Offered a fixed-term contract instead of a permanent job — should you take offence?

Despite the insecurity and lack of benefits, it's still a chance to build value and boost your prospects.

- Khelvin Xu

Picture this: You are an employee dissatisfied with your current role, and have been searching for a new job for a while. Finally, after sending out your resume multiple times and after several interviews, you receive a job offer. The role is interesting, and the pay is fair. But the catch? It's a contract role, not permanent.

Employers are increasingly offering fixed-term contracts instead of permanent roles.

In 2024, the proportion of fixed-term contract employees in the resident workforce rose to 7.3 per cent from 6.6 per cent the previous year, according to a Ministry of Manpower's Labour Force report.

Highlighting this shift, The Business Times in March reported that contract hiring is more common in sectors with project-based work or those undergoing digital transformation, and for roles in software development, data analysis and engineering.

Amid challenging and uncertain economic conditions, it is understandable that many employers are reluctant to maintain a workforce that ends up being too large or inflexible.

Offering contract roles creates more flexibility to scale their workforce in response to fluctuating demand and economic uncertainty.

Even the public sector — often perceived as a bastion of job security — employs contract workers. Anecdotally, the trend appears to be for some public sector workers to be initially offered contract roles, before subsequently being offered permanent roles.

This approach is understandable from the taxpayers' point of view. Given the widely held perception that permanent public sector jobs offer an "iron rice bowl", such jobs should not be offered so easily, or to all and sundry who have yet to prove themselves, especially if it might be the case that it is difficult to let go of underperforming permanent public service workers.