, unlike with a permanent or fixed-term hire. Instead you pay your contractor their agreed day rate on a ‘pay as you go’ basis, which can help to control your budget across the assignment.

So which option is right for you?

It’s hard to speak in general terms as each case is so different. Generally, contractors and interim professionals are taken on for large-scale change transformation contracts, business process optimisation or where highly-valued skills aren’t available in the permanent marketplace due to the continual uncertainty over Brexit. Their specialised skills and varied experience means that they can provide a fresh perspective and quickly deliver a measurable ROI. Fixed-term contracts are typically offered for roles at a less senior or specialised level, where a set period of absence is expected i.e. to cover maternity or extended sickness. However, they can also be used to cover busy periods too, such as the Peak season in retail and logistics.

If you would like some advice on which option is best for your business, get in touch today on 0333 121 3345 or email


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