Talent Development Centre

Which Fallacy Do You Subscribe To?


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Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

Yesterday’s post discussed the implications of choosing to become an independent contractor.  The truth is, there is no right or wrong decision, but it may actually depend on your personality. It has been said that whether you are a “contractor” or an “employee” by nature depends in which fallacy you most strongly believe:

  • As a contractor, you have more say over how your time is spent; or
  • As an employee, you have job security

Many people have moved into the contracting world thinking that they would be their own boss only to find themselves working harder and longer hours than they ever have before.  Likewise, others have resisted the lure of contracting in the belief that as an employee, there is greater job security.  Downsizing/rightsizing/outsourcing have taken their toll on many Canadian organizations over the past number of years, taking the wind out of this argument.

There are legitimate reasons for choosing one path over the other.  Some considerations might include:  the importance of a benefits or employer-based retirement plan,  how quickly you get bored in one role or at one company and the importance of moving from role to role, avoiding office politics, etc. (the opposite is when one values putting down roots and building long term interpersonal relationships with your office peers).

The other big consideration is risk – not so much risk in the form of job security, but risk Business woman taking a riskfrom the aspect of “risk of loss”.  One of CRA’s tests to validate whether an independent contractor is deemed an employee or a personal services business is whether there is risk of loss.  This comes in several forms, performance guarantees being one of the most obvious, but it also includes the risks associated with running your own business, the chances that enough hours may not be available or that projects may be cancelled leaving the contractor with nothing to bill against.  Then there is the risk that there may include extended down time between contracts.  These scenarios may terrify the risk adverse and encourage people to remain employees; however, with the increased risk also comes increased rewards in the form of higher pay rates.

True-blue contractors often can’t see themselves doing it any other way.  They know that the quality of their work is their meal ticket, and that the additional risks are worth the additional compensation that they collect while on contract.

The world needs both types of people, employees and contractors — which are you?  What are your thoughts on this subject?  Share your ideas with your peers by leaving a comment!

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