When employers begin hiring after the recession is over and consumers began to gain confidence in the economy again, many of the new jobs will likely be contract work rather than full-time employment. Many new employees will be signed to 90 day or 1 year contracts. Some analysts predict that this will be the beginning of a new long term trend of contract employment.

Employers are hoping for the ability to grow or shrink their workforce based on how their business is doing. Employers will also benefit from this system by sidestepping the issues associated with layoffs, such as decreased morale and paying severance. Instead, employers will simply not renew the employee’s contract. The question will be whether or not the employer offers the employee a new contract instead of whether or not the employee is fired.

In Europe and Japan, contract employment has gained popularity rather quickly. The social contract of working for one company for almost all of your working years has faded away long ago. Although contract employment favors the business owner much more than the employee, contract employment is just another recognition that employment is not forever anymore.

Contract employment will definitely have some downsides for both workers and business owners. It will make it much more difficult for consumers to make long term plans. It will be difficult to buy a house and stay in it for a long period of time if you’re not sure whether or not you will continually be employed.

Business owners will have to face the issues of declining employee loyalty under a contract system. If an employer hasn’t made a commitment to their employee, it will be very difficult to get that employee to remain focused on the customer or loyal to the company.

Contract labor is certainly a double edged sword, but it is coming. Many businesses will likely begin to have a percentage of their workforce as contract employees and maintain the rest as full time employees. The “full time job” is certainly not going away any time soon, but there will definitely be a significant increase in the number of contract employees.