Make sure you're signing a contract that works for you

Anyone who has spent any time ploughing through job boards has no doubt come across the term FTC. In a nutshell, it stands for Fixed-Term Contract. In this article, we'll be looking at what FTC means in practice, as well as the pros and cons of accepting such roles. 

What is the meaning of FTC?

We know that FTC, in full form, means Fixed-Term Contract, but what is an FTC, exactly, and how is it different from other types of employment contract? We're glad you asked. 

The UK Government defines FTC as an agreement whereby the employee has a contract with a particular organisation and it ends either on a particular date or on completion of a specific task. 

This is different to a permanent contract, which lasts until either the employee chooses to terminate it (for example, due to finding a new job) or the employer chooses to terminate it (for example, due to redundancy). Permanent contracts don't have a set end date, and can be either full-time or part-time. 

An FTC is also different to a temporary contract, although there are some similarities. While both are considered short-term employment options, a temporary contract doesn't usually have a fixed end date and the individual is usually employed by an agency rather than the company where they work. 

How long does an FTC last?

There is no set duration for an FTC, as each contract will depend on the company's needs at the time. Often, however, a professional will be contracted for between three months and one year. The company's needs, such as maternity cover, delivery of a specific project, or recruitment of a permanent member of staff, will determine the length of the contract. 

At the end of the fixed term, the contract may end automatically or it could be extended. 

What are the advantages of an FTC?

Fixed-term contracts have benefits for both employers and employees. Let's look into some of them now. 

For employers: 

  • They can cover short-term staffing needs without taking on a permanent member of staff – particularly helpful when hiring seasonal workers or when permanent staff have extended periods of absence

  • They can be a cost-effective way of hiring, especially if the contracted employee is taken on permanently at the end of the term

  • They can offer the opportunity to try out new ideas and structures without long-term commitment 

For employees:

  • They can gain experience in a new industryor area of business before committing to a new career 

  • There's no long-term commitment, which can benefit certain personal situations

  • They can expand their professional network 

  • They can get into a new role quickly to avoid unemployment, for example following an unexpected lay off

  • They can be the first to be considered for any permanent position arising 

  • They can experience more variety and diversity in the work they do

What are the disadvantages of an FTC?

Of course, as always, the advantages are balanced by disadvantages, so let's look at what they might be: 

For employers: 

  • You may need to offer a higher salary to attract the right person 

  • The morale of permanent staff can be negatively affected if they see a high turnover in certain roles 

For employees: 

  • Fixed-term contracts don't offer the long-term job security that many aspire to

  • Job searches can be time-consuming and demoralising, and FTCs mean that new roles are required more frequently 

  • The opportunities for promotion and professional development are minimal in fixed-term roles

  • The lack of permanent income may result in stricter mortgage acceptance criteria

Do fixed-term contracts ever become permanent?

Of course, sometimes fixed-term contracts are offered with a view to them becoming permanent. If the contract is repeatedly extended, the employer has a legal obligation to make the role permanent after four years. Alternatively, it's also possible for the employer to agree to making the employee permanent before the fixed term ends. 

Is an FTC right for you?

When deciding whether to pursue or accept a fixed-term contract, it's important to bear in mind all the points above, as well as your personal situation. There's no definitive answer as to whether an FTC is right for you, as it will vary from person to person. 

Consider these points when deciding whether to take a fixed term contract opportunity: 

  • Are you looking for an opportunity to learn new skills, take on a new project, or stretch yourself professionally?

  • Are you seeking experience in a new area?

  • Do you need long-term job security?

  • Do you need to plug a gap between your last job and your future plans?

  • What are your plans for when the fixed term ends? 

  • Are you willing to put more time into job hunting at the end of the contract?

Weighing up your answers to these questions will help you to make an informed decision.

Example of an FTC

A very basic example of how a fixed term could be worded on a contract could look like this: 

This is a fixed-term employment agreement. This agreement will commence on 1st September 2024 and will end on 31st August 2025. The reason for the fixed-term nature of the agreement is to provide maternity cover in line with the duties listed on the attached job description. 

Where will your next contract take you?

We've discussed everything you need to know about FTCs: the meaning, pros, and cons. We've also provided a checklist to help you decide whether an FTC is the right contract for you. You should have all the information you need to make an informed decision about your next role and what sort of contract you'd prefer. 

The next step is to land that job! Is your CV up to the task? The experts at TopCV are ready and waiting to review it for you at no cost. We offer free feedback on your CV to help you position yourself as a strong candidate. 

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